Anticipation Mounts for Busy Friday

Published on: 21:36PM Jun 27, 2019

Good Morning from Allendale, Inc. with the early morning commentary for June 27, 2019.

Grain markets are mixed as traders place their bets in front of a busy wrap-up to the week tomorrow. With two major USDA reports, first notice in the July contracts, the kick off to the G-20 meeting, and the end of the month as well as end of quarter, anticipation is high.

Weekly export sales will be released this morning at 7:30 AM CDT. Analysts expect to see corn sales of 250,000 to 750,000, soybeans 300,000 to 800,000, and wheat sales of 200,000 to 500,000.

First notice day for July contracts is tomorrow. Long positions still held after today's close are subject to delivery.

StatsCanada released the results of a planting intentions survey which found All Wheat acres expected to drop .6% to 24.6 million acres. Of that, durum wheat seedings will fall 20.9% vs. last year to 4.9 million.

Reuters complied average estimates for tomorrow’s USDA Quarterly Grain Stocks report. They see corn at 5.332 billion bushels, soybeans at 1.861, and wheat at 1.100.

Analyst estimates for corn plantings on the Planted Acreage report are 86.662 million acres of corn (89.800 million acres June WASDE, 92.792 million acres March forecast). Soybean plantings average estimate at 84.355 million acres (84.600 million acres June WASDE, 84.617 million acres March forecast).  All wheat plantings average estimate at 45.654 million acres (45.800 million acres June WASDE, 45.754 million acres March forecast).

Weekly ethanol production slipped from 1.081 million gallons per day to 1.072. On a year over year basis this past week’s production was unchanged with the previous year. Over the past two months cash ethanol in Iowa has advanced $0.21 per gallon. However, cash corn prices have advanced by $0.81 per bushel. Along with a slight decline in DDG prices, ethanol production margins have slipped.

Agritel estimates Russia wheat crop at 81.7 million tonnes, or 13% higher than last year. The estimate comes despite the hot, dry weather the country has seen this month, which the company suggests has not had a great impact on the crop.

Managed money funds were sellers of 3,000 corn contracts, 7,500 soybeans, 3,000 soymeal, and 3,500 soyoil. They were buyers of 5,000 wheat.

President Trump said on Wednesday that a trade deal with Chinese President Xi Jinping was possible this weekend but he is prepared to impose U.S. tariffs on virtually all remaining Chinese imports if the two countries continue to disagree (Reuters). The two leaders are expected to meet on Saturday at 11:30 AM local time in Osaka, Japan (Friday, 9:30 PM CDT).

Feeder futures closed up the limit on the August and slightly off the limit for both September and October yesterday. All feeder contracts will have expanded limits tomorrow of $6.75.

Quarterly Hogs and Pigs will be released today at 2:00 PM. Average analyst estimates have All Hogs at 103.0% of last year as of June 1. Kept for Breeding is estimated at 102.1%, and Kept for Marketing at 103.1%.

The Iowa/Southern Minnesota hog weight report indicated hog weights 2.1% over last year. Last Wednesday’s report was at 2.2% over. We’ve been monitoring these numbers closely to see when we are past the worst of the backed up marketing problem.

China's decision to block imports of Canadian meat has set off a global chain reaction in pork trading but it will do little to curb overall demand as a disease ravaging the Chinese hog herd elevates prices, industry experts say. China said on Tuesday it wants the Canadian government to temporarily stop allowing meat shipments to China after bogus pork export certificates were discovered. (Reuters)

Dressed beef values were mixed with choice up 0.06 and select down 0.39. The CME feeder index is 131.51.  Pork cut-out values were down 1.61.