Will Big Harvest Estimates Slow Market Momentum?
Oct 05, 2018
Good Morning from Allendale, Inc. with the early morning commentary for October 5, 2018!
Grain Market Traders have their eyes on the skies as updated weather forecasts continue to show precipitation increasing the chances of harvest delays around the U.S. Corn futures have pushed towards its biggest weekly gain in more than two months (12.75 cents) as a result of this and a revised NAFTA deal (USMCA).
Weekly Export Sales were released yesterday with traders receiving big numbers. 2018/19 corn sales of 1,431,000 (estimate 1,000,000 to 1,600,000 tonnes), soybeans sales of 1,521,000 (estimate 900,000 to 1,500,000), wheat sales of 435,000 (estimate 250,000 to 550,000), and soymeal sales of 412,000 (estimate 0 to 500,000).
Columbus Day Holiday is Monday (10/8/18). Equity and commodity markets will be open for a full trading session, cash Treasury and forex trading will be closed.
U.S. Agriculture Secretary Sonny Perdue said on Thursday that the United States "probably made a mistake" becoming too trade dependent on China and added that the administration was pursuing trade deals elsewhere. "When you have so much of your business in one big customer, disruptions like this can mean pain. I think our strategy is to go around the world."
Informa estimated the U.S. corn crop at 14.890 billion bushels with an average yield of 182.1 bushels per acre. U.S. Soybean production was viewed at 4.677 billion bushels with yields averaging 53.0 bushels per acre.
Brazil Soybean Planting in Parana, South America’s number 2 soy producer, reached 29% complete this week (16% last year). Deral also had corn (first crop) planting at 70% complete (33% last year).
Safras & Mercado expects Brazilian soybean exports to reach an estimated 79 million tonnes in the 2019/2020 marketing year (February 2019 - January 2020). If U.S. - China trade war continues, Brazilian soybean exports will continue to be strong in the 2018/2019 crop season, which is just starting in Brazil.
Managed Money Funds were estimated buyers of 9,00 corn contracts, 2,000 wheat, and 1,000 soymeal. They were estimated sellers of 3,500 soybeans and 2,500 soyoil.
Sow Death Rates in the U.S. are increasing at an alarming rate. Researchers believe this is linked to a rise in sow prolapse. According National Hog Farmer, sow mortality skyrocketed from 5.8% to 10.2% on sow farms over 125 heads between 2013 and 2016 and continue to rise now.
U.S. Government Officials said a U.S. unit of Brazil's JBS has recalled 6.5 million pounds of beef processed through an Arizona plant since the meat potentially could be contaminated with salmonella.
December Live Hogs traded sharply lower for a second session in a row pulling off of resistance levels closing at $55.32. Next level of resistance is at $59.15 with support at $53.82.
December Live Cattle closed $0.15 higher closing below critical resistance at the $119 level, support remains at $116.62.
Dressed Beef Values were lower with choice down 0.56 and select down 0.32. The CME Feeder Index is at 157.81. Pork cutout value was down 0.46.