Good Morning from Allendale, Inc. with the early morning commentary for December 11, 2019.
Grain markets are lower on demand concerns even after Canada, Mexico and the U.S. approved changes to a new USMCA deal struck last year to replace NAFTA. Some technical buying after the December WASDE report was released is being seen as limiting the downside.
Top officials from Canada, Mexico and the U.S. agreed to a fresh new deal (USMCA) to replace the long-standing NAFTA agreement. The new agreement aims to improve enforcement of worker rights and hold down prices for biologic drugs by eliminating a patent provision. "We have accomplished this together at a moment when, around the world, it is increasingly difficult to get trade deals done," Canadian Deputy Prime Minister Chrystia Freeland said.
USDA December Supply and Demand report showed corn ending stocks unchanged from the November report at 1.91 billion bushels. Soybean ending stocks were also unchanged from last report at 475 million bushels, and wheat ending stocks were cut to 974 million bushels (1.014 billion bushels last report).
Senator Chuck Grassley said he has been assured by the White House that 2020 biofuel blending mandates will be finalized in accordance with a September agreement between the administration and biofuel and corn producers. “I believe Kudlow understands why the market reacted negatively to the proposed rule,” Grassley said.
President Trump will be the one to make the final decision on tariffs and the U.S.-China trade deal, White House trade adviser Peter Navarro said. "Either way we're going to be in a great place ... The president loves them (the tariffs). If we get a great deal, we'll be in a good place as well. But it will be the president's decision. It will come soon," Navarro said.
Brazil President, Jair Bolsonaro issued a decree that will allow over 10,000 small farmers to gain title to the land they cultivate, satisfying a campaign promise to the farm sector who backed his election. Brazil’s Ag Minister Tereza Cristina said the decree will allow small farmers to obtain credit that they were denied for lack of a title and will generate more agricultural prosperity.
Egypt's GASC bought 355,000 tonnes of Russian, Romanian, Ukrainian and French wheat at its latest international purchasing tender, traders said. GASC bought 60,000 tonnes of Ukrainian wheat, 60,000 tonnes of Romanian wheat, 115,000 tonnes of Russian wheat and 120,000 tonnes of French wheat.
Brazil's 2019 beef exports reached an estimated new record of 1.828 million tonnes (up from previous record of 1.643 million tonnes last year), according to Abiec. Next year, volumes are projected to soar to 2.067 million tonnes (13% higher), they said.
The European Commission said in an agricultural outlook report that annual pork exports from the E.U. could peak at over 4 million tonnes around 2022 (depending on the pace of recovery in China's pig herds) compared with 2.7 million tonnes last year. Pork exports were seen at easing to about 3.4 million tonnes by 2030, still well above volumes before the Chinese ASF outbreak, the Commission said.
Dressed beef values were lower with choice down 2.15 and select down 1.14. The CME feeder index is 143.41. Pork cut-out values were up 1.14.