Markets Shift Amid Uncertain Trade Headlines
Mar 13, 2019
Good Morning from Allendale, Inc. with the early morning commentary for March 13, 2019.
Grain markets are mixed in overnight trade following what was an impressive wheat-lead rally yesterday. Uncertainties remain surrounding a US/China trade deal leaving some on the sidelines for the time being.
Join us this morning for the release of the results from our annual acreage survey! We'll share our findings at 10:00 AM CDT during a live webinar. Get registered here.
Wheat ratings across the US reported 51% of the crop Good to Excellent in Kansas, an increase from last week's 49%. In Texas, the crop was rated 28% GTE, a decrease from last weeks 36%, while the poor to very poor rating increased to 30%. Oklahoma wheat was rated 56% GTE and Arkansas was 25% GTE.
The EPA released a proposed rule to end the summertime ban of higher-ethanol blends of gas. A public hearing will be held later this month to vet the new proposal, and it is expected to be challenged by the oil industry.
Conab lowered its estimate of the Brazilian soybean crop from 115.343 million tonnes to 113.459. Its corn crop estimate was revised higher to 92.807, up from last month's 91.652.
NOPA Crush is set to be released this Friday at 11:00 AM CDT. Early analyst estimates have 158.730 million bushels of soybeans crushed in February which would be the largest February crush ever.
FranceAgriMer cut its estimate of the French soft wheat ending stocks to 2.4 million tonnes, down from last months estimate of 3.0. They raised their non-EU exports to 9.5 million tonnes, up from 8.885.
Managed money funds were thought to be buyers of 12,500 corn contracts, 6,500 soybeans, 10,500 wheat, 3,500 soymeal, and 4,500 soyoil.
U.S. Trade Representative Robert Lighthizer said on Tuesday he hopes the United States and China are in the final weeks of talks to secure a deal that will ease a trade war between the world's two largest economies, though he cautioned that issues remained. "If those issues are not resolved in favor of the United States, we won't have a deal." (Reuters)
Economic reports out this morning include PPI, Core PPI, and Durable Orders at 7:30 AM CDT, Construction Spending at 9:00, and Crude Oil Inventories at 9:30.
Rich Nelson suggests that a realistic scenario is that US pork exports to China could increase from last year's 335.490 million to something in the range of 728 million - 1.513 billion due to the Swine Fever issue. This gives us an increase in total exports from 7% to 30%.
Cash cattle trade yesterday at $127 was a wake up call to the long established bull market. Warming temperatures, not just seasonally but also back to "normal" levels, is a bearish issue for the trade. Additionally, rising supply in April can't be ignored.
Dressed Beef Values were higher with choice up 0.86 and select up 0.72. The CME feeder index is 139.02. Pork cut-out values were down 1.20.