Commentary

Markets Fall Despite Solid Weekly Export Sales

Mar 23, 12:11 pm | Mid-day Commentary

It’s been another session in the red, with better than expected export sales unable to spark any fund buying or short covering at midday. Crude is down slightly, having reversed overnight gains, amid ongoing builds in US inventories and calls for a more balanced energy market in 2017 are being questioned. Macro traders await today’s vote on the new US healthcare bill – and then subsequent tax reforms – before establishing large new positions. The Dow at midday is up 85 points. Generally, world weather forecasts remain favorable, and longer term our research does suggest that a major surprise in next week’s stocks/seedings data or adverse weather is needed to attract new longs. However, it is likely that the USDA…

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Cattle to Rally Further on Brazil; Expansive US Rain Lies Ahead

Mar 23, 7:30 am | AM Weather

AgResource Daily Cattle Analysis: Cattle futures marked another day of strong gains, and a firm outlook is offered for early trade this morning. Cattle futures opened out of range on Wednesday and never looked back, with most contracts quickly climbing to limit gains, but all ended just under the early morning highs.   Feeder futures gained against fats, with  all contracts past March closing up $3+ and also marking new contract highs. March finished $2 higher for the day and $4 over the cash index, which was up $.07 at $130.02.   Initial cash sales for the week got underway at the Fed Cattle Exchange auction, where 2,195 head traded out of the 3,928 that were offered. Sales prices ranged…

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Grains Steady; Beans Lower on Weaker Brazilian Basis

Mar 23, 7:12 am | Morning Commentary

6:30 AM CST CBOT Prices: May soybeans are down 4.25 cents at $9.955, May corn is down 0.75 cents at $3.58 while May Chi wheat is up 0.25 cents at $4.225.   Good Morning! Ag markets are again mostly weaker ahead of this morning’s export sales report, though ARC expects an intermediate bottom is close at hand in grain values. Brazil’s meat scandal seems to be getting worse, not better, and a host of countries have joined China in suspending meat imports from Brazil. The US meat market looks to benefit from this and cattle’s rally is expected to continue. We’ve also highlighted this week how Gulf wheat has become – by far – the world’s cheapest origin for Apr-May.   Outside…

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South American Corn Supply & Demand

Mar 22, 4:31 pm | Corn

It’s time to update South American corn balance sheets. USDA/CONAB production estimates look a bit understated given weather to date.

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Afternoon Weather Update

Mar 22, 4:30 pm | Weather

US Pattern Unchanged; Slightly Wetter in Plains 8-15 Day Period: The EU and GFS continue in broad agreement on US weather through early April, though the afternoon run of the EU model has added precip totals and coverage to the Central Plains mid/late next week. All indications point toward a substantial pattern shift in the next few days, one that will trigger drought erosion across the driest areas of the Central US in the weeks ahead. NOAA’s best guess on rainfall through early next week is attached, and only the southern HRW Belt will be short-changed.   Several frontal systems are scheduled for the next 10-12 days. The first event begins by Fri/Sat, but the bulk of rainfall occurs on the…

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KC Wheat Hits 12-Week Low; Egypt Demand Overstated?

Mar 22, 4:22 pm | Wheat

Wheat’s slide continues, with KC futures breaching chart pattern-based support, and with Egypt reportedly canceling a totals of 10 cargoes from optional origins since early 2017. This is essentially 550,000 MTs of reduced demand in Egypt, and earlier in the week a USDA attaché report lowered total 16/17 Egyptian imports by 800,000 MMTs. Turkey has also added Germany, Romania and even the US to its list of unacceptable origins, which erases hope the US could ship 20-30 Mil Bu to Turkey in the next 2-3 months.    The EU model after the close also added to rainfall amounts and coverage across the heart of the HRW Belt. This isn’t in itself news, as the trade seems to have fully embraced…

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Corn Falls for Third Day Despite Solid Ethanol Production

Mar 22, 4:21 pm | Corn

Corn’s slide continues amid rising South American production estimates – and thus rising competition for export demand – and ongoing massive feedgrain alternatives. Ethanol production was better than expected, and rather large, but even this suggests additional DDGs will flood the market. A weather scare is needed to spark better interest from speculators.   Weekly US ethanol production through last Friday totaled 307 Mil Bu, barely changed from the previous week and up 14 Mil from the same week in 2016. Year-to-date weekly ethanol production rests at 8.7 Bil Bu, up a hefty 4.9% from a year ago, and while the USDA’s ethanol demand draw is still some 25-50 Mil Bu too low, this may be offset by lower feed…

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Hogs End Mixed At Midweek

Mar 22, 3:49 pm | Hogs & Pork

It was a very mixed day of trade in the hog market through Wednesday. April traded inside and finished firm, while summer hog prices slipped deeper into oversold territory and closed with modest losses. The CME’s lean hog index was down $.13 at $71.48 and the USDA reported negotiated trade for Wednesday was $.52 lower. The pork cutout was $1.92 lower and under $80 for the first time in 9 weeks. Packer margins have tightened up this week, with the lean to cutout spread narrowing back to $7.56/cwt, down from $11 last year but inline with the 5 year average.     The monthly Cold Storage report showed end of month February pork stocks at 572 Mil Lbs, 109% of…

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Soy Futures Slip Lower Through Midweek

Mar 22, 2:52 pm | Soybeans

It was another mixed day of trade in the soy markets that left soybeans lightly mixed, but little changed. Meal traded quietly and was settled at a new low, while bean oil came alive late in the morning and trade up into late in the day. Commodity fund traders sold 3,000 contracts in meal, bought 5,000 soyoil, and were flat in soybeans.   The latest port data from Brazil shows that 5.6 MMTs of soybeans have sailed this month, with another 4.5 MMTs scheduled. March shipments of 10 MMTs would be record large and 1.7 MMTs over last year, while cumulative exports at 16 MMTs would be 32% over 2016. But what is concerning is the limited amount that is…

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Markets Stay Weak; US Crude Supplies Swell Further

Mar 22, 12:12 pm | Mid-day Commentary

It’s been a rather uneventful session in Chicago. The soy complex has found chart-based support at $9.95, May, but otherwise activity has been limited. Markets remain weak at midday, despite wheat and soybean export sales announced by FAS this morning, and so far end user demand has been quieter than on Tuesday. China secured two cargoes of US soybeans for new crop arrival. Saudi Arabia through its latest tender bought two cargoes of US HRW. The EIA reported that through the week ending March 17th, US ethanol production totaled 307 Mil gal, down just fractionally from the prior week and compared to 293 Mil on the same week in 2016. Ethanol inventories also shrank 7 Mil Gal to 949 Mil…

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