Attention Turns to USDA Post Trump-Kim Summit
Jun 12, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for June 12, 2018.
Grain markets await the latest in Supply and Demand numbers from the USDA after the much anticipated summit between the US and North Korea.
President Donald Trump and North Korean leader Kim Jong Un on Tuesday signed a joint agreement, after meeting in person for only a few hours, in which Kim promises to work toward ridding the Korean Peninsula of nuclear weapons. Additional meetings will need to be scheduled to continue working, however. (Politico)
Average trade estimates for today's USDA Supply and Demand report have been released by Reuters. 2017/18 corn ending stocks are estimated at 2.166 billion bushels, soybeans .522, and wheat 1.079. 2018/19 corn ending stocks are estimated at 1.663 billion bushels, soybeans .417, and wheat .958. The report is due today at 11:00 AM.
US Corn was rated 77% good to excellent by USDA yesterday, just below the 78% estimate. Soybeans were rated 74% GTE, also below the trade estimate of 75%. Spring wheat was rated 70% GTE, while winter wheat was reported 14% harvested. Corn was 94% emerged. Soybeans were 83%.
Argentina will continue to reduce its soybean export tax despite their planned efforts to enact deficit cuts under its $50 billion funding deal with the IMF.
SovEcon and IKAR have each cut their estimate of Russia's 2018 grain harvest due to wet weather. SovEcon dropped its estimate from 126.2 million tonnes to 119.6, while IKAR went from 117 down to 114.7. Both analysts dropped their wheat estimates by more than two million tonnes.
The Chinese city of Tianjin will use gasoline with added ethanol in most vehicles by the end of September, according to a document published on the city government's website on Monday, as Beijing pushes for adoption of the biofuel nationwide. The central government said last year that it plans to roll out the use of gasoline blended with 10 percent added ethanol nationally by 2020, to cut corn stocks and clean up choking smog. (Reuters)
Managed money funds were estimate sellers of 34,000 corn contracts, 15,000 soybeans, 4,500 wheat, and 5,500 soymeal in yesterday's trade. They were estimated buyers of 1,500 soyoil.
U.S. President Trump took to Twitter to vent frustration with NATO allies, Canada's Prime Minister, and the EU yesterday following his participation in the G7 meeting. Trade issues between the US and much of the world continue.
Cattle showlist numbers were 29,100 head higher as reported yesterday. The traditional peak in slaughter is mid-June and the traditional beef production peak is July.
Weekly Comprehensive Boxed Beef showed that end users continue to show interest in securing product for later delivery. Purchases of beef for delivery over 22 days were 44% over last year in the same period. That marks six weeks in a row of good numbers.
Packers are scrambling to find hogs and the situation in not likely to get better this month, and may even get worse. The scramble for cash hogs is shown by last week's 7.67 jump in the Iowa/Minnesota and the 3.15 for wholesale pork. Prices were up another 94 cents and 97 cents respectively yesterday.
Dressed beef values were lower with choice down 1.08 and select down .38. The CME Feeder Index is 140.61. Pork cutout value is up .97.