The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
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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 August 27, 2018.
Grain markets are readying for a week of potential announcements that could impact the selling pattern of agricultural producers. Midwest harvest is getting started in some areas, producers need to finishing cleaning out their bins, processors are lowering bids as harvest nears, first notice day for September futures and the turning of a page on the calendar will impact price trends in the week ahead.
Allendale’s Annual Yield Survey runs through the end of this week. Participate in the survey by clicking here. You know your field better than anyone! We will be releasing the survey results on September 5. You can also share the results of your farm by calling us at 800-262-7538.
Pro Farmer released their estimates for 2018 US corn yield at 177.3 bpa which is -1.1 bpa versus USDA. Soybean yield was pegged at 53.0 bpa which is 1.4 bpa versus USDA’s August estimate.
US Ag Secretary says details of $12 billion farm aid program will be announced today. Trade talk is that soybean growers will receive $1.65/bushel payment with payments expected as early as September through November.
Farm selling of soybean dries up until tariff bailout details are announced although US soy crush plants reduced basis bids indicating their expectations for early harvest of a large crop.
CFTC Commitment of Traders report showed managed money funds net buyers of 10,138 contracts of corn and 18,875 contracts in soybeans last week. They were net seller of 6,136 contracts in wheat.
Crop ratings this afternoon are expected to be steady to lower for corn and soybeans as seasonal trade is lower as crops mature. Last week's rains could provide a benefit to soybeans.
President Trump said over the weekend that a “big trade agreement” with Mexico is coming soon.
U.S. economic markets this week will focus on trade developments as a U.S. trade agreement with Mexico could be announced as soon as today but as US/Chinese trade relations remain tense after last week's mid-level trade talks ended without any progress. This week's sale of $121 billion of T-notes and a light earnings week with 13 of the S&P 500 companies scheduled to report will also be watched closely.
Managed money funds were net buyers in live cattle and lean hogs of nearly 7,000 contracts. They are now holding net long positions in livestock.
Cash cattle trade was a disappointment last week as the average trade was 108.50 compared to 110 the previous week. Looking ahead, packers will be gathering inventory for a shortened production week due to the Labor Day holiday. Product values will likely see pressure as retailers are preparing for post-holiday demand. Futures closed below uptrend line support throwing fuel on the bears fire. October live cattle futures closed below the 108-level setting the next downside target at 105.
Lean hog prices continue to decline daily as packers are able to fill their processing needs easily. Hog supplies are plentiful as we approach the short work week. The CME Cash Hog Index has now slipped below the October futures.
Lean hog futures were 6.82 lower for the week as of Friday. Support crosses at Friday’s low of 50.17 with resistance at 54.00 level.
Dressed beef values were lower with choice down 1.05 and select down .17. The CME Feeder Index is 150.85. Pork cutout value is down .67.
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