Debate Continues Over Planting Prospects

Published on: 21:36PM Jun 20, 2019

Good Morning from Allendale, Inc. with the early morning commentary for June 20, 2019.

Grain markets are mixed with traders skeptical over what the USDA will say next week in the Planted Acreage report. With another crop progress report coming Monday afternoon, as well as the G-20 summit next weekend, the next catalyst is hard to predict.

Weekly export sales will be released this morning at 7:30 AM CDT. Traders are looking for corn sales of 300,000 to 900,000 tonnes, soybeans 200,000 to 800,000, wheat 200,000 to 500,000, soymeal 100,000 to 400,000, and soyoil 5,000 to 25,000.

Weekly ethanol production slipped from last week’s big 1.096 million barrel per day numbers to now 1.081. This was still good at 1.6% over last year. However, given the likely 3% increase vs. last year in plant efficiency, it is likely this was a week of lower than last year corn used. To meet USDA’s whole-year goal, corn for ethanol in the June – August period needs to run 1.3% over last year.

U.S. Trade Representative Robert Lighthizer said Wednesday that he plans to speak with his Chinese counterpart by phone before the two countries resume trade talks. He stated that the U.S. is "ready to engage" with China, Lighthizer said, while noting that he wants to make sure that a perceived imbalance between the two countries is addressed. (The Hill)

Funds were thought to be mostly sellers in yesterday's trade of 26,000 corn, 10,500 soybeans, 7,000 wheat, and 5,500 soymeal. They were estimated buyers of 3,500 soyoil.

The U.S. Federal Reserve voted to hold interest rates steady in yesterday's meeting. They noted, however, that rate cuts might be appropriate later this year depending on inflation data.

Initial and Continuing jobless claims will be released this morning at 7:30 AM CDT along with the Philadelphia Fed Index. EIA Natural Gas Inventories will be out at 9:30.

Allendale released estimates for tomorrow's Cattle on Feed report. We see May feeder and calf placements into feedlots at 6.8% under last year. We see May marketings at 0.2% under last year. At 2.052 million, that would be the second highest in eleven years for May. That helps bring June 1 Cattle on Feed to 1.0% over last year.

USDA's Cold Storage report will be released tomorrow as well (not Monday as we stated yesterday). We see end of May beef stocks at 404.135 million lbs. That would come from a 26.211 million decline from the previous month. We see end of May pork stocks at 610.516 million lbs. on an 11.347 million lb. decline during May.

The weekly Iowa/Southern Minnesota hog weight report showed the weekly liveweight for market hogs in that region fell from 6/8 to 6/15 from 285.2 lbs to 284.6. Normally weights should be in sharp declines on a seasonal basis, but what is concerning is this was a 2.2% year over year comparison. Last week was 2.3% overage.

Dressed beef values were higher with choice up 1.06 and select up .44. The CME feeder index is 133.05.  Pork cut-out values were down 3.46.