Futures Commentary and Analysis

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Which Direction Will Corn Expand Price Range?
Paul Georgy - IF - Thu Aug 10, 10:07AM CDT

Good Morning! From Allendale, Inc. with the early morning commentary forAugust 10, 2017.

Grain markets are range bound ahead of several reports today. All markets in general are nervous about what North Korea may do next.

Corn Production for 2017 is estimated by trade to be 13.855 billion bushels with an average yield of 166.2 bushel per acre. Ending stocks average guess.

Soybean production estimate for 2017 is 4.212 billion bushels with a yield of 47.5 bushels per acre. Ending stocks average guess is 424 million bushels.

USDA made slight adjustments only 7 times since 1980 on planted acreage. However, it is much more usual that they adjust harvested acres on the August crop production report.

“Pay attention to today’s FSA preventive plant number”, says Rich Nelson, Allendale Chief Strategist. “Since 2007 USDA has been releasing the crop insurance data in January. Since 2011 they have been showing the numbers each month from August through January. The planted acres numbers slowly grow from August on out. The August data for plantings is not complete. However, the preventive plant data in August is very solid. It has captured from 94% to 99% of the complete preventive plant picture”.

The FSA will give us the first look at the insured planted acres, prevent planting and failed acres at 2:00 pm CT this afternoon.

CONABwill release their estimates this morning on Brazil’s corn and soybean production.

Corn Price Range from Jan 1 through expiration of the Dec futures contract narrowest range has been 98.25 cents since 2007. The 2017 contract has only 43.5 cents trading range.

Funds were estimated to have been net buyers of 7,000 corn contracts and 2,000 wheat contracts on Wednesday. They were net sellers of 1,500 soybean contracts.

Ethanol production was 1.012 million barrels per day up by 10,000 barrels from last week. Stocks increased by 495 thousand barrels in 1 week.

Weekly Export sales report will be released at 7:30 this morning. New sales for 2016/17 marketing year is minimal as marketing year comes to a close. Estimates for the 2017/18 marketing year are: corn 400,000 to 600,000 tonnes, soybeans 250,000 to 450,000 tonnes and wheat 250,000 to 450,000 tonnes.

Fed Cattle Exchange offered 1,659 head for auction which only 518 head were sold for an average price of 115.04. Cash bids by packers were 114 to 114.50 yesterday afternoon.

Live cattle futures came under heavy pressure on Wednesday which traders attributed the selling to fund long liquidation.

October live cattle futures first level of support is the 200-day moving average at 107.00. If first level fails, next support comes in at April 5 lows of 105.00.

Lean hog futures have found support from spreading between lean hog futures and live cattle futures. Pork product values have declined keeping it competitive at the retail counter.

October Lean Hog futures have support at 67.00 and resistance at 69.00.

Dressed beef values were lower with choice down .59 and select down .25. The CME Feeder Index is 149.48. Pork cutout value is down .37.

Technical Chart of the Day

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