Yield Discussion Heats Up Ahead Of Report
Aug 07, 2015
Good Morning! Paul Georgy with the early morning commentary for August 7, 2015 at 5:15 am.
Grain markets are quiet as traders wait for market moving news. Later this morning the monthly unemployment data could provide leading insight into FOMC’s rate hike decision. Macro markets are waiting for the report.
There is an ongoing debate on yield, acreage and total production of corn and soybeans ahead of next week’s USDA report (August 12). The average yield estimates from analysts are all over the board. We are hearing estimates for IL yields from 140 to 180 . With the pre-report outlook variance it should make for a very volatile session next Wednesday. Talk to your Allendale Representative to discuss strategy for managing your risk.
Rain fell in Arkansas where crops are behind and welcome. Another system is moving across the northern Midwest which could provide the finishing touch on some of the early planted corn. Temps are supportive to crops even where moisture is needed.
Soybean importers in northern China's Shandong province have suspended their trading activities amid a crackdown on the illegal sale of cheap genetically-modified (GMO) varieties to food companies, an official think tank said and reported by Reuters.
According to a survey by USDA, cropland values edged up 0.7 percent overall to $4,130 per acre during the first 6 months of 2015. However the Corn Belt showed declines with values down 2.3 percent and with land in Iowa losing 6.3 percent of its value.
Brazilian sugar cane mills seeking to generate cash are selling ethanol as fast as they can produce it rather than building stocks, according to the head of Brazil's main sugar milling. He said around 70 mills in Brazil filed for bankruptcy protection in the last three years due to subsidized local gasoline prices and weak international sugar prices squeezing profit margins.
Food and Agriculture Organization's (FAO) food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 164.6 points in July, down 1.7 points or 1.0 percent from June. July's reading is the lowest on the index since September 2009.
Funds are estimated to have a net seller of 7,000 soybean contracts, 6,000 corn and 4,000 meal while buying 5,000 wheat contracts on Thursday.
Today’s unemployment report could be a key piece of data for FOMC’s September rate decision. The market is expecting today’s July payroll report to show an increase of 225,000 jobs.
China’s Ag Minister is suggesting pork prices are likely to continue to rise in coming months with supplies still tight and big national festivals approaching. Weak prices and a supply surplus prompted breeders to slaughter sows from 2013 and stocks are now at their lowest level since 2008 after falling for 22 consecutive months, the ministry said.
Factoid: The people in China eat more than half the pork consumed in the world.
June exports of pork were 4.6% less than May, beef was up 10.9%, and poultry down 1.4% from the previous month. Pork exports were up 0.2% from a year ago during June and beef exports were down 9.4% from a year ago. Beef imports were up 33.9% from a year ago and up 36.3% year to date.
Live cattle futures are trending higher as recent support was broken. Lean hogs remain in an up trending channel with support at 63.00 in the October contract.
Dressed beef values were lower with choice down .02 and select down .48. The CME Feeder Index is 217.07. Pork cutout values are down .12.
Markets as of 5:15 AM CDT
- Dec Corn 0
- Nov Beans 3 1/2
- Sep Wheat 1 1/4
- Sep Soymeal 1.90
- Oct Soyoil .04
- Sep Dlr .03
- Sep S&P -3.25
- Sep Crude -.04
- Aug Gold 1.90
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