Ethanol Report to Signal Latest in Demand

Published on: 07:36AM Nov 14, 2019

Good Morning from Allendale, Inc. with the early morning commentary for November 14, 2019.

Grain markets remain focused on demand concerns and resolving the trade issues between the United States and China. Harvest weather forecast will always be watched as some areas have slowed significantly this week.

NOPA Crush is expected to show that processors crushed 166.795 million bushels of soybeans in October. USDA currently sees the year’s crush running +0.6% year/year. September was a big miss at -5.1%. This October estimate would be a slight improvement but still a bit low. The report will be released tomorrow at 11:00 AM.

Wheat margins on the Chicago and KC contracts were reduced by the Exchange at yesterday's close. The maintenance margin for both KC and Chicago wheat were dropped by $200 per contract to $1,250 (for front month contracts).

CONAB raised their estimate of Brazil's soybean crop to 120.86 million tonnes vs their October estimate of 120.4 million tonnes. USDA currently estimates the crop at 123.0 MT. Soybean exports were left unchanged at 72.0 MT.

Weekly export sales, normally out on Thursday mornings, are delayed until tomorrow due to Monday's Veterans Day holiday.

Ethanol Production will be out this morning at 9:30 AM.  Production will need to come in at 1067K in order to suggest that production is at last year's levels and we wouldn't need to see USDA lower ethanol again on the December crop report

Trade talks between the U.S. and China have hit a snag over farm purchases, creating another obstacle to locking down the limited trade deal President Trump outlined last month. Mr. Trump has said that China has agreed to buy up to $50 billion in U.S. soybeans, pork and other agricultural products annually. But China is leery of putting a numerical commitment in the text of an agreement. (Wall Street Journal)

Cattle saw some pressure yesterday from improving weather conditions in the Plains. Garden City, Kansas saw lows of +3 and 0 this week. Over the next seven days temps will rise into the 60's. In fact, next week that location will see 70 in two separate days.

Cash cattle traded actively in the South at $115. That was a disappointment to the bulls given last week's $114/$115 trade.

Weekly hog slaughter will likely push to a new all-time high. This week's run, with a huge 335,000 Saturday slaughter plugged in, could hit 2.746 million head. That would be a new all-time record.

Annual pork production in China has likely dropped by 20 million tonnes this year, from ADM's previous estimate of a 10-million-tonne decline, according to ADM's CFO. This sentiment fits in with the general pork market's viewpoints.

Dressed beef values were higher with choice up 1.84 and select up 1.30.  The CME feeder index is 147.44.  Pork cut-out values were down 1.51.

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