Weather Improves In South America
Apr 25, 2016
Good Morning! Paul Georgy with the early morning commentary for April 25, 2016.
Grain markets are lower on follow through selling from last week. Markets in general have a risk-off attitude as the US Dollar and crude oil are lower.
Last week’s weather fears have calmed as the latest models confirm dryer for the next 10 days for Argentina and rain relief for Brazil's safrina.
Are We in For a Big Acreage Shift? Join us in our next webinar, Tuesday evening April 26 at 8:00 PM CDT. Register. Allendale's Rich Nelson will share the latest thoughts on US corn and soybean acreage, including how recent price swings could impact the final planting numbers, and how the market could react to acreage changes.
Grain futures had a very volatile range last week with funds large buyers early but likely sellers late in the week. May corn futures had a 32 cent range closing 6 ¾ lower for the week. May soybeans had an 85 cent trading range closing 31 cents higher on the week. May wheat had a 50 cent trading range, closing only 7 ½ cents higher on the week.
The CFTC commitment of traders report showed managed money funds net buyers of 105,796 contracts of corn futures through Tuesday of last week. They are now net short only 30,909 contracts. In soybeans they were net buyers of 35,194 contracts making them net long 135,410. Managed money funds were net buyers in wheat of 17,922 while remaining net short 88,241 contracts.
Funds were estimated to have been net sellers on Friday of 18,000 corn contracts, 21,000 soybeans, 18,000 wheat, 8,000 meal and 4,000 soyoil contracts.
Trade is estimating corn planting progress on today’s report to be 25-30% complete and soybean plantings to show a 2-3% completion.
The first notice day for May futures contracts is Friday, April 29.
US rig counts dropped another 8 last week for a total 343 compared to 1609 during October 2014.
Macro markets will be waiting for Wednesday’s conclusion of the FOMC meeting to see if they change interest rates. We could expect choppy action in the US Dollar ahead of this announcement.
The April cattle-on-feed report could be considered a bit friendly as placements were less than trade was expecting and marketing’s were larger than expected. Remember the cattle market is oversold technically and was carrying a rather negative attitude going home on Friday. June cattle futures were down $7.52 last week. We would have to call for a higher opening pending outside markets at 8:30 am.
Cash hogs should be higher this week as tighter supplies support prices. June lean hog futures were up $1.20 last week. The June futures contract is currently $11.00 premium to the cash index. One would expect the gap to narrow either by cash rallying or futures correcting. Chart support crosses at 76.80 in June lean hogs.
Dressed beef values were lower with choice down .41 and select down 2.08. The CME Feeder Index is 151.11. Pork cutout values are down 1.10.
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