Wheat Tour & Planting Progress Important Next Week
Apr 27, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for April 27, 2018.
Grain markets look to Canadian acreage data this morning as US planting continues. With many parts of the corn belt open for planting this week, traders will be anxious to see Monday afternoon's crop progress numbers.
Statistics Canada will be out with their latest acreage estimates today. Analysts are expecting to see all wheat acres of 23.038 million, 23.663 canola, 3.583 corn, and 7.117 soybeans. The canola acreage would be an all time high.
More than half of Argentina's 2017-18 soy crop has been harvested with yields coming in at an average 2.4 tonnes per hectare, the Buenos Aires Grains Exchange said on Thursday. (Reuters) A 2.4 tonne per hectare yield number for soybeans suggests a 35.7 bpa yield. It would also imply a 42 million tonne production. USDA is using 40 mt which implies 34 bpa. Final yields will likely fall, however.
Wheat Quality Council Tour begins next week on Monday afternoon and will conclude May 3rd. The tour is expected to confirm a poor western crop, but the central and eastern areas which received rains will be of interest to trade.
Combined corn export sales totaled 620,481 metric tonnes on yesterday's weekly export sales report. Analyst were expecting 1,000,000 - 1,600,000. This was the lowest old crop sale since November 23. Still, 88% of USDA's whole-year goal has been sold, right on the five year average.
Soybean export sales came to 537,803, well below the trade expectation of 800,000 - 1,400,000. This should mark the end of good soybean sales. Chinese trade issues aside, soybean sales regularly move to South America this time of year as their new crop is freshly harvested. Total sales this year are at 97% of USDA's whole year goal, right on the five year average pace.
Wheat sales were reported at 577,904 metric tonnes, beating the 50,000 - 500,000 estimate range. YTD sales come to 93% of USDA's whole-year goal, but normally by this point we have sold 103%. The wheat marketing year ends at the end of next month. We'll need to see a good pickup in demand to hit USDA's export estimate.
Funds were sellers of 4,000 corn contracts and 5,000 wheat in yesterday's trade. They were neutral in soybeans. This afternoon's CFTC Commitments of Traders report will be interesting to see.
GDP leads the list of economic reports out today at 7:30 AM CDT. Chicago PMI and Michigan Sentiment follow at 8:45 and 9:00 AM respectively.
Beef export sales came to 18,539 metric tonnes in the latest week and was a slight disappointment as it was 13% under last year. Sales are still 15% over last year with USDA currently at 6% over last year.
Cash cattle trade was still a stand-off in most areas on Thursday. Some sales were reported at 121 for delivery 3 to 4 weeks out. Feedlots are looking for 126.
June cattle futures tested the 106 level but were unable to close above it. Technical traders need a close above that level to turn buyers even with the sharp discount of futures to cash.
USDA reported 26,361 metric tonnes of pork sales in the most recent week. That was the largest weekly sale in six weeks and the sixth largest of the year. This sale was 15% over last week. Year to date sales are only 2.5% over last year and USDA's current goal is 5% over last year.
Market ready hog supplies are plentiful and providing heavy pork supplies for the consumer. Cash hog index is not gaining quick enough to support the premium of June lean hog futures.
June lean hog futures have had a very volatile past month, with a $8.85 range. Support comes in at 72.70 and resistance at 77.30.
Dressed beef values were higher with choice up 1.55 and select up 1.33. The CME Feeder Index is 138.20. Pork cutout value is down .64.
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