GOOD MORNING!


US COMMODITIES


OPENING REVIEW


Friday, February 23, 2018


 


Current Review:  Corn is trading up 1 cents, soybeans up 2-4 cents, wheat up 2-4 cents, cattle down 10-30 cents, and hogs up 10-20 cents.  If you would like opening calls via text or email, please call 1-800-247-4071.  View report estimates and crop ratings online CLICK HERE.  Need assistance marketing your grain? Ask about our personal Farmer Marketing Program.    Text or email usc@uscommodities.com with questions.


 


 


GRAINS: 


  1. Trends are mixed.

  2. Corn: March corn in day 26 of a buy signal, December in day 11 of a buy signal.

  3. Soybeans: In day 8 of a buy signal.

  4. Chicago Wheat: in day 3 of a sell signal.

  5. KC Wheat: Day 2 of a sell signal.

  6. Soymeal: in day 11 of a buy signal.

  7. Soybean Oil: in day 14 of a sell signal.

  8. Oats: in day 6 of a sell signal.

  9. Open interest yesterday: Corn down 7,004, Soybeans up 1,599, Wheat down 5,418 contracts.

  10. Funds bought 7,000 corn contracts yesterday, 3,000 wheat, sold 5,500 soybean contracts.

  11. Corn exports were strong but cancellations hit soybeans. Export Sales: Corn 1,620,900 mts vs est 1,000,000-1,600,000 mts, Soybeans 113,000 mts vs est 600-1,000,000 mts, Wheat 382,500 mts vs est 250-550,000 mts.

  12. 106,000 mts of soybeans sold to an unknown this morning, 115,000 mts of corn sold to Egypt.

  13. China’s January corn imports were 390,000 mts, up 174% vs a year ago.

  14. March corn resistance at $3.70 and then $3.74 ¼ with support at $3.64 ¼ and then $3.61 ½.March soybeans resistance at $10.39 and then the contract high of $10.50 ½, with support at $10.14 and then $10.00. November soybeans resistance at $10.32 ½ with support at $10.18 and $10.11.

  15. March options expire today.

  16. March soybeans have rallied 87 cents/bu since January 12th.

  17. The USDA Ag Outlook was considered neutral.  Corn acres projected at 90.0 mln vs 90.2 mln last year. Soybean acres projected to be 90.0 mln acres. Down from early analyst projections of 90.1 mln. Cotton acres are expected to gain 700,000 acres to 13.3 mln acres. Rice and spring wheat acres are expected to increase too. 

  18. The USDA will release their full 2018/19 balance sheets.

  19. Argentina and southern Brazil are expected to remain dry in the 1-5 day forecasts. 0.50 to 1.00 inches in the Brazil north of Parana.  6-10 day forecasts are also dry for Argentina.  Northwest Argentina has a better chance to get some showers at the end of next week, but is limited to about 40% of Argentine corn and soybean areas. Northern Brazil sees harvest disruptions due to rain showers, but Parana remains dry through the next week. Rain chances late next week for North and West Argentina.  60% of the production areas remains stressed.

  20. The South Plains remain dry in the 1-5 day.  Rains mostly in the South East Midwest.  6-10 day forecasts are mostly dry again for the south plains, with chances of 0.50-0.80 inches of rain for KS/OK/TX eastern parts late.

  21. Average wheat price for 2018/19 is projected at $4.70/bu.

  22. The Buenos Aires Grains Exchange dropped their corn production estimate to 37.0 million metric tons versus 39.0 million metric tons in a previous estimate

  23. In Parana, Brazil the Safrinha corn crop planting is seen at 16% complete. The second corn crop is pegged at 12.35 mts, compared to 12.28 mts previously Paraná is Brazil's 2nd largest soy and corn producer. Soy harvest there is at 9 pct now vs 31 pct last year. 2nd corn crop planting is at 16 pct of area vs 48 pct last year. That's what wetter than normal

  24. The US Commerce Department announced anti-dumping duties on biodiesel from Argentina and Indonesia, raising the import tax rates up to 159% and 341% respectively. The new tax is subject to a ruling by the US International Trade Commission, but for now virtually guarantees no imports from the two countries. Argentina calls the duties, "arbitrary and illegal."

