Good Morning from Allendale, Inc. with the early morning commentary for January 24, 2020.
Grain markets look to this morning's export sales report in hopes of finding signs of a demand revival in U.S. grains and oilseeds. This comes as a deadly virus spreads across the globe giving pause to the enthusiasm.
Weekly export sales will be released this morning at 7:30 AM CST. Traders expect to see corn sales of 700,000 to 1,200,000 million tonnes, soybeans 700,000 to 1,300,000, wheat 300,000 to 800,000, soymeal 200,000 to 450,000, and soyoil 5,000 to 26,000.
Next week, we'll release our latest price outlooks, trade strategies, and fundamental outlooks for grains and livestock! The outlooks will be complete with a year ahead weather outlook for the world's major growing areas with Drew Lerner of World Weather, Inc. All events are in a webinar format - right on your computer or phone! Drew will kick it off 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 today!
The World Health Organization declined to rule the coronavirus an international public health crisis yet, despite its continued spread. They did, however, agree on the urgency of the situation and suggested that the Committee monitoring it meet again soon.
Ethanol production is still generally doing well. This week's number was +1.7% over last year in this same week. This was good to see, but the previous four weeks ran +3.9% to +6.2% year/year Our year to date pace is currently 1.2% under last year. USDA’s current 5.375 billion bushel corn used for ethanol goal is about unchanged from last year’s 5.376.
USDA's Attache to Argentina estimates the countries 2019/20 corn production at 48 million tonnes, a bit below USDA's official estimate of 50 million tonnes.
The International Grains Council raised its forecast for 2019/20 global corn production by 8 million tonnes to now 1.111 billion tonnes. 2019/20 world wheat production was lowered by 1 million tonnes to 761 million tonnes.
U.S. President Donald Trump will sign a trade pact between the United States, Mexico and Canada next Wednesday during a ceremony at the White House, according to an administration official. (Reuters)
Cattle on Feed report (end of December) will be released today at 2 PM CST. Allendale estimates On Feed at 11.987 million head (2.5% over last year), Placements at 1.839 million head (4.1% over last year) and Marketing at 3.9% over last year.
Weekly Actual Slaughter showed week to week weight changes showed -8 lbs. for steers but +2 lbs. for heifers. Based on the year/year metric, steer weights increased from 2.2% over last year to now 2.4% over. Heifer weights also increased by this metric, from +0.8% to now +1.1%. The average market hog, barrows and gilts, saw a 1 lb. increase over the previous week on a dressed basis. The year/year comparison was bearish as it went from unchanged to now +0.5%.
The hog market is a little concerned by the guarantee of record pork production vs. the hope/expectation of new demand from the China trade deal. Mixed trading, until we see a clear China purchase, is very reasonable.
Dressed beef values were mixed with choice up 0.36 and select down .82. The CME Feeder Cattle Index is 144.86. Pork cut-out values were up .10.