* Grain and oilseed prices benefited from a surge in buying of the broader commodity indices this morning after an ADP Employment report showed that the private sector created 200K jobs in September, up from 186K the previous month and beating expectations of 190K jobs. The number suggests modest growth in the economy and raises the odds of an interest rate hike. Money flow slowed again after the initial reaction, but it was positive for corn and soybean charts.
* However, the primary focus this morning was on USDA’s quarterly stocks report. The numbers came in as follows:
U.S. Quarterly Stocks
billions of bushels
USDA September 30
Average Trade Estimate
Highest Trade Estimate
Lowest Trade Estimate
USDA Previous Year
Water Street Solutions
* The above was psychologically positive for soybeans and wheat, although we’re still not running out of wheat. However, we also saw the hard red winter wheat crop come in at 827 million bushels, down 29 million from expectations, while soft red winter came in at 359 million, down 24 million from expectations. Hard red spring wheat production came in at 599 million bushels, down 26 million from trade expectations.
* Crude oil stocks
* Ethanol stocks
* Russia is taking steps to reduce its export tariff for wheat by roughly 25 cents per bushel, making it more competitive into markets like Egypt. However, it is raising its intervention price to support local prices by roughly 44 cents per bushel.
* Corn futures are seeing the short end of some spread activity after the report, particularly after failing to test $3.95 this morning, and are currently down a penny, but I like this market.
* Soybean futures are up 8 cents on the friendly stocks data and good chart signals with support from the outside markets as well.
* Wheat futures are up 8 cents on the friendly production and stocks data and building on recent chart signals.
* October live cattle are down $3 again this morning, although expanded limits are in place. The supply of heavy cattle amid large imports and soft demand are a problem. Product prices are down again this morning, while movement is quite good.
* Feeder cattle are $0.20 to $1.40 lower on weakness in the fats and positive corn chart action.
* Lean hog futures are 25 to 90 cents higher on follow-through buying with good pork demand. Cash hogs are steady to $1 higher as packers try to pull hogs in to take advantage of good margins. Product movement is good at midday with firm prices.
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