Updated La Nina Outlook Today
Jan 23, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for January 23, 2018.
Starts Today With a Year Ahead Weather Outlook!
How Will La Nina Impact Crops in 2018? By Drew Lerner Jan 23rd(no recording)
High Yields the New Normal? By Rich Nelson Jan 24th (will be recorded)
Are We in For a Bull Ride in 2018? By Ryan Ettner Jan 25th (will be recorded)
Grain Markets remain focused on South America and the potential for yield losses as some areas look to suffer from too much rain, while others aren’t getting enough. Outside markets cheered the passage of a short-term spending deal out of Washington yesterday, but will continue to watch negotiations ahead of the new February 8th deadline.
World Weather says, “GFS and European model runs continued to bring back increasing rainfall in Brazil’s center west and northern center south crop areas after Wednesday of this week. The chatter in the market place this evening is over the increased rainfall that becomes heavy to excessive during a ten day period that begins this weekend and ends early in the week of February 5.” Get a full weather outlook for South America and the US this afternoon with World Weather’s Drew Lerner.
Export inspections for the week ending 01/18/2018 reported wheat exports of 337,980 tonnes, corn 668,949, and soybeans 1,419,430.
Louis Dryfus reports that a recent shipment of US soybeans to China was the first agricultural trade in the world that used blockchain (the same technology that Bitcoin is based on). The letter of credit and shipping certificates were created on the Easy Trading Connect platform.
Managed Money Funds were estimated buyers of 7,000 soybeans, and 2,000 wheat in yesterday’s trade. They were sellers of 5,000 corn contracts.
The House passed legislation to end the government shutdown, hours after Senate Democrats dropped their opposition to the plan. In return for Democratic support for the bill, which would fund the government through Feb. 8, Senate Republicans agreed to hold a vote on immigration legislation in the coming weeks. (Politico)
Live cattle futures rallied on Monday as the winter storm slowed movement of cattle across the upper Midwest. Traders anticipate packers will be needing inventory to reach full processing capacity when the storm moves out of area. Asking prices by feedlots are higher with showlist declining by 14,800 head this week.
Spreading has been a major feature in the livestock complex as funds exit positions ahead of cold storage and cattle-on-feed reports this week. Traders are also concerned cattle will be set back and cause an oversupply down the road which has caused an interest in buying near contracts and selling the deferred.
February live cattle closed at highest level since November 30, 2017 which should be a positive signal. However the gap left with Monday’s higher opening could act as a magnet to be filled. Technical indicators are getting near the overbought level.
Chart resistance in the February contract crosses at 126.77 with support coming in near 122.00.
Cash hog trade has been disrupted due to the winter storm across IA and MN. Several pork production plants were closed which should provide support to product values. The real determination of hog prices will be how quickly these plants can get back to full capacity.
February lean hog futures drifted lower on Monday testing the 20 day moving average. Chart support crosses at 71.00 and resistance near 74.00.
Dressed beef values were mixed with choice up .21 and select down .64. The CME Feeder Index is 148.01. Pork cutout value is up .73.