CBOT Grain Futures Calls:
-December corn called steady to 2 higher.
-November soybeans called 10 to 15 higher.
-December CBOT wheat called steady to 2 lower.
US dollar is down 75 at 77.26. The dollar is at new lows for this downtrend. October crude is up $1.75 at $69.77. Dow futures are up 87 points.
-OPEC meets in Vienna tomorrow to decide output levels. The trade believes with crude at $70, they will vote to keep production unchanged. Compliance is expected to be an issue. Current levels are estimated to be under 70%.
-This weekend G20 leaders pledged to continue stimulus spending. That is viewed as positive by the markets.
-Federal Reserve will report on consumer credit levels today. The trade expects the report to show consumer borrowing fell by $4.5 billion, on an annual basis, 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).
-Little change in the forecast. Warmer temps will appear off and on with periods of light rain after each.
Grain Market Influences:
The significant move overnight in the US dollar will override grain based fundamentals this morning.
On Friday, Allendale released the results of the 20th annual farmer crop survey. We compute, from those surveys, a corn yield of 164.08 and a soybean yield of 43.10.
Corn summary… Current forecasts that we watch still have not changed. It still calls for a frost nearing the end of the month. What will be interesting is to see what happens to the forecast on Tuesday when we get back from the three day weekend. This almost feels like a three day weekend in July, we leave today in anticipation of what changes the forecast gives us Tuesday. Right now without a frost we look for corn prices to be around 290 at harvest. If there is a serious frost, then we look for around 370.
China’s weekly corn auction, held last night, was boosted to an offering of 2.9 million metric tonnes instead of the usual 2.5 mmt. Of that amount 1.86 mmt was purchased.
Philippines is looking to sell some excess corn to India and Kenya. Massive inflows of cheap feed wheat this past year has given them a surplus of corn at around 800,000 tonnes.
Thailand is seen selling 1 million metric tonnes of corn in the next six months. The country has supplies of low quality old crop it is trying to sell and is current harvesting a large crop.
Soybean summary…Yesterday’s trade through the 940 support level opened the door for sellers. What was once seen as a tough target to get past is now gone. Small sellers may have stayed out of the market for the fact that each time we approached that major support level the beans bounced back. With that support taken out the next chart support is not found until 882. That number does not scare sellers at least for the short term.
One analyst estimates China will increase its soybean purchases from 39 mmt in the past old crop year to 42 mmt in the new crop year.
China reports palm oil imports in August were a record 700,000 tonnes. July imports were 670,000 tonnes.
Wheat summary… Our downside target has come and gone with wheat still selling in its down trend. Much as we talked about yesterday, the wheat did follow action seen in the corn so it is not beyond expectation for it to continue lower. With the large supplies in the world market one of the few areas that this market could find support would be on a rally for row crops.
France increases its estimate of the wheat crop from 36.08 to 37.3 million metric tonnes.
Japan seeks 133,000 tonnes of wheat in its regular tender. 70,000 of that is slated for US suppliers.
Poland’s grain crop may be estimated closer to 28.7 mmt from previous estimates of 26.0-27.2.
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-Wholesale beef closes down $.88 for choice and down $.85 for select.
-Pork carcass cutout closes up $.35.
-Cash hogs are called steady.
October Lean Hogs are called 20 to 40 higher.
----Chart support 46.500 and resistance 51.20
October Live Cattle futures called steady to 20 lower.
----Chart support 86.20 and resistance 89.75.
October Feeder Cattle futures are called steady to 10 lower.
----Chart support 96.65 and resistance 101.50.
Livestock Market Influences:
Lean hogs summary… October futures managed to pick up an additional $2.67 this week. This comes after wholesale pork lost $3.86. That large of a difference does not happen often. We’ve been noting this week that HOW this market trades right now is more important than the bearish fundamental picture. The reason for this is that October and December futures are trying to guess where cash hogs will be on October 14 and December 14.
Live cattle summary… At the time of this writing we are still waiting on cash cattle trading in the live based Kansas through Texas areas. Bids are $84 and feedlots are down to $85 asking prices. Last week’s cash was $85. On the negative end, we will note Nebraska traded the remainder of its cattle this week at mostly $130. That is down $1 to $2 from last week which equates to $1 lower on a live basis.
CBOT Grain Futures Calls: