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Technicals Present Heavy Picture For Grains


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Good Morning!From Allendale, Inc. with the early morning commentary forJune 7, 2018.

Grain marketsare nervously waiting for the next shoe to drop. Will it be a change in weather forecast for the Midwest, retaliation by country buying US product or another move by Washington. USDA June S&D will be release next Tuesday.

Rich Nelson, Allendale Chief Strategist,discussesthe soybean crop ratings.View the FREE webinarhere.

Weekly Export salesreport will be released at 7:30 am today. Trade estimates are: wheat, old crop (300,000 (100,000), new crop 250,000 to 450,000 mt. Corn old crop 600,000 to 900,000 mt. Soybeans old crop 200,000 to 500,000 mt., soymeal old crop 50,000 to 350,000 mt., new crop 0 -100,000 mt. Soyoil old crop 5,000 to 25,000 mt., new crop 0 8,000.

USDAs June Supply and Demandreport will be released on Tuesday June 12 at 11:00 am CDT. Bloombergs survey of analyst suggests a lower corn stocks at 1.652 billion bushel, an increase in soybean stocks to 440 million bushel and wheat stocks coming in near unchanged.

Fundswere estimated to be net sellers of 16,500 corn, 5,500 soybean, 2,500 soymeal and 2,500 soyoil yesterday. They were net buyers of 8,000 wheat.

President Donald Trumpis not backing down from the tough line he has taken on trade, the White House's top economic adviser said on Wednesday, setting the stage for a showdown with top allies at this week's G7 summit in Canada. (Reuters)

Weekly ethanol productionlast week was unchanged from the previous week at 1.041 million barrels per day. That was 4.2% over last year and year to date pace is still 2.3% over last year, which is just below USDAs balance sheet estimate of a 2.6% increase in corn for ethanol.

Brazilian soybeanproducers have so far sold 73 percent of the record 2017-18 crop, far ahead of sales at this period last season as a weaker local currency boosts revenue denominated in reais and stimulates trading activity. According to a report from agricultural consultancy Datagro, sales at this time a year ago were only at 61 percent, while the five-year average shows sales at 70 percent. (Reuters)

Fed Cattle Exchangehad 568 head offered for sale on Wednesday auction, no cattle sold. Packers still expected to pay up for cattle due to their positive profit margins and wanting to keep chains running at capacity. However, we are getting close to the time when retailers are finished buying for the holiday (July 4th). Then comes a weak demand period for beef until early August.

No deliveriesagainst the June live cattle futures however the oldest moved up to October 26, 2017.

June cattle futuresrallied on Wednesday taken out and closing above chart resistance however the rally stalled at the 100-day moving average. Resistance comes in at 110.27 and support at 104.50.

Cash hog pricescontinue to grind higher as many producers are attending the World Pork Expo.

Technical buyinghas been a support to lean hog futures. Funds have been holding a net short position in lean hogs. Tariffs on pork by Mexico and the possibility from other countries are creating nervous trading conditions. July futures contract down trend resistance line crosses near 80.00. A close above that level could be a signal of a trend change.

Dressed beefvalues were lower with choice down .61 and select down 2.20. The CME Feeder Index is 139.21. Pork cutout value is down .29.



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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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