Worries Over Retaliation Weigh on Soy Complex
Good Morning! From Allendale, Inc. with the early morning commentary for March 12, 2018.

Grain market traders took profits late last week after the President imposed tariffs on steel and aluminum. The concern is when there will be retaliation from China the #1 buyer of US soybeans. Weather in Argentina remains very important to their production however the story line is aging.

Thank you for helping us with the Allendale 29th Annual Planted Acreage Survey. The results will be released on March 14, 2018 via webinar (watch live ) and live feeds on twitter.

Argentina rainfall was light during the weekend. Rainfall ranged from 0.05 to 0.59 inch from Cordoba to Entre Rios and southward into parts of Buenos Aires and La Pampa. Amounts ranged up to 1.50 inches in southwestern Buenos Aires at Bahia Blanca and in a couple of other locations along the south-central and southeast coast of Buenos Aires (according to the Argentina National Weather Service).

CFTC Commitments of Traders report released on Friday showed managed money funds were net buyers of 104,414 contracts of corn last week. They were also net buyers of 36,331 contracts of soybeans and 28,101 contracts of wheat. They are now net long 163,534 corn, 183,711 soybeans and net short 32,531 wheat contracts.

AgRural says Brazil's 2017/18 soybean harvest is 48% completed vs 56% at this time last year and 46% of the 5-year average. Brazil's 2nd corn crop planting is 81% complete vs 88% last year and 81% of 5-year average. They think Brazil's 2017/18 1st corn crop harvest is 28% vs 36% last year and 37% of 5-year average.

(Reuters) - Chinese officials have said U.S. soybeans are a prime target for retaliation against tariffs imposed by the Trump administration on steel and aluminum imports, according to the American Soybean Association.

Funds were estimated net sellers of 10,500 contracts of corn, 19,000 soybeans and 7,000 wheat contracts on Friday. Trade is concerned about the possible retaliation from countries affected by President Trumps tariff on steel and aluminum.

March grain and soy contracts will go off the board this week.

Chinese pig prices hit their lowest in nearly four years this week, plunging farmers in the world's top pork market into the red and underscoring concerns that a rapid expansion of large pig farms in China has outpaced slowing demand growth. (Reuters)

Cash cattle trade last week was mostly 126 to 127.50 with a few head bringing 130 in the cornbelt. The firm cash trade was important to the short covering going into the weekly close. Today traders will be looking for follow through to the upside, especially with the firmness in product. Retailers are featuring beef at a time of year historically known for the weak demand.

April live cattle futures has resistance at 125.00 and support at 121.00. A close outside of this range would likely suggest further movement in the direction of the breakout.

Managed money funds were net sellers in live cattle of 7,221 contracts and net sellers in lean hogs of 4,824 contracts. These funds are net long on only 15,024 contracts in lean hogs and 92,556 in live cattle.

April Lean hog futures is consolidating between 66.42 and 69.50 (the bottom of a chart gap left in late February). Seasonally lean hog futures grind out a bottom in late March.

Dressed beef values were higher with choice up .26 and select up .48. The CME Feeder Index is 144.15. Pork cutout value is up .44.

If you have any questions on any of our content, give us a call at 800-262-7538 or service@allendale-inc.com