Markets Want Trade Truce Confirmation
Dec 05, 2018
Good Morning from Allendale, Inc. with the early morning commentary for December 5, 2018.
Grain Markets are looking for confirmation that the trade truce between the US and China is legitimate before taking on too much more risk. The stock markets and most government agencies are closed today for the National Day of Mourning for President George H.W. Bush. As such, typical government reports (export sales, ethanol production, etc.) will be delayed by one day this week. Futures markets will trade their normal hours today, however.
Average Supply and Demand estimates were released by Reuters. Analysts expect US wheat ending stocks of .956 billion bushels, 1.738 bb of corn, and .945 bb soybeans. World numbers are expected to show 266.79 million tonnes of wheat, 307.59 mt corn, and 112.79 mt soybeans. The report will be released December 11th at 11:00 AM CST.
Celeres estimates Brazilian soybean farmers could produce 130 million tonnes 2018/19 crop cycle. Last month, USDA had their estimate at 120.5 million tonnes for Brazil. They also see an increase to the countries corn production.
Ukraine's agriculture ministry has said that grain exports which had been blocked by Russia have since resumed. "Passage of vessels with agricultural products through ports in the Azov Sea has been unlocked. The loading of grain to vessels through the ports of Mariupol and Berdyansk is restored and carried out in regular mode," the ministry said in a statement.
Soybean exports out of the US Gulf are currently cheaper than exports out of Brazil, Argentina, or the Pacific Northwest. At $343 per metric tonne, soybeans out of the Gulf are 8% cheaper than Brazil.
Managed money funds were estimated buyers of 8,000 corn contracts, 5,000 soybeans, 2,000 wheat, 1,500 soymeal, and 3,000 soyoil in yesterday's trade.
JBS is recalling 12.1 million pounds of beef products that may contain salmonella. Previous recalls of this size have had little impact on cattle trading.
Weekly comprehensive boxed beef showed a 53% jump in procurement last week for extended delivery beef. The jump was partially in the 61 - 90 day delivery numbers ( 38% yr/yr). The biggest jump was in the thinly traded 91 day delivery period. Packers were quite active in procurement for beef past March 1 needs. This could indicate packers are concerned about early summer and summer supplies after two months in a row of lower than last year placements.
African swine fever outbreaks are generally under control in China as prevention and control measures have been effective, a senior agricultural official said Tuesday. A total of 81 cases of the disease had been reported in 21 provincial regions as of Monday, vice minister of agriculture and rural affairs Yu Kangzhen said at a meeting with political advisors. (Reuters)
Dressed Beef Values were mixed with choice up 0.78 and select down 1.67. The CME Feeder Index is at 146.72. Pork cutout value was up .23.