Yields Seen As Highlight of Report

Published on: 10:44AM Aug 12, 2015

Good Morning! Paul Georgy with the early morning commentary for August 12, 2015 at 5:15 am.

Grain markets are mixed in a very volatile overnight session. Traders are making final adjustments before the USDA report later today. A possible currency war may be in the making as China allows the Yuan to fall. The US Dollar and Stock Indices are sharply lower as of this writing.

Trade is looking for USDA to lower corn yields from last month’s report to 164.5 in corn and a reduction in soybeans to 44.7 bushels per acre. This would still be the second highest yield on record, only topped by last year’s 167.4 bushels per acre for corn and 45.4 bushels per acre for soybeans.

US harvested acreage will be another anticipated number as it could have a significant impact on total production. However USDA’s adjustment to South American corn and soybean production may have a long lasting impact on US prices. The exchange rate of currencies is providing the export advantage to South America as US harvest nears.

CONAB, Brazil’s government crop supply agency raised their overall 2014/15 corn production to 84.3 million tonnes versus last month’s estimate of 81.8 million tonnes. They held the soybeans harvested at 96.2 million tonnes.

Landworth pegs 2015 US corn yield at 167.2 BPA versus USDA’s July forecast of 166.8 BPA.

Funds were sellers yesterday, estimates are they sold a net 17,000 corn contracts, 8,000 soybeans, 8,000 wheat, 5,000 soymeal and 3,000 soyoil contracts.

JOLTS expected to show record high job openings which means that the U.S. labor market currently has the largest number of jobs available since at least 2000.

China allows the Yuan to decline putting pressure on US companies exporting to that region.

There is a reason for the large discount of lean hog futures to the current cash index. Rich Nelson Allendale’s Chief Strategist looked at the historical picture. Cash hogs between August 11 and the end of the month have made the following moves in recent years…2014 down $21.17, 2013 down $10.13, 2012 down $15.27, 2011 down $16.77, and 2010 down $0.85. Currently there is a $16.55 discount of October futures to the cash index.

Beef cutout values are supporting the idea packers will pay-up for cash cattle this week.

Dressed beef values were higher with choice up 2.41 and select up 2.88. The CME Feeder Index is 216.68. Pork cutout values are up .57.

Markets as of 5:15 AM CDT

  • Dec Corn   1 3/4
  • Nov Beans -5 1/2
  • Sep Wheat   1 1/2
  • Sep Soymeal 1.90
  • Oct Soyoil -.46
  • Sep Dlr     -.71
  • Sep S&P   -21.75
  • Sep Crude   .52
  • Aug Gold    8.30

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