Good Morning! Paul Georgy with the early morning commentary for April 28, 2017.
Grain markets are mixed on end of month position evening after a volatile week. Outside markets continue to monitor US budget and NAFTA negotiations.
First Notice Day for CME May grain contracts is today. Expectations from traders are 0 to 600 corn deliveries, 300 to 800 Chicago wheat, and 200 to 600 KC Wheat. Some predictions in soybeans were as high as 1,000 contracts.
Weekly export sales were reported by the USDA yesterday, covering sales made from Friday the 14th - Thursday the 20th. Corn export sales totaled 999,045 metric tonnes during this time (987,934 old crop). This was within the 750,000 - 1,150,000 metric tonne trade expectation. We have sold 90% of USDA's whole-year expectation.
Soybean export sales of 880,372 metric tonnes were noted (808,055 2016/17). That was over the 350,000 - 750,000 trade expectation. We have sold 102% of USDA's whole-year expectation. That is over the 98% - 100% pace from the most recent three years of normal SA crops.
Wheat export sales totaled 367,094 tonnes (61,674 old 305,420 new). That was within the 350,000 - 750,000 trade expectation. We have sold 100% of USDA's whole-year expectation. That is under the normal 102% expectation.
Kansas Wheat Quality Tour starts on Monday and runs through Thursday of next week.
US Attache to Canada estimates total wheat, barley, corn, and oat production at 52.6 million tonnes for 2017/18, a seven-percent decrease from 2016/17. Wheat production alone is estimated to decrease ten-percent.
Funds were estimated buyers of 6,000 corn, 2,500 soybeans, 6,000 wheat, and 3,000 soymeal in yesterday's trade. They were estimated sellers of 3,000 soyoil.
Macro traders are concerned about the congressional vote on government funding due today, though indications are that a stop-gap funding bill will pass soon enough to avert a shutdown. GDP, Chicago PMI, and Michigan Sentiment reports are also out this morning and will be on trader's minds.
Weekly beef export sales were strong at 21,222 metric tonnes, the largest sales in 13 weeks. It was 75% over last year in the same week and 49% over the 4 year average for this week.
Cash cattle trade was on fire on Thursday with some sales reported at $140 in CO, with most cattle trading in the south at 135 to 138. Packers were wanting cattle for immediate delivery. Cattle weights, current conditions in feedlots, and retail profit margins are key drivers of bullish attitude.
April futures go off the board today at noon. Look for more volatility going into that expiation.
June futures will have a trading limit today of $4.50 from the normal $3.00 limit. Synthetic futures on the close was suggesting a 50 to 60 cent higher opening.
End of Month margin requirements are pressuring the shorts in the livestock to pay-up or get out. While open interest in cattle is at a record high and building.
Pork export sales in the latest week totaled 22,962 metric tonnes which was 62% lower than last year’s 60,934 metric tonnes. Year-to-date pork export sales are running 8% over last year.
June lean hog futures closed above the 20 day moving average and tested the 200 day average on Thursday. Resistance crosses at $75.00 and $76.20. Support in the June comes in at $72.00.
Dressed beef values were mixed with choice down .03 and select up .96. The CME Feeder Index is 139.86. Pork cutout value is up .18.
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