Good Morning! Paul Georgy with early morning comments for April 23, 2014 at 4:30 am.
Grain futures are mixed in a quiet overnight session.
Spread unwinding is the feature as traders wait for new news. The several points of interest traders are focusing on include weather forecast for US planting season, export news on soybeans to China and geo-political events in Ukraine. Chartists are watching support and resistance levels which could trigger money flow reactions.
The weather forecast has added a little more moisture for Midwest and the Euro model has snow for the northern Midwest. Read Allendale Meteorologist, Ryan Martin’s weather comments for all the details.
The long soybean – short corn spreads have been a feature the last few months. In this position traders are short 2 or 3 contracts of corn for every 1 long contract of soybeans. The news of China’s soybean purchases or cancellations will impact spreaders biases.
Ukraine’s Ag Ministry says that 97% of the early spring planting has been completed which amounts to 2.55 million hectares out of an expected 2.63 million hectares.
Abiove, Brazilian soy crushing association said on Tuesday they expect exports of 43 million tonnes of soybeans, down from its forecast of 44 million tonnes due to weaker Chinese demand.
The CME announced NEW contract limits for grain contracts. "On May 1, the initial daily limit for corn will drop to 35 cents a bushel from 40 cents. The initial daily limit will rise to $1.00 from 70 cents for soybeans and drop to 45 cents a bushel from 60 cents for CBOT wheat", the notice said.
The USDA released meat in cold stage numbers yesterday. Rich Nelson, Allendale’s Chief Strategist says, "It is not often that we get shocking numbers from the monthly Cold Storage report but that was the case this time. A massive 79 million pounds drawdown was made during the month of March. This was the largest pork drawdown in all previous March findings. It was also the third single largest monthly drawdown in history (after June 2013 and May 2008)."
"USDA found 404.7 million pounds of beef stocks at the end of March. This is 21% lower than last year (end of Feb was 16% lower). The drop compared with February was 5 million lbs. (normally a 2 million increase)."
The USDA April 1 Cattle-on-Feed report will be released on Friday at 2:00 pm. Beef cutout values are higher with choice up 2.15 and select up 1.55. The CME Feeder Cattle Index is 177.13. Pork cutout values are down 2.33.
Markets as of 4:30 AM
- May Corn + 1/4
- May Beans -10 1/4
- May Wheat + 3/4
- Jun Cattle -.37
- Jun Hogs -.05
- Jun Dlr -.16
- Jun S&P -.50
- Jun Crude -.50
- Jun Gold +2.60
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