Allendale Early Calls: E. Coli Not Expected To Hurt Beef Sales, Soybeans Lead Market
11/03/2009 08:51AM
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CBOT Grain Futures Calls:
-December corn called 4 to 5 lower.
-January soybeans called 4 to 5 lower.
-December CBOT wheat called 5 to 7 lower.
US dollar is up 40 at $76.86. December crude is down 53 at $77.60. Dow futures are down 50 points.
Economic Information:
-President Obama on Monday set to clarify expectations for the current economic recovery by saying unemployment is the last to recover and would rise for weeks to months.
-The Federal Reserve meets today and Wednesday to decide US short term rates.
-Monday’s economic reports on manufacturing activity and pending home sales were much stronger than expected.
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Weather:
-This week should see good drying and harvest conditions into the weekend. Look for rain next week to setback harvest progress. Winter wheat planting should continue progress during the dry periods.
Grain Market Influences:
Corn summary… New month, new money. Who else can run these markets this much higher this fast? In the last few trading sessions grains have not followed outside markets nearly as much as they had. Today the funds sure threw us a curveball when they bought grains very aggressively without the dollar falling off.
USDA reported harvest activity for corn rose from 20% to 25% complete. That was within expectations of 24%-26%.
Soybean summary… Once again it was the bean market that looked to be the leader today. Early support was seen and was expected due to the rains in the Delta. Bushels of damage and losses can only be estimated as of now and until we see some solid numbers there should still be an amount of expected support.
German oilseed analyst Oil World has reduced its forecast for Argentina’s soybean crop to 50.0 mil tonnes from 52.0 million tonnes.
There were no deliveries reported Monday afternoon for November soybeans.
Soybean harvest rose from 44% to 51%. That was lower than expectations of 55%-60% complete.
Wheat summary… As a percentage, wheat was once again the largest mover. There is no question at all it is the market the funds move the most. Certainly there was no fundamental change that warranted the move on the close.
Winter wheat plantings rose from 76% to 79% complete. That was close to expectations of 80% complete.
Ukraine is estimated to be at 96% harvested and is looking to be about 6 million tonnes lower than their record 2008 crop.
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Livestock Comments:
-Wholesale beef closes up $.80 for choice and up $.45 for select.
-Pork carcass cutout closes up $.51.
-Cash hogs are called steady.
Livestock Futures:
December Lean Hogs are called steady to 10 lower.
----Chart support 54.70 and resistance 58.350.
December Live Cattle futures called 20 to 30 lower.
----Chart support 85.20 and resistance 87.60.
November Feeder Cattle futures are called steady to 10 lower.
----Chart support 94.75 and resistance 97.00.
Livestock Market Influences:
Lean hogs summary… An Indiana farm has been confirmed with the new H1N1 variant of swine flu. Both the human caretaker and the hogs themselves have fully recovered. The hogs will go to slaughter through the normal channels. You may remember last month six Minnesota pigs got it but that was contracted at the fair.
Live cattle summary… This morning we noted the two deaths and 26 illnesses related to e-coli should have no bearing on prices or beef demand. US consumers have little concern in the safety of their beef. In addition, the half million lbs of ground beef involved pale in comparison to previous e-coli concerns which involved millions of lbs.
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