Monday, April 14, 2014

Key Factors Affecting Trade This Wee

By: Paul Georgy

Good Morning! Paul Georgy with early morning comments for April 14, 2014 at 4:30 am. 

Grain futures are higher on an increase in tension between Ukraine and Russia, US weather and money flow.

The USDA will give us the first weekly planting progress report this afternoon. Trade is expecting 2% to 5% of corn planted nationally. The 5 year average for April 14 is 7% planted.

Weather will be the focus this week as cool temps and lack of planting progress are on traders’ minds. You are able to get the full insight from Allendale’s in-house meteorologist Ryan Martin by clicking Allendale Weather.

NOPA will release crush data on Tuesday. Average analyst estimates are 146.1 million bushels for the March and 1.917 billion pounds for soyoil stocks.

The soybean market is very concerned about the Chinese default on several loads of soybeans. A Chinese research firm is suggesting as much as 2 million tonnes may have been defaulted on due to the importers inability of getting a line of credit.

Money flow has been a huge driver to the Agricultural markets in recent months. Managed Money Funds were net sellers on Friday’s CFTC commitment of traders report as they reduced long positions in corn, soybeans and wheat.

The geo-political unrest in Ukraine is escalating as pro-Russian activist take over government buildings and Ukraine vows force to regain control. Russia has warned against any use of force by Ukraine.

Outside markets are stronger this morning as traders have a risk on attitude.

Cash cattle traded at 147 in TX and KS late on Friday which was 1.00 lower than the previous week. The drop in product is giving packers a negative margin. Beef cutout values were under pressure again on Friday with choice down 2.88 and select down 2.12. CME feeder Index is 178.30. Product is not likely to see post Easter Holiday featuring until next week.

Pork cutout values are up .29. Hogs supplies are tight which is causing the weekly slaughter declines. A meat price rally is showing up at the retail counter and it remains to be seen how consumers will react. April contract expires today and June is discount to the cash index. Look for the livestock futures to start the week a bit lower.

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