Commentary

Afternoon Weather Update

Feb 22, 4:53 pm | Weather

Above Normal Rain Continues in Majority of Brazil Corn Belt: The South American forecast though early March lacks any blocking high pressure Ridge aloft, and so moisture will continue to flow across much of South America in the weeks ahead. The graphic attached displays the 7-day precip forecast, with Brazil’s safrinha Corn Belt highlighted. Cumulative totals are estimated at 2-5”; rainfall in the same period a year ago was recorded at just trace amounts to 3”.   The longer term outlook features ongoing rainfall across Central and Northern Brazil in the 8-15 day period, with a boost in precip coverage also offered to 80-90% of Argentina’s crop area. Guidance on the 16-30 day period features dryness in NE Brazil but…

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US Wheat Rebounds 2-6 Cents; World Cash Market Lacks Direction

Feb 22, 4:48 pm | Wheat

US and European futures settled moderately higher today, in large part due to Egypt’s latest tender results. Simply put, major importer consumption is at least intact following the recent rally, and so overall demand is sold. However, major exporting origins have done little in the last 10 days are now offered within $5-8/MT of one another (see below) at levels comparable to $4.40-4.50, basis spot CME & KC. New crop seedings and weather is awaited.   Egypt today secured 360,000 MTs of Russian and Ukrainian origin at an average fob price of $197/MT. This is the highest price of the season (up very slightly from last week), and suggest Russian exporters don’t need to be overly aggressive in the near…

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Corn Rallies (Slightly) for Second Day; New Crop Acreage Likely Out Thursday

Feb 22, 4:47 pm | Corn

If past USDA Outlook Forums are any indication, the trade will be made aware of new crop seedings sometime Thursday afternoon, with the completed balance sheet due Friday. The risk of a sub-90 Mil Acre total has allowed the market to add some risk premium, but AgResource maintains a sell-the-rally mentality without adverse weather this spring. Ethanol margins have corrected some $.20/Gal in recent days, and weekly production (also out Thurs) should continue to erode seasonally.   The South American weather forecast has extended normal/above normal rainfall across Central & Northern Brazil through the first week of March, and climate guidance lacks any evidence of drought through the next 30 days. Us exporters announced this AM that South Korea canceled…

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Soybean/Meal Futures Slip Lower Into Midweek

Feb 22, 3:45 pm | Soybeans

Overnight strength in the soybean market gave way to liquidation and technical trading. Soybeans and meal were both in the red at the close, while soyoil traded inside on short covering. Commodity fund traders were estimated sellers of 5,000 soybean and 4,000 soymeal contracts, and buyers of 1,000 soyoil contracts.   The market is anxiously awaiting the acreage results from the USDA’s Outlook Forum later this week, which are expected to show increased US soybean acres. The chart shows the new crop soybean/corn ratio, which finished today at 2.55:1. Since the mid-90’s, there has been just 1 other year that the ratio was this high in late February, which was in 2005. But in that year, the soybean market was…

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Hogs Break In Technical Trade

Feb 22, 3:22 pm | Hogs & Pork

Hog futures gapped lower at the open on Wednesday, and fell to deep losses through the day on technical liquidation and fundamental ideas that the cash market is nearing a top.    The lean hog index gained $.17 on Wednesday to $77.24, and is projected another $.41 higher for Thursday. Negotiated trade was also called $.32 lower, with good volume noted in the afternoon direct hog report.   The pork cutout dropped $4.30 on Wednesday to $80.24 as the belly market collapsed and was off near $25 from Tuesday. Wednesday’s break is signaling a top in belly prices, but the trade will look to Thursday’s Cold Storage report for confirmation.   April hogs closed under the 50 day moving average…

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Mixed CBOT Awaiting USDA Outlook Forum

Feb 22, 11:26 am | Mid-day Commentary

 ** Dull and two sided has been the CBOT with neither rallies nor breaks able to carry through. Corn remains the CBOT stalwart with traders spreading long corn against soybeans and wheat, hoping for reduced 2017 seeding and bullish data from USDA at their upcoming Outlook Forum. The market lacks fresh news, but large yield reports from the Brazilian soybean harvest are keeping price pressure on the complex. The market feels like the a mixed close going home.  ** FAS announced the cancellation of 136,000 MTs of optional origin sales of corn for delivery to South Korea in the 2016/17 crop year. World importers are seeing cheaper prices from Argentina for corn shipment beyond the end of March. This is…

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Cattle Await Cash Market; No Worries for S American Weather

Feb 22, 6:53 am | AM Weather

** AgResource Daily Cattle Analysis: A mixed outlook is offered for the cattle market this morning. Cattle futures gaped higher at the open on Tuesday and also settled higher for the day. April futures opened and traded above the 50 day moving average throughout the day, but it was back on the lows by the close on late day selling.   Negotiated cattle markets were untraded through Tuesday, but early sales will get underway later this morning at the Fed Cattle Exchange. This week’s auction features consignments totaling 3,350 head. The beef market was firm Tuesday morning and mixed in the afternoon, with the choice value up $.90 at $191.81 and select was $.59 lower at $189.81. Steady cattle trade this…

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Lack of News Produces a Bounce at CBOT

Feb 22, 6:50 am | Morning Commentary

 ** 6:30 AM CST CBOT Prices: March soybeans are up 2.50 cents at $10.2875,  March corn is up 1.50 cents at $3.7025 while March Chi wheat is up 1.50  cents at $4.375. ** AgResource AM Grain & Oilseed Comment: Good Morning! CBOT corn, soybean and wheat futures are slightly higher in overnight trade in modest volume. Just over 11,000 contracts of March corn and March soybeans, and nearly 8,000 contracts of March Chi wheat have changed hands. Following 3 days of selling pressure, the CBOT is trying to bounce ahead of the USDA’s Annual Outlook Forum that starts on Thursday in Washington DC.   CBOT open interest declined on Tuesday as traders start to liquidate March futures ahead of the 1st…

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