Grain Markets Rebound While Trade Troubles Escalate
Sep 20, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for September 20, 2018.
Grain market traders were happy to finally see all grain markets rally higher during yesterday’s trading session. Today, however, traders look for progress on trade agreements as industry groups, including the American Soybean Association, pressure the White House to finalize trade deals.
Weekly Export Sales Report will be issued at 7:30 a.m. CDT today. Trade estimates for corn is between 500,000 – 1,200,000, soybeans between 400,000 – 900,000, wheat between 250,000 – 500,000, soymeal between 50,000 – 350,000 and soyoil between 0 – 30,000.
Brazilian Farmers sped up soy and corn plantings this week for the country's next grain crop, under favorable weather conditions and a positive market outlook. Soybean planting in Brazil's second-largest producing state of Paraná reached 9 percent planted (8 percent last week and only 1 percent at this time last year) as ample soil moisture allowed for a quick start of fieldwork. (Reuters)
Statscan Survey estimated Canada’s wheat production grew 3.5 percent more in 2018 than in 2017. Barley production grew by 4.3 percent from last year, while oat production fell by 9.4 percent. Canola production was also forecasted lower by 1.5 percent from last year.
China is ready and willing to replace imports and promote localization due to the "extreme measures" of the US in the ongoing trade war according to State media.
NAFTA Talks continue as Canada said they would need to see movement from the US if the two sides are to reach a deal, which Washington insists must be finished by the end of the month. Canadian Prime Minister Justin Trudeau made clear he also wanted to see flexibility. Negotiators continue arguing over cultural protections, dispute resolution, and a U.S. demand for more access to Canada's protected dairy market.
Hurricane Florence is estimated to have killed 3.4 million poultry birds and 5,500 hogs in North Carolina, exceeding the number killed in the state's last major hurricane two years ago. North Carolina has 8.9 million swine, representing 12 percent of the U.S. herd. Last year, North Carolina farmers also raised 830.8 million chickens for meat, 9 percent of the U.S. flock, and 32.5 million turkeys, or 13 percent of the U.S. total, according to the USDA.
Cattle on Feed & Cold Storage Report will be released on Friday at 2 p.m. CST. Allendale estimates total cattle on feed for September 1stat 105.7 (5.7% over last year at 11.098 million head), placements at 106.7 (6.7% over last year at 2.057 million head) and marketings at 101.0 (1% over last year for a total of 1.999 million). Allendale projects a 556 million lb. total pork stock level for the end of August. The five-year average is 586 million lbs. This estimate represents an increase of 8 million lbs. from last month. The five-year average month to month change for August is a 14 million lb. increase. Allendale estimates beef stocks at 481 million lbs., over the five-year average of 440. This estimate represents a decrease of 4 million lbs. from last month. The five-year average for this month is a 2 million lb. increase.
December Live Cattle futures traded in a tight range on Wednesday closing at $117.97 (up 22 cents). Strong resistance still remains at the 119 level with key support at 116. Deferred contracts also finished slightly higher during Wednesday’s trading session.
December Lean Hog futures showed large volatility but closed quietly on Wednesday closing above resistance levels of 57.60. Traders are still waiting to hear how bad African Swine Fever is continuing to spread across Asia and Europe.
Dressed Beef Values were lower with choice down 1.04 and select down 1.29. The CME Feeder Index is at 153.08. Pork cutout value was up 0.82.