Good Morning from Allendale, Inc. