Good Morning from Allendale, Inc. with the early morning commentary for September 23, 2019.
Grain markets are mixed to slightly higher on heightened trade concerns with China with weather still looking favorable for the majority of the Midwest. Until we get updated numbers at the end of the month (i.e. USDA Quarterly Grain Stocks Report), traders will continue to focus on weather concerns and crop conditions.
President Trump said his administration was "making a lot of progress" with China, as deputy-level trade talks continued for a second day and the U.S. lifted tariffs on over 400 Chinese products. The 437 exempted products range from printed circuit boards for computer graphics processors to dog collars, laminated wood flooring and miniature Christmas lights.
U.S. - China trade deal appeared far from made after Chinese officials unexpectedly canceled visits to farms in Montana and Nebraska after trade negotiators finished two days of negotiations in Washington. "Both sides agreed to continue to maintain communication on the relevant issues," said the China’s Commerce Ministry.
USDA weekly crop progress report will be released today at 3 p.m. CST. Trade is looking for corn condition rating at 54% GTE (55% GTE last week, 73% 5-year average). Soybean condition rating at 53% GTE (54% GTE last week, 69% 5-year average).
CFTC Commitments of Traders showed funds new net position short -170,626 corn contracts, short -48,181 soybean contracts, short -12,577 wheat contracts, short -6,885 live cattle contracts and long +21,334 lean hog contracts.
Japanese foreign minister, Toshimitsu Motegi said trade talks with the U.S. will bring peace of mind to Japanese farmers and automakers. "We have been holding negotiations on the basis of trust. I don't have any worry at all about the things ahead," he said. Trump and Abe are expected to secure a deal on farm tariffs and digital trade when they meet this week in New York.
U.S. and India are moving swiftly to negotiate a limited trade deal that President Trump and Indian Prime Minister Narendra Modi could sign at the United Nations General Assembly in New York (at the end of September), people familiar with the talks said. The deal would lower some tariffs on U.S. produce and restore preferential treatment for some Indian exports to the U.S., sources said.
Cattle on Feed showed On Feed (as of September 1st) at 98.7% (99.3% expected, 100.2 last month. Placements at 91.0% (93.7% expected, 97.9% last month), and Marketings at 98.5% (98.3% expected, 106.9% last month).
Cold Storage is expected to show a 624 million lb. total pork stock level for the end of August. The five-year average is 593 million lbs. Beef stocks, at 471 million lbs., are over the five-year average of 454. This report will be released today at 2:00 PM CDT.
Dressed beef values were lower with choice down 1.20 and select down 0.44. The CME feeder index is 138.53. Pork cut-out values were up 0.13.