Long Term Forecast Suggests Good Planting Window
Apr 20, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for April 20, 2018.
Grain markets continue to juggle several factors, but they are little changed over the last week. Trade concerns, weather worries, and supply and demand estimates remain the focus. Wall Street analysts look for commodities in general to continue to see strength, presenting another potential catalyst for volatility.
NOAA long-term maps for May had mostly normal temperatures and precipitation for the majority of the Midwest. The longer-term June, July, and August timeframe also showed mostly normal temps and normal precip are also expected. Based on this forecast, trend yield is very possible.
China's starch industry association expects China's corn demand to rise to 225 million tonnes in 2018, an increase of 15 million tonnes according to a report they released yesterday.
Weekly export sales were reported yesterday for the week of the 6th through Thursday the 12th. Corn export sales totaled 1,203,874 metric tonnes combined (1,091,654 for the 2017/18 crop year), within the 700,000 – 1,400,000 tonne expectation. Soybean export sales came to 2,131,448 tonnes in the latest week, and included 1,040,730 tonnes of 2017/18 and 1,090,718 tonnes of new crop. Expectations ranged from 1,400,000 – 2,200,000 tonnes.
Wheat sales were reported at 173,533 tonnes (-66,857 for 2017/18 and 240,410 for 2018/19), within the 100,000 – 500,000 trade expectation. Still, sales only come to 92% of USDA’s whole year goal, under the 102% five year average pace by this week. With the wheat marketing year ending May 31st, it is likely their current export estimate from the last Supply and Demand report will not be met.
World Weather, Inc. does not see a return to El Nino in 2018. "Neutral ENSO conditions should prevail during the balance of this year, despite some warming subsurface ocean water that has been observed in recent weeks across the eastern equatorial Pacific Ocean. El Nino is far more likely in 2019 or 2020 than in 2018."
USDA's Ag Attache to Ukraine estimates the countries 2018/19 corn production at 28.6 million tonnes, slightly above last year. It was also estimated that Ukraine will remain an active grain exporter out of the Black Sea ports.
May options go off the board today.
Managed money funds were mostly sellers in yesterday's trade selling 4,500 corn contracts, 5,500 soybeans, 3,500 soymeal, and 500 soyoil. They were buyers of 2,000 wheat.
The U.S. Treasury is considering ways to restrict sensitive Chinese investments in the United States by invoking an emergency powers law and bringing forward some security review reforms for corporate acquisitions, a senior Treasury official said Thursday. The efforts are part of the Trump administration's "Section 301" intellectual property remedies, which include China-specific investment restrictions. (Reuters)
Allendale released updated price outlooks for the next 12 months of lean hog pricing yesterday. We see 2018 production at 26.581 billion lbs., 3.9% over last year. If you're interested in more details on the projections, give us a call.
Pork export sales were reported 50% under this same week last year at 17,921 metric tonnes, continuing the recent weak trend.
Active cash cattle traded at $122 in Texas yesterday. Last week's average price was $119.49. Bids on a dressed basis are up to $192 in Eastern Nebraska. Last week's average was $187.74
April Cattle on Feed report will be released today at 2:00 pm CDT. Trade estimates are on Feed 107.5%, Placed 90.3% and Marketed 95.9%.
Dressed beef values were lower with choice down .30 and select down .09. The CME Feeder Index is 137.12. Pork cutout value is down .04.
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