Weather And Strikes Now Come Into Focus
Apr 02, 2015
Good Morning! Paul Georgy with the early morning commentary for April 2, 2015 at 5:15 am.
Update - Morning Coffee Commentary:
Grain markets are lower as traders have risk-off attitude across-the-board heading into a long weekend.
Will we see early month and new quarter buying continue today on synthetic Friday? Markets are closed for observance of Good Friday tomorrow. Weather forecasts and rumblings of strikes out in South America provide underlying support for now.
Allendale’s Meteorologist, Ryan Martin says in his comments: “The pattern continues to get wetter over parts of the Corn Belt in the weeks ahead. The eastern half of the Corn Belt sees rain potential increase in the next two systems, the one that comes through tomorrow and Friday, and the one for next week. This increase in moisture is only seen over the eastern half of the Corn Belt. The western belt still sees the same potential as earlier, although we are open to slightly more rain potential at the end of next week.” Read more by clicking here.
Strike season in South America is upon us. The crush union in Argentina went on strike yesterday ahead of a long weekend. They were asking for a 42% increase in pay in order to keep their salaries in line with inflation. It is expected once this strike is settled, another group will go out looking for more money.
The Brazil truckers are talking about striking again in late April. This is creating concern for Chinese buyers and providing underling support to the soybean contracts that they may have to come back to the US for fill-in purchases.
Ethanol data released by the EIA showed production was very close to a week ago levels however ethanol stock declines from 21.3 million barrels to 20.5 million barrels. They suggest a pickup in driving by US consumers or an increase in exports.
Trade estimates for USDA's weekly export sales data to be released at 7:30 am are: wheat 100,000-300,000 tonnes, corn 400,000-500,000 tonnes, soybeans 150,000-300,000 tonnes, soymeal 100,000-200,000 tonnes and soyoil 0-20,000 tonnes.
A reminder, CBOT grains close at their regular time today and will be closed on Good Friday. They will reopen Sunday night at regular time.
Commodity funds were net buyers on Wednesday of an estimated 9,000 soybean contracts, 8,000 corn, 7,000 wheat, 4,000 soymeal and 2,000 soyoil contracts.
Labor market data released tomorrow morning is expected to remain firm but March payrolls may show unexpected weakness due to weather in February. Trade will likely be making adjustments today as the data will be released when markets are closed.
The livestock trade is dealing with a series of battles. Packers are fighting for better margins, feedlots are holding out for higher prices because they can (tight market ready numbers) and retailers are trying to stock up for post Easter holiday featuring. Bottom line it suggests feedlots have the upper hand for now. Pork is struggling at the wholesale level as supplies are plentiful and the consumer still likes to eat beef. Price competition will kick in soon as beef is at record highs compared to wholesale pork.
Dressed beef values were higher with choice up 1.29 and select up 1.57. CME Feeder Index is 216.71. The CME Feeder Index is 218.65. Pork cutout values are down 1.38.
Markets as of 5:15 AM CDT
- May Corn -1 1/4
- May Beans -5 1/4
- May Wheat -1
- May Soymeal -2.00
- Jun Dlr -.35
- Jun S&P -8.00
- May Crude -.58
- Apr Gold -5.60
Technical Chart of the Day
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