  25. Top Trump administration officials are planning two summits to discuss possible changes to the U.S. biofuel mandate, as the White House grapples with political fallout from the bankruptcy of the largest refiner in the northeast, according to people familiar with the discussions. The meetings, set to begin Friday, come amid intense and growing scrutiny of the Renewable Fuel Standard, a 13-year-old requirement that refiners mix biofuel -- generally ethanol -- into gasoline and diesel. The Friday session is planned with Environmental Protection Agency Administrator Scott Pruitt and Agriculture Secretary Sonny Perdue. A follow-up is scheduled for Tuesday morning with President Donald Trump and four key senators on the issue, said the people, who asked not to be named in discussing internal deliberations. The biofuel mandate is politically treacherous for Trump, because it divides to two important political constituencies: Iowa farmers growing corn for ethanol and Pennsylvania laborers who toil in that state’s four oil refineries.

    USC’s computer system trends are positive March corn, 0.05 overbought, positive Dec 18 corn, 0.07 overbought, negative March wheat, 0.32 oversold, positive March soybeans, 0.48 overbought, positive November 18 soybeans, 0.23 overbought.

     

    CATTLE:


  1. Trends are positive cattle, negative feeders.

  2. April: day 5 of a buy signal.

  3. June: in day 5 of a buy signal.

  4. March feeders: day 2 of a sell signal.

  5. COF report will be released this afternoon. COF 107.3%,Placements 100.3%, Marketings 106.0%, one extra marketing day.

  6. Expected increases in cattle marketed in January on the upcoming cattle on feed report is expected to help support overall demand expectations not only short term, but through the upcoming spring and summer months.

  7. Cash cattle trade at $128/cwt.

  8. Carcass weights were up 3 lbs

  9. USDA projects beef production to be up 5.9% from 2017, 27.7 bln lbs in 2018.

  10. Demand remains strong for cattle, beef production is up 4-5% and beef prices up 11.7% vs a year ago.

  11. Weights last week were up 1 lbs vs a week ago and up 10 lbs vs a year ago.

  12. Cutout is at the highest since July 7th. 

  13. In 2017, Japanese beef imports increased 14% year-on-year to 572,940 MT. The United States continued to regain market share from Australia, setting a new post-2003 high of 42%, up 4% from '16

  14. Total red meat supplies in freezers were up 9 percent from the previous month and up 1 percent from last year. Total pounds of beef in freezers were up 2 percent from the previous month but down 7 percent from last year.

  15. Beef packer margins are a negative $6.10/head.

  16. Feeder cattle index is $148.05.

  17. Boxed Beef: Choice up $1.03 to $218.40, Select up $0.14 to $212.06, C/S spread 6.34, 98 loads.

    USC’s computer trend system is positive April cattle, 0.15 oversold, positive June cattle, and 0.13 oversold, and negative March feeder cattle 0.44 oversold.

     

    HOGS:

  18. Trends are positive.

  19. April hogs in day 1 of a buy signal.

  20. June hogs in day 5 of a buy signal.

  21. Cash hogs are expected to be steady.  Futures have increased over $3.00/cwt this week

  22. The discount to April futures is still supporting the market. 

  23. Lean hog index is $70.78, down 63 cents and down from $74.01/cwt a week ago

  24. USDA projects pork production to be 26.9 bln lbs in 2018, up 5.1% vs 2017.

  25. Bellies were higher again yesterday, up to $131.21 vs $126.41 last week.

  26. Japan’s pork imports reached 932,060 MT in 2017, up 8% from the previous yr. The EU increased its mrkt share to 36% to remain Japan’s leading pork supplier. The United States remained in second place as its share dipped slightly to 29%.

