Risk Off Attitude On Report Day

Published on: 10:55AM Oct 10, 2014

Good Morning! Paul Georgy with the early morning commentary for October 10, 2014 at 5:30 am.

Traders Focus: USDA Reports at 11:00 AM and outside market selling.

Grain futures are lower as crude oil sets new contract lows and the equity markets extend sell-off.

The data released by USDA later this morning will likely have something for everybody. Some of the key points are:

  • The average yield for corn and soybeans
  • Total US production of corn and soybeans for the 2014/15 crop year
  • Adjustments to planted and harvested acres in corn and soybeans
  • How the USDA adjusts usage in the 2013/14 marketing year for soybeans to arrive at a 92 million bushel carryover
  • Total export projections for 2014/15 in soybeans
  • Soybean and corn production in southern hemisphere
  • Spring wheat production
  • World wheat production and ending stocks

Allendale is looking for the soybean yield to come in at 48 bpa. It should be noted that the average increase from Sept to October report is 4.4% when they raise yields which would suggest the yield could come in at 48.7. The average trade guess for bean yields is 47.589 bpa. Call your Allendale Representative to discuss last minute strategies going into the report.

Egypt's General Authority for Supply Commodities (GASC) set a tender on Thursday to buy an unspecified amount of wheat from global suppliers for shipment from Nov. 11 to 20.

(Reuters) - The European Commission has raided ethanol companies in two EU countries as part of investigations into alleged price-fixing. The Commission, which acts as the competition watchdog in the 28-member bloc, said on Thursday it had concerns that companies may have colluded in submitting price information used to set industry benchmarks for trading in Europe and globally.

Russia was the top buyer of Brazilian beef last month, purchasing 35,122 tonnes worth $153 million, Abiec said in a statement. That was an increase of 13-percent in volume to Russia from a year earlier and 25-percent in value.

Update -


After several days of rallying livestock, traders went to bank some profits and found willing buyers were limited yesterday especially in the cattle complex. Beef values have risen to levels that packers could pay up for cattle this week. However the sharp reversal in live cattle and feeder cattle futures may open the feedlot gates today, we have heard of cash trading at $164 in KS. Choice beef is up .51 and select is up .37. The CME Feeder Cattle Index is 238.72.

Technical traders will be concerned about a lower close today after large outside day range on Thursday. Key technical support in the December cattle is 165.05.

The strong uptrend in the cash hog index is providing underlying support to lean hog futures. The discount of October and December contracts have traders bull spreading. Traders believe there are greater hog supplies on the horizon but are concerned about the strong product demand. Pork cutout is down 1.09 but packer margins are estimated at over $100 per head on integrated operations.

Markets as of 5:30 AM CDT                                                                     

  • Dec Corn   -3         
  • Nov Beans   9 1/4
  • Dec Wheat   -2 1/4
  • Oct Cattle  .67
  • Oct Hogs    -.02
  • Dec Dlr     .16
  • Dec S&P     -11.50
  • Nov Crude   -1.25
  • Oct Gold   -7.60
daily chart

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