Commodity Kick Start
CMEGroup Grain Futures Calls:
-May corn called 5 to 10 lower.
-May soybeans called 3 to 7 lower.
-May wheat called 3 to 7 lower.
March US dollar is up 5 at 80.65. April crude is up $.20 at $81.69. March Dow futures are unchanged.
Economic Information:
-OPEC upped its estimate of 2010 oil demand. The group expects 2010 to see an increase of 880,000 barrels per day over 2009 levels from its previous guess. Their previous estimate was for an 810,000 barrel per day increase.
-The American Petroleum Institute indicated an extra 6.5 million barrels were added last week.
-China reported its February imports of energy products was up 14% while exports were down 41%.
-One analyst with the Bank of Ireland estimated crude oil prices at $70 to $80 were fair.
-Business inventories for January will be released at 9 am this morning. The trade expects them to have risen 0.2%.
-An analyst with Credit Suisse suggested kept his view that mid 2010 pricing for the S&P 500 stock index was 1,220. Current price for the index is 1,140.
-OPEC oil ministers suggest they are content with current prices. OPEC meets on March 17. The trade expects them to make no change in current production targets.
Weather:
-Rains are coming as expected for the Midwest. Forecasters are now talking they may last into the weekend instead of ending on Friday. Temps will continue to allow for snow melt.
Grain Market Influences:
This morning’s report was bearish for grains. Details are below. It will cap any rallies until planting and likely pressure corn.
Corn summary… In the past four trading sessions this market has taken almost 15 cents off May futures. Traders are concerned tomorrow morning’s report may show a moderate decline in 2009 production that is almost equally offset by lower export numbers.
USDA lowered the 2009 corn crop by 20 million bushels but dropped exports by 100 million. The net result is an increase in stocks from 1.719 billion to 1.799. The trade was expecting a slight decrease.
Soybean summary… Considering the fact that Brazil upped its soybean production estimate, this market did great today. They are now suggesting the crop is 67.57 million metric tonnes. That is just above USDA’s 66 mmt total.
USDA lowered the 2009 soybean corn crop by 2 million bushels and increased their crush and export forecast. Endings stocks fell as expected from 210 million bushels to 190. The trade was expecting a slight decrease. A slight increase in South American production happened which was expected.
Wheat summary…Moisture levels are great for winter wheat. As we begin to turn our attention to the emerging crop, we must remember the key yield determinant for wheat is getting timely rains in the late March and April timeframe.
USDA lowered old crop wheat demand and increased end stocks from 981 million bushels to 1.009 billion. They are now over 1 billion. The trade was expecting a slight decrease.
Egypt seeks cargoes of wheat. They are looking for cargoes of 60,000 tonnes of US wheat and cargoes of 60,000 tonnes of optional origin product. Keep in mind these traditionally turn into large sales. They are no longer including Ukrainian product.
Livestock Comments:
-Wholesale beef closes up $.21 for choice and up $.91 for select.
-Pork carcass cutout closes down $.12.
-Cash hogs are called steady.
Livestock Futures:
April Lean Hogs are called mixed.
----Chart support 69.50 and resistance 74.00.
April Live Cattle futures are called 10 to 20 higher.
----Chart support 91.00 and resistance 93.50.
April Feeder Cattle futures called 10 to 20 higher.
----Chart support 104.10 and resistance 106.50.
Livestock Market Influences:
Lean hogs summary… Pork processors are taking action against negative margins this week. USDA revised yesterday’s slaughter down from 414,000 to 409,000 head. Today’s estimate was a low 402,000. Based on estimates for available supplies, processors could be knocking 420,000 head weekday kills.
Live cattle summary… We saw Nebraska bids today at $143. That price on a Tuesday, would imply they are ready to buy cattle steady at last week’s $144 or maybe even $145. Another positive thing to note here is wholesale beef posted a moderate gain.
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