  27. Cold Storage out yesterday afternoon reported pork stocks of 568 million tons vs. the estimate of 539.547. Last month, pork stocks were 490.782. Beef stocks were reported at 500, just above the 491.669 estimate and last month's 489.543.

  28. Frozen pork supplies were up 16 percent from the previous month and up 8 percent from last year. Stocks of pork bellies were up 13 percent from last month and up 219 percent from last year.

  29. Carcass Cutout Values: $78.70/cwt, down $0.03/cwt.

  30. Daily direct hogs weighted average prices: ECB N/A, WCB $63.58, IA/MN $63.71, National $63.55.

  31. Pork Packer Margins a positive $25.56/head vs positive $25.13/head prior. Estimated margin at vertically integrated operations: positive $37.77/head vs positive $37.64/head prior.

    USC’s computer trend system is negative April hogs 0.82 overbought, positive June hogs, 1.09 overbought.

     

                                       

    ENERGIES:  Oil is trading down $0.05/barrel, $62.70.  Natural gas is $2.56, gold is $1333/oz, and silver is $16.58/oz, platinum $997/oz, copper $3.21/lb. Oil headed for a second weekly increase as a surprise pullback in U.S. crude inventories compounded signs that a global glut is easing. While the U.S. is pumping near record volumes, exports also jumped to a four-month high last week, helping drain the nation’s stockpiles. Oil stocks in the biggest U.S. storage hub plunged to the lowest level in more than three years. While crude struggled after the best January performance in more than a decade, it’s now finding its footing again as the Organization of Petroleum Exporting Countries and its allies including Russia pledge to persist with output curbs to re-balance the market, and demand remains robust. U.S. crude exports rose to about 2 million barrels a day last week, according to Energy Information Administration data Thursday. Nationwide inventories declined the most in five weeks to 420.5 million barrels, in contrast to a 2.9 million gain forecast. Stockpiles at the storage hub of Cushing, Oklahoma, shrank for a ninth straight week to 30 million barrels. The country’s crude production ticked lower for the first time since early January to 10.3 million barrels a day, the EIA report also showed. Baker Hughes data due on Friday will show the number of rigs drilling for oil in America, which had risen to a two-year high last week.

     

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This material has been prepared by a sales or trading employee or agent of US Commodities Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by US Commodities Inc. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.


DISTRIBUTION IN SOME JURISDICTIONS MAY BE PROHIBITED OR RESTRICTED BY LAW.  PERSONS IN POSSESSION OF THIS COMMUNICATION INDIRECTLY SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH PROHIBITION OR RESTRICTIONS.  TO THE EXTENT THAT YOU HAVE RECEIVED THIS COMMUNICATION INDIRECTLY AND SOLICITATIONS ARE PROHIBITED IN YOUR JURISDICTION WITHOUT REGISTRATION, THE MARKET COMMENTARY IN THIS COMMUNICATION SHOULD NOT BE CONSIDERED A SOLICITATION.


The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that US Commodities Inc. believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.





Livestock Market
Date IA/MN Top WCB Cattle CME Index 0.00% Carcass
Cut out
Value
01/26/2018 68.93 68.81 - 73.77 71.18 82.78
01/29/2018 69.48 69.39 126.47 73.77 71.14 82.81
01/30/2018 69.27 69.27 126.00 73.83 71.32 82.56
01/31/2018 71.22 71.15 125.93 73.84 71.14 82.73
02/01/2018 72.42 72.38 125.94 73.85 71.09 81.82
02/02/2018 73.07 72.97 124.20 73.87 71.19 81.63
02/05/2018 72.44 72.48 125.50 74.10 71.62 80.12
02/06/2018 72.67 72.64 127.00 74.48 72.25 78.23
02/07/2018 71.72 71.59 - 74.84 72.74 77.34
02/08/2018 70.39 70.24 - 75.38 72.71 76.92
02/09/2018 70.10 69.95 - 75.63 72.43 74.44
02/12/2018 69.16 68.98 126.15 75.38 71.97 76.71
02/13/2018 68.15 68.07 129.11 74.72 71.67 77.50
02/14/2018 67.12 67.08 126.00 74.30 71.03 77.52
02/15/2018 65.54 65.51 128.00 74.01 70.56 76.99
02/16/2018 65.09 65.01 129.00 73.49 69.82 77.34
 




Percent of Total Hogs Priced at:
 2015       2016      
 FebApr JunJulAugOctDec FebApr JunJulAugOctDec
Market Tops       Market Tops       
100-104.993.95%7.84%5.78%6.67%0.95%  100-104.99       
95-99.9911.38% 4.36%6.67%   95-99.99       
90-94.9915.17%13.77%13.09%20.00%5.45%  90-94.99  1.50%15.66%8.39%  
85-89.9912.90%4.66%13.99%6.67%9.24%5.12% 85-89.99  18.32%31.31%19.95%  
80-84.9927.62%24.36%36.59%46.67%21.56%2.67% 80-84.99 5.11%25.23%15.66%19.50%  
75-79.9924.43%14.83%11.94% 7.82%1.56%3.69%75-79.9912.87%1.64%6.01%5.05%12.24%4.42% 
70-74.994.55%25.42%14.25%13.33%48.10%21.83%22.96%70-74.996.80%16.97%40.54%15.66%19.27%15.90%8.65%
65-69.99 5.30%  6.87%18.04%12.14%65-69.9911.21%10.22%8.41%12.63%13.38%11.68%5.61%
60-64.99 3.81%   35.19%28.50%60-64.9930.88%49.08% 4.04%7.26%21.79%14.57%
55-59.99     12.92%24.54%55-59.9937.13%11.86%   26.01%16.69%
50-54.99     2.67%8.18%50-54.991.10%5.11%   20.22%18.06%
        45-49.100      28.38%
        40-44.100      8.04%
Successful Marketing
This current marketing period includes in excess of 1 Million hogs. To date they
have been priced as illustrated above.
 




Risk Management ---- Average Pricing History
The following is a pricing history of Agri Control Co. (Donald M Fedie) for the sum total of all forward contracts, options, and futures hedges placed for all clients during the years displayed.
 Forward Contracts Floor Options Hedged Futures Sum Total
YearRangeAverageRangeAverageRangeAverageAveraged
200252.00 / 54.6552.7928.00 / 53.0042.7136.52 / 52.0545.51$47.00
200348.87 / 69.8057.0132.00 / 72.0054.6656.12 / 64.0059.57$57.08
200449.92 / 77.7562.2244.00 / 74.0061.6855.35 / 77.0563.73$62.54
200553.85 / 81.0065.6748.00 / 72.0061.2253.70 / 80.5567.74$64.88
200650.30 / 73.2563.0254.00 / 54.0054.0054.70 / 72.0063.72$60.25
200754.00 / 78.4565.69NoneN/A55.70 / 66.9059.32$62.51
200858.00 / 79.4070.8160.00 / 72.0062.2555.70 / 79.0570.49$67.85
200956.25 / 100.0080.5148.00 / 80.0062.8664.20 / 96.1068.95$70.78
201052.25 / 85.5568.5448.00 / 92.0069.6355.85 / 82.0067.93$68.70
201169.50 / 101.8083.4560. / 10081.7872.00 / 100.48 78.97$81.40
201283.85 / 100.8590.8068 / 10882.8998.75 / 99.5592.32$88.67
201380.37 / 100.1589.8470 / 11685.8177.98 /100.1587.75$87.80
201476.40 / 118.6288.7270 / 13699.7380.45 /131.9590.96$93.14
201561.20 / 85.8581.0854 / 10479.1661.20 / 9059.88$73.37
201670.80 / 79.5076.4140 / 9067.4944.80 / 79.9557.32$67.07
 




 
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