The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
Paul Georgy serves as president/CEO of Allendale, Inc., a worldwide agricultural advisory and research firm that provides agricultural commodity price research and risk management alternatives for producers, major food companies, international corporations, foreign governments, and major news vendors.
Good Morning! From Allendale, Inc. with the early morning commentary for March 5, 2018.
Grain market traders are keeping an eye on weather forecasts, however, the emotion is waning ahead of the USDA’s March Supply and Demand report later this week. Money flow and spreading will likely be a feature this week as traders prepare for the report and the final decision from the White House on tariffs.
Allendale's Annual Planted Acreage Survey is going on now through March 9th. The results will be released on March 14 during a live Ag Leaders Webinar (Register Here). You can help - report your data online Click Here or call 800-262-7538.
Weather forecasts are for the US southern plains to remain dry. Argentina is getting some scattered showers in the north however the central and southern growing areas next chance of rain is next weekend.
USDA will release their March estimates for the 2017/18 supply and demand on Thursday, March 8, 2018.
Bloomberg survey has trade expecting a slight decline in US corn stocks with soybeans and wheat staying virtually unchanged from USDA’s February numbers. The trade is looking for nearly a combined 6.0 mmt drop in Argentina and Brazil’s corn production. Trade analysts guess is for a 5.5 mmt drop in Argentina’s soybean production and an increase of nearly 2.0 mmt in Brazil’s soybean production compared to USDA’s last projections.
Cash bids on the river system throughout the Midwest saw prices slip due to a pickup in movement by farmers after last weeks rally. High water is also causing loading delays thus pressuring values.
CFTC Commitments of Traders report showed managed money funds were large net buyers in corn and soybeans last week. They added 40,446 contracts of corn making them net long 59,120 and were net buyers of 48,269 soybean contracts making them long 147,380 contracts. They covered only 6,407 contracts, remaining net short 60,632 contracts of wheat.
Brazil sees opportunity to increase its position as an agriculture powerhouse as trade tensions increase between the United States and China after U.S. President Donald Trump announced his plan for steel and aluminum tariffs last week.
CME raises wheat margins by $150 for the 3 nearby contracts. The Kansas City wheat went from $1,050 to $1,200 per contract while Chicago wheat futures went from $1,000 to $1,150.
Managed money funds were net buyers in live cattle futures and net sellers in lean hogs.
Cash cattle this week should be steady to higher as cutout values firm and packer margins are in the black. However, the cattle futures and US stock market’s direction may have an influence on sellers’ convictions.
April live cattle closed on key support at the 122 level. A lower close could push prices to the next level of support which crosses at 120.20. Resistance on the chart crosses at 125.67.
Weekly hog production was 4.4% higher than same period a year ago. And higher than the 2.7% pace over the previous 4 weeks. However, as a positive, we are approaching a seasonal decline in production and export sales last week were up 30% from last year.
April lean hog futures closed near important support ant 66.80. the next support crosses near 65.00 level. Resistance is 69.90.
Dressed beef values were mixed with choice up .22 and select down .96. The CME Feeder Index is 146.03. Pork cutout value is down .45.
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