Good Morning from Allendale, Inc. with the early morning commentary for May 7, 2019.
Grain market traders continue to grapple with record soybean stocks, rising corn stocks, an excellent wheat crop, and strong export competition among major world suppliers in all three products. More rain is expected around the Midwest this week, which could further hamper corn planting and raise the chances of some land being switched to later-planted soybeans.
Chinese trade delegation is preparing to head to U.S. for trade talks, after President Trump said he would raise tariffs on $200 billion worth of Chinese goods this week and target hundreds of billions more soon if an agreement is not done, said Ministry spokesman Geng Shuang. He did not say if Vice Premier Liu He, who is China's lead official in trade negotiations, would be part of the delegation.
Crop progress report was released with corn planting at 23% complete (15% last week, 36% last year and 5-year average of 46%). Soybean planting at 6% (3% last week, 14% last year and 5-year average of 14%). Hard red Spring wheat planting at 22% complete (13% last week, 27% last year and 49% average). Hard red Winter wheat at 64% GTE (64% last week, 34% last year and 45% average).
Abiove raised its estimate for Brazil’s soybean crop to 117.6 million tonnes (116.9 million tonnes last month), as late maturing fields show better productivity. Abiove cut its estimate for Brazilian soybean exports to 68.1 million tonnes (70.1 million tonnes last month), saying the African swine fever outbreak in China will reduce demand from its largest buyer.
Saudi Arabia's SAGO said it bought 840,000 tonnes of barley in its latest international tender. The offered origins were the European Union, Australia, North and South America (excluding Canada) and the Black Sea region, SAGO said. The seller has the option to select the origin.
China's Dalian Commodities Exchange aims to open one of its soybean futures contracts to foreign investors this year, along with futures for soymeal, soyoil and palm oil, said a senior official from the exchange. The exchange will need regulatory approval prior to opening up additional contracts to foreign investors.
Tyson Foods Inc. said the U.S. meat processing industry could reap significant financial gains from a global shortfall in pork as African swine fever spreads rapidly across Asia. With African swine fever in China, about 5% of the global protein supply has disappeared as demand is rising, Tyson Chief Executive Noel White said. "African swine fever has the potential to impact the global protein industry on a level that we have never experienced," White said.
USDA counted last week's average cash cattle price at $122.95 ($123). This was $3 lower from the previous week.
South Africa confirmed it had detected two more outbreaks of African swine fever at the end of April, its agriculture ministry said. "The affected areas have been placed under quarantine and the provincial veterinary services are applying the necessary disease control measures," the ministry said.
Dressed beef values were mixed with choice down 0.36 and select up 0.69. The CME feeder index is 137.41. Pork cut-out values were down 0.88.