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US Stocks Report Serves Up a Little Something for Everybody

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Good Morning! From Allendale, Inc. with the early morning commentary for April 11, 2018.

Grain markets are searching for the next catalyst that will drive prices. Will it be weather, politics, demand or a concern over supply?

USDAs April Supply and Demand numbers had a little something for the bulls and bears. The soybean complex got the friendly news when they lowered the US ending stocks by 5 million to 550 million bushels. Trade was expecting and increase in ending stocks as the recent quarterly stocks report would suggest. Argentinas soybean crop was estimated at 40.0 mmt compared to last months 47.0 mmt, by USDA. World stocks were dropped by nearly 4.0 mmt.

Corn, on the other hand, saw minimal change as the USDA made very minimal adjustments to the balance sheet, which were expected by the trade.

Wheat was hit with a bearish bias as they raised the US ending stocks by 30 million bushels to 1.064 billion.

With the USDAs fundamental data now common knowledge, the grain and oilseed futures will have to focus on other factors. Further price rallies will give the US farmers financial reason to seed more acres as planting season approaches. Weather concerns of delayed planting could be a factor for price volatility as we approach the Too Season, too cold, too wet, too dry or too hot. Technical traders will be focusing in on chart patterns and momentum indicators. What ever the reason for price fluctuation, there is a reason to put your marketing plan into action. Contact your Allendale representative now.

Funds were thought to have been net sellers in corn futures of 6,000 contracts. They were net buyers of 5,500 contracts in soybeans and 4,000 contracts in wheat.

Trump administration will delay any moves to reform the nation's biofuel policy for about three months. The decision comes after President Donald Trump failed to broker a deal between Big Oil and Big Corn during meetings over months about the future of the U.S. Renewable Fuel Standard.

President Trump cancels his trip to The Summit of the Americas in Lima, Peru later this week. His reason for canceling is to deal with the options for military action against Syria. Trade talk believes it could be because there is no deal on the table to rewrite NAFTA, time will tell.

Cash cattle traders are expected to be holding out for at least steady compared to last week. However, feedlot will need some support from a strong futures complex. Cutout values are struggling under the heavy supplies of beef and weather providing no help for the cook-out season.

June live cattle futures have consolidated for the past 4 sessions providing resistance at 105.17 and initial support at 99.50 and long-term support at contract lows, 97.07.

Pork supplies remain burdensome as hogs keep coming to market. However, Allendales Rich Nelson is looking for a positive turn to live hog prices due to strong seasonals.

June lean hogs ran into resistance at 77.00 on Tuesday only to close at lower. Technical support now crosses at 72.35. April lean hog futures will go off the board on Friday, April 13.

Dressed beef values were lower with choice down 1.53 and select down 1.81. The CME Feeder Index is 135.41. Pork cutout value is down .05.

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About the author

Paul Georgy serves as president/CEO of Allendale, Inc., a worldwide agricultural advisory and research firm that provides agricultural commodity price research and risk management alternatives for producers, major food companies, international corporations, foreign governments, and major news vendors.

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