Good Morning from Allendale, Inc. with the early morning commentary for January 15, 2020.
Grain markets remain left wondering what exactly is in the U.S. & Chinese trade deal and just what it will mean for U.S. agriculture. Markets are mixed on quiet volume with the signing and documents expected today, traders hope for some clarity going forward.
Our Annual Winter Outlook Conference takes place later this month, January 28th - 30th. Drew Lerner of World Weather, Inc. will kick it off for us January 28th with his 2020 weather outlook. He'll be followed by our grain and oilseed outlooks on the 29th, and our livestock outlooks on the 30th. Get registered to view our latest price outlooks, trade strategies, and more insight to what 2020 will bring to our markets.
Monthly NOPA crush report will be released today at 11 A.M. CST. NOPA members likely crushed 171.644 million bushels of soybeans last month, according to the average analyst estimates. December crush forecasts ranged from 168.215 million to 174.034 million bushels, with a median estimate of 171.500 million bushels.
U.S. Treasury Secretary, Steven Mnuchin, stated that the documents related to the trade deal signing should be released later today. Looking forward, he said that a Phase 2 trade deal could lead to more Chinese purchases of U.S. goods. The market would like to see Phase 1 purchases first, however.
Russia's agriculture ministry is looking to set a non-tariff quota for grain exports of 20 million tonnes in January-June, it said in a statement on Tuesday, adding the quota would be scrapped later in the most active part of season for trading. (Reuters)
Wholesale beef is likely reacting to the expected decline in beef supplies ahead. Last week's boxed beef gain was 1.55 for choice and 1.16 for select. So far this week, another 2.72 was added to choice and 3.75 to select.
From January - November USDA reports 2019 US pork and pork products to China at 472,811 metric tonnes. That value of that was $1.042 billion. After some strong December numbers these totals will of course be even larger. For 2020 JC Intelligence sees numbers at 1,000,000 metric tonnes with a value of $2.073 billion. Allendale is currently writing in a 1,190,000 metric tonne export with a value of $2.892 billion.
Packer margins are a little tight and end users are not that aggressive with procurement right now. The weekly Comprehensive Boxed Beef report showed end users last week ran procurement for extended delivery at 9% lower than last year in the same week
Dressed beef values were higher with choice up 2.21 and select up 2.07. The CME Feeder Cattle Index is 146.51. Pork cut-out values were up .05.