By: Paul Georgy
Now that the March USDA report is out of the way, trade will begin to focus on the March 31st Quarterly Stocks and Prospective Plantings report. Allendale is expecting usage to be down in the second quarter which could mean an increase in corn ending stock by 200 to 300 million bushels.
NASS said the wheat crop good/excellent ratings improved in TX and KS while OK fell by 9% from last week.
Weather conditions have improved across the Midwest which is providing opportunity for farmers to move grain. Corn and soybean basis was lower yesterday afternoon.
Reuters is reporting that Syngenta AG is halting commercial sales of GMO Duracade in Canada because the product lacks approval in China.
There is talk that China may have cancelled up to 15 cargoes of soybeans out of Brazil. The question remains when will they cancel US purchases due to the back up of soybeans in China’s ports.
Funds are estimated to have sold a net 14,000 corn contracts, 6,000 wheat contracts and 12,000 soybeans contracts on Monday.
Chart watchers are now talking of possible seasonal tops in the grain futures. The May contract of corn has fallen back under the 200 day moving average. Soybeans and wheat are near support levels that, if broken, may cause long liquidation. Stay in touch with your Allendale Broker.
Can hog prices equal cattle values? This past weekend there were pork researchers suggesting summer hog supplies could be down as much as 12 to 15% from a year ago during summer months due to PEDv. When combining the loss of pork, beef and poultry production in yesterday’s USDA production report, it suggests meat supplies will be tight for several month. Lean hog futures continue to rise on tight supply concerns and fund and spec buying. Pork cutout values are up 2.95 to 114.94.
Beef values continue to strengthen which helps to improve packer margins and stabilize fed cattle values. Market ready supplies remain tight however as fed cattle numbers should increase going into June as suggested by recent Cattle-on-Feed Reports. Beef cutout was sharply higher on Monday with choice up 2.88 and select up 3.12. CME Feeder Index is 173.34.
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