Drew Lerner Shares 2018 Weather Outlook
Jan 24, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for January 24, 2018.
Allendale Ag Leaders Conference Series Rolls On
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 are quiet as markets wait for a potential disruption in corn and soybean supplies. Argentina’s weather is not considered ideal but seems to be sufficient enough to keep crops growing. Trade also believes the Brazilian crop could offset the reduction in Argentina.
US Dollar index slips to a 3 year low against the basket of currencies due to the strength of eurocurrency.
Drew Lerner from World Weather Inc. shares his long-term weather outlook at Allendale Ag Leaders Conference. He says summer growing season will be impacted if a stronger La Nina event develops in the next 4 to 5 weeks. Talk to your Allendale Broker and get the full outlook.
Funds were thought to have been net-sellers of 6,000 corn contracts and 3,500 wheat contracts on Tuesday. They were net buyers of 3,000 soybeans and 4,000 soymeal.
Asia-Pacific trade pact will be signed in Chile in March by eleven countries without the US. The pact puts export demand for US wheat “at serious risk,” as it gives a $65 per ton advantage to Canadian and Australian wheat exporters.
Lack of farmer selling of corn has some elevators and Illinois river terminals raise basis bids. Soybean basis is mostly steady.
In Montreal, officials opened a key round of negotiations to modernize NAFTA on Tuesday amidst optimistic signs, due to comments from US President and Canadian negotiator.
USDA Monthly Cattle-on-Feed report will be released on Friday at 2:00 pm. Trade estimates are On Feed Jan 1, 107.7%, Placed during Dec 96.9%, Marketings during Dec 98.8% (one less production day than a year ago).
Monthly Cold Storage report which should have been released yesterday will be released this afternoon due to the government shutdown.
Fed Cattle Exchange has 494 head of cattle being offered at today’s auction. Feedlots are looking for higher prices this week. Offers are 125 to 126, showlist are lower and cutout values are higher. However, packer demand may not be as great because of the weather shutdowns this week.
February live cattle futures are leading the complex higher on bull spreading and fund buying. Technical traders have jumped on the buying as key chart resistance was broken on Monday.
Chart support crosses at 122.76 while resistance comes in at 126.77 in the February cattle contract.
Monday’s hog processing effort was lowered by USDA from the original 405,000 to 398,000 head. Tuesday’s run was estimated at 453,000 head which makes an 80,000-head deficit from where they would have been without a weather problem.
February lean hog futures are holding an uptrend which was tested on Tuesday at 71.50. This level now becomes key support, resistance crosses at 76.00.
Dressed beef values were higher with choice up 1.78 and select up .64. The CME Feeder Index is 147.88. Pork cutout value is up .86.
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