Traders Looking Past Weather To USDA Report

Traders Looking Past Weather To USDA Report

Aug 07, 2017

Good Morning! From Allendale, Inc. with the early morning commentary for August 7, 2017.

Grain markets are firmer, regaining some of last week’s losses and large fund selling as reported of Commitment of Traders Report. Thursday’s USDA report will take center focus this week unless weather pattern takes unexpected shift.

Weather forecast for the Midwest remains similar to that of last week and should continue out through at least August 17. Favorable crop development will continue in areas of adequate subsoil moisture, but crop stress will continue in the drier areas, despite cooler temperatures.

Trade is looking for crop conditions to decline slightly in corn and improve slightly in soybeans on this afternoon’s report.

USDA Supply & Demand report average estimates for Thursday’s release: US Corn production is 13,807 million bushels on a yield of 165.9 bpa and Soybean production at 4,203 million bushels on a 47.4 bpa yield, while All Wheat production is estimated at 1,717.4 million bushels.

Grains closed lower for the week on Friday with Dec corn down 7 cents, Nov soybeans down 56.5 cents, and Dec wheat was down 23.5 cents.

CFTC Commitment of Traders report show managed money funds were net sellers across the grain complex. They reduced long positions in corn by 22,171 contracts, soybeans by 11,090 and wheat by 15,660 contracts.

Open Interest in corn on Friday had a 17,678 contract decline while wheat and soybeans showed a slight increase.

AgRural, a consultancy group in Brazil projects that countries safrinha corn harvest 74% complete compared to 67% four-year average.

US oil rigs in production drop by 1 to 736.

Eco Traders focus this week on four appearances by Fed officials and a relatively light week for U.S. economic reports with the focus on the PPI and CPI reports late in the week.

U.S. employers hired more workers than expected in July and raised their wages, signs of labor market tightness that likely clears the way for the Federal Reserve to announce next month a plan to start shrinking its massive bond portfolio. (Reuters)

Cattle on Feed early estimates for the August report due to be released on August 25th have numbers in feedlots not seen since 2006. Placements are expected to be as much as 10% higher than last year.

Cash cattle trade ended the week on a firm note and early calls lean toward steady higher values this…

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