We look for Butter prices to open mixed.
Grain prices continued to break yesterday ahead of Monday’s USDA report with reports of export wheat being bought from countries other than the United States, better than expected early yield results from southern Illinois and a sharply higher dollar. Trade estimates for next Monday’s report are included below but given the lack of demand at current levels and a seemingly very low yield expectation vs. early harvest results we have the feeling that Monday’s report likely still has more room for a downside move.
Michael Cordonnier, the well-respected grain analyst with strong South American ties, projects Argentine farmers will plant as much as 3.8 million hectares of corn. This is well above other recent estimates. Cordonnier projected the increased acres because of the strong profitability offered with corn compared to soybeans.
The FAO’s world food price index fell to 231.1 points in August, down from 231.9 in July and the 238-point Feb record, but still 26 percent above last August.
Overnight prices were slightly higher which we somewhat expect to see hold up into tomorrow as the market has been softening this week but the break is likely to reverse course ahead of the report release. We look for corn to open slightly higher, soybeans to open 7 to 9 higher, meal to open 2.5 to 3.5 higher and for wheat to open 1 to 2 lower.
Daily CME spot market prices:
Block cheese: $1.79 (unchanged)
Barrel cheese: $1.7200 (down 1/2)
Butter: $1.9450 (down 5)
Grade A NFDM: $1.490 (unchanged)
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