Weather Continues to Dominate Trade
Jul 14, 2017
Good Morning! From Allendale, Inc. with the early morning commentary for July 14, 2017.
Grain markets continue to trade the latest weather models. While heat continues to be forecast, it is not seen as bad as first feared, and beneficial rains appear as well. Traders, however, will likely position for weekend map updates.
The weekly Drought Monitor showed extreme drought widening in North and South Dakota and Montana. They also increased the portion of moderate drought in parts of Nebraska and Iowa. Remember, however, this is only for rains through Tuesday.
Weekly Export Sales for the week from June 30 - July 6 had corn sales totaling 440,708 metric tonnes (161,048 old crop). That was within the 350,000 - 700,000 trade expectation. There are only eight weeks left of the old crop marketing year.
Soybean export sales totaled 638,041 metric tonnes (228,041 old crop). That was just over the 250,000 - 600,000 tonne trade expectation. USDA's old crop export goal is 2.100 billion bushels. Total sales so far are 2.203 billion, but we will need to keep an eye on shipments.
Wheat export sales ran 357,702 metric tonnes (all current crop). Sales year to date total 322 million bushels. That is right next to the five year average of 319.
China signed non-binding agreements yesterday to buy 12.53 million tonnes of the US Soybeans. This is the second largest deal between the US and China announced, with the largest back in 2015. These types of announcements are common this time of year, and represent just a portion of the crop they will buy from the US.
Strikes on Brazil's BR-163 highway continue this week, and are preventing grain trucks from getting to the Miritituba port. Analyst group Abiove warns that cancellations of soy and corn exports are inevitable.
Managed Money Funds were estimated to be big sellers across the board yesterday, selling 30,000 corn contracts, 30,000 soybeans, 17,000 wheat, 7,500 soymeal, and 4,500 soyoil.
Outside Markets have several reports to monitor this morning. Retail Sales and CPI are both out at 7:30 AM CDT, while Business Inventories and Michigan Sentiment are due at 9:00 AM.
Only 11 Days remain until Allendale’s Ag Leaders Conference Series BEGINS!
July 25th, 26th and 27th, 2017
Weather Outlook - July 25th 2:00 PM CST, Drew Lerner of World Weather, Inc. will share his forecast for the remainder of this growing season and into harvest.
Grains & Oilseeds - July 26th 2:00 PM CST, Is it time to change your hedge strategy, or should you stick to your plan?
Livestock - July 27th 2:00 PM CST, Our livestock outlooks will address the big fundamental questions that the livestock markets are currently facing.
Cargill reported strong earnings of $347 million for the March - May quarter. That was up dramatically from only $15 million the previous year. The firm suggested strong meat processing revenues and better than expected grain exports were responsible.
USDA's Actual Slaughter report showed the average cattle carcass two weeks ago weighed 804 lbs, a 1 lb. increase over the previous week. That helped the average increase from a 1.5% year over year discount to now a 1.1% difference.
Hog weights fell from 205 lbs down to 204. Declining weights are an expected issue for hogs at this time, though the seasonal low won't come until August for weights. Yesterday's weight number is 1% under last year.
Dressed beef values were lower with choice down 2.84 and select down 1.47. The CME Feeder Index is 150.74. Pork cutout value is down 2.15.
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