Good Morning from Allendale, Inc. with the early morning commentary for November 18, 2019.
Grain markets remain focused on whether or not a U.S.-China “phase one” trade deal can be agreed upon soon. Weather maps remain clear with milder temperatures which should help farmers get closer to completing this year’s harvest. Traders will continue to focus on any trade agreements, increase in export sales and harvest progress throughout this week.
Last week, December corn futures were down 6 cents, January soybeans down 12.75 cents, December wheat down 7.5 cents, December soymeal was up $2.10 and December soyoil was down 107 points.
USDA weekly crop progress report will be released today at 3 p.m. CST. Trade is looking for corn harvest rating at 78% complete (66% complete last week, 90% last year, 92% 5-year average). Soybean harvest rating at 90% (85% last week, 91% last year, 95% 5-year average).
Weekly export sales showed corn sales of 581,600 tonnes (expecting 400,000 to 800,000 tonnes), soybeans at 1,256,000 tonnes (expected 800,000 to 1,400,000), wheat at 238,600 tonnes (expected 200,000 to 500,000), soymeal at 345,800 tonnes (expected 100,000 to 350,000), and soyoil at 30,700 tonnes (expected 5,000 to 25,000).
China and U.S. had “constructive discussions” about “each other’s core concerns” and agreed to remain in close contact following a Saturday morning phone call. The call came at the request of Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer, said the Xinhua News Agency. Larry Kudlow added “the mood music is pretty good, and that has not always been so in these things. Washington and Beijing are close to a deal “.
CFTC Commitments of Traders showed funds new net position short -110,921 corn contracts, long +31,050 soybean contracts, long +391 wheat contracts, long +73,714 live cattle contracts and long +13,248 lean hog contracts.
USDA said it will begin making a second round of trade aid payments for 2019 to U.S. farmers next week. The payments are the second part of a three-tranche $16 billion aid package announced in May to compensate farmers for the U.S.-China trade war. Farmers will now be eligible to receive 25% of the total payment expected, in addition to the 50% they already received in the first round of the 2019 package, the USDA said
NOPA soybean crush report (for October) was released on Friday morning. Soybean crush was pegged at 175.4 million bushels (166.8 mb estimated) and soybean oil stocks at 1.423 billion lbs. (1.400 bil. lbs. estimated). The topped the monthly record set in the same month a year ago by over 3 million bushels.
Weekly U.S. pork export sales totaled 19,872 tonnes for 2019 delivery. This week’s sales were 3% under last year. Year-to-date sales of 1,594,383 tonnes (35% over last year). China purchases were a little larger than the previous three weeks at 5,549 tonnes.
Weekly U.S. beef export sales totaled 25,298 tonnes for 2019 delivery. This figure is the biggest one week sale since April. This week’s export sales were 86% over last year. Year-to-date beef sales of 832,853 tonnes (3.7% under last year).
Dressed beef values were lower with choice down 0.26 and select down 1.51. The CME feeder index is 147.12. Pork cut-out values were up 1.09.