CBOT Grain Futures Calls:
-December corn called 1 to 3 higher.
-November soybeans called 1 to 5 higher.
-December CBOT wheat called 1 to 3 higher.
US dollar is down 20 at 78.51. October crude is down $.23 at $71.20. Dow futures are up 7 points.
-Weekly jobless benefit claims will be out this morning. The trade had estimated it would be 565,000 compared with last week’s 576,000.
-Commerce Department will release revised second quarter GDP levels. Economists expect it show the economy fell by 1.5% instead of the original 1.0% contraction earlier released.
-German consumer sentiment rises to its highest level in 15 months.
-A Reuters poll of fund managers throughout the world reports on average they were only 57.1% invested in equities in August. That is little changed from the 57.0% level reported in July.
Go to our homepage, www.allendale-inc.com, to view our latest market update videos, recorded twice a day (before and after the grain market session).
-No change in the forecast this morning. Drew has the lowest this weekend will get to run from 36 to 39 degrees Sunday morning. Moderate weather and no frost is the forecast.
Grain Market Influences:
Weekly export sales are viewed as bullish soybeans, soymeal, wheat, neutral corn, and bearish soyoil.
Corn summary… There is nothing new to report today. We all know frost, if it happens in September, could take out quite a few bushels. If it happens in October it could take out a few bushels. However, what if it does not happen? Also as the table below shows, even if it happens in October, the damage caused will be limited compared to the size of our ending stocks. Right now, we still must point to the fact there are no forecasts from reputable weathermen suggesting a frost.
Israel purchased 20,000 tonnes of Black Sea, likely Ukrainian, corn.
The Buenos Aires Grains Exchange reports corn planting this fall will be 2 million hectares compared with 2.46 million last year.
Soybean summary… Where you have to be a little skeptical of frost impacting corn yields to a market moving degree, you can make a case for being concerned about soybean production. There will be a delayed harvest to begin with. The crushing plants - that are running- could scramble for a short period of time into October. On the other hand, in our opinion, at that same October time period China should be backing away from the US soybean table.
US Census Bureau reports July soybean crushing was 129.4 million bushels. That is above the 126.8 million bushels average guess.
Wheat summary… Fundamentals are still unchanged. Tremendous supplies of wheat in the world, and the US, will hold rallies to a minimum. We do have some questions on the current spring wheat quality (not yield) and production in Argentina and Australia. On some good news today Egypt awarded the US half of its 120,000 tonne wheat purchase.
Israel purchased 30,000 tonnes of Black Sea, likely Ukrainian, feed wheat.
The Buenos Aires Grains Exchange reports wheat planting, which was finished weeks ago, will be down 40% from last year to 2.75 million hectares.
Japan bought 160,000 tonnes of wheat. 97,000 of that came from US origin.
Contact Allendale to schedule a speaker for your Fall/Winter meetings!
-Wholesale beef closes up $.62 for choice and up $.03 for select.
-Pork carcass cutout closes down $.32.
-Cash hogs are called steady.
October Lean Hogs are called steady to 10 higher.
----Chart support 43.40 and resistance 52.00
October Live Cattle futures called 10 to 20 lower.
----Chart support 87.00 and resistance 89.75.
October Feeder Cattle futures are called steady to 10 lower.
----Chart support 99.65 and resistance 102.00.
Livestock Market Influences:
Today the CDC suggested the White House panel of swine flu estimates overplayed its estimated of swine flu deaths. "Everything we've seen in the U.S. and everything we've seen around the world suggests we won't see that kind of number if the virus doesn't change," says the CDC head.
Lean hogs summary… You could argue some of the selling today was based on the Time magazine article. As noted in the cattle comments, it raises fears in the consumer’s eyes about commodity pork and beef production. We can also point to some concern about this pork cutout (wholesale pork) as well. A $15.75 jump in ham prices in three days may be hard to sustain. We see the cutout dropped 32 cents this afternoon and would not be surprised to see it fall a little more in the coming days.
Live cattle summary… It is in your interest to see the new Time magazine article called “Getting Real about the High Price of Cheap Food”. It takes an ominous tone to commodity beef and pork production and compares it negatively healthwise to natural and organic meat. In other words, it puts fear into the average reader. That may be the biggest reason for today’s futures price decline when everything else in the short term is supportive. In the short term, we are getting clear signs the summer low in cash cattle was posted three weeks ago and we are now seeing the normal price rally into fall/winter.
CBOT Grain Futures Calls: