Good Morning from Allendale, Inc. with the early morning commentary for April 21, 2020.
Grain Markets are lower with corn and soybean futures pressured on light fund selling and fears of dismal ethanol demand as energy prices continued to decline. Wheat futures are supported by steady dryness affecting the Russian and European wheat crops which increased expectations for additional U.S. export sales.
U.S. Congress moved closer towards a $450 billion deal to help small businesses and hospitals hurt by the coronavirus pandemic, with House Speaker Nancy Pelosi saying negotiators had come to terms on the 'principles' of the package as the Senate set a session today for a potential vote. The two sides had sought to finish the package earlier but failed amid continued disagreements over a coronavirus testing strategy.
USDA Weekly Crop Progress Report showed corn planting at 7% complete (7% expected, 3% last week, 9% average). Soybean planting expected at 2% complete (2% expected, 1% last year, 1% average). Spring wheat planting at 7% complete (11% expected, 5% last week, 18% average).
USDA weekly grain export inspections showed corn exports at 684,000 tonnes (850,000 to 1,300,000 expected), soybean exports at 540,000 tonnes (300,000 to 700,000 expected) and wheat exports at 349,000 tonnes (350,000 to 600,000 expected).
South America weekly crop progress report showed Brazilian soybean harvest progress at 92% complete (91% 5-year average). Brazil 2nd corn crop output forecast was cut to 67.9 million tons (69.2 million tons last month, 69.3 million tons last year).
President Trump said his administration was considering the possibility of stopping incoming Saudi Arabian crude oil shipments as a measure to support the battered domestic drilling industry. "They have to do more by the market, it's the same thing over here. If the market is the way it is, people are going to slow it down or they're going to stop. That's going to be automatic, and that's happening," Trump said.
IKAR cut its forecast for Russia's 2020 wheat crop to 77.2 million tons (79.5 million tons last report). "Even if soil drought occurs in these areas, it will be compensated by other regions," said Arkady Zlochevsky, the head of Russia's Grain Union.
JBS said it would indefinitely shut a hog slaughterhouse that produces about 5% of U.S. pork, in the latest disruptions to the U.S. food supply chain from the coronavirus. JBS said it is closing a pork production facility in Worthington, Minnesota, that employs more than 2,000 workers and processes 20,000 hogs per day. It advised plant employees to follow a state order to stay at home to prevent the spread of the coronavirus, until the facility reopens.
The Coronavirus Agriculture support package is said to have allocated $5.1 billion of the $9.6 billion to cattle producers. Producers will receive a single payment determined using two calculations: Price losses that occurred January 1-April 15, 2020. Producers will be compensated for 85% of price loss during that period.
Dressed beef values were higher with choice up 9.39 and select up 10.79. The Feeder cattle index is 117.88. Pork cut-out values were up 6.55.