Low Prices Wake-Up World Buyers

Published on: 05:56AM Aug 28, 2014

Good Morning! Paul Georgy with the early morning commentary at 5:30 am.

Grain futures are higher on short covering. Lower prices are encouraging some export interest. The dollar and metals futures are higher.

Traders Focus Today: Export Sales report, early yield results and outside market action.

You have only a few days left to get your farms yields counted in the Allendale 25th Annual Yield SurveyThe results of the survey will be released on September 3rd at 7:30 am.

Ethanol production averaged 913,000 barrels per day compared to last week of 937,000 barrels per day. This was a bit of a surprise as traders were expecting higher production due to excellent profit margins. However, we have to remember some plants shut down for maintenance this time of year.

Update - Morning Coffee Commentary:


The USDA will release the Weekly export sales at 7:30 AM.


         Trade estimates for     Trade estimates for

                     2013-14                 2014-15

Wheat                    N/A         300,000-500,000

Corn       -100,000-+100,000         450,000-750,000

Soybeans          -150,000-0       750,000-1,100,000

Soymeal       25,000-100,000         100,000-200,000

Soyoil              0-20,000           10,000-20,000

CBOT September contract first notice day is Friday. Trade is expecting no deliveries in meal, soybeans and corn. There could be light deliveries in wheat.

South Korea MFG is tendering for 280,000 of optional origin corn.

Net farm income is forecast to be $113.2 billion in 2014, down about 14 percent from 2013’s forecast of $131.3 billion by USDA/ERS. The 2014 forecast would be the lowest since 2010, but would remain $25 billion above the previous 10-year average. Lower cash receipts for crops and, to a lesser degree, higher production expenses and reduced government farm payments, drive the expected drop in net farm income.

Russia has not supplied grain to Brazil due to its unfavorable duties, which it agreed to decrease if Brazil raised meat supplies to Russia. Now the meat supplies have already grown due to the western sanctions, and Zlochevky thinks Brazil will reciprocate by easing conditions for the Russian grain.

China's grain cupboard is overflowing. As this year’s harvest looms, the country is on track for an 11th year of bumper grain production. But this years crop production may be too much with warehouses bursting at the seams and posing a dilemma for policy makers.

Agriculture market’s day session will be closed on Monday but grains will reopen at 7:00 pm central time.

On a lighter note we saw a report today announcing that scientists have modeled how sheepdogs herd their livestock. Apparently the dogs focus more on the gaps within a group. When they run back and forth in a particular spot they are encouraging the animals near there to close the gap. Read more in Rich Nelson’s cattle commentary from last night.

Beef values are under pressure again with choice down 1.07 and select down .88. The CME Feeder Index is 217.35. Packer bids have firmed up to 151 which could lead to a steady trade for the week.

Pork cutout values are down 2.98. Retailers are reluctant to have excess inventory after the Labor Day Holiday.

Markets as of 5:30 AM CDT                                                                    

  • Dec Corn   + 3/4     
  • Nov Beans   +3 1/2
  • Sep Wheat   +6 1/4
  • Oct Cattle  -.22
  • Oct Hogs    -1.20
  • Sep Dlr     +.10
  • Sep S&P     -7.50
  • Oct Crude   -.19
  • Oct Gold   +8.80

Chart of the Day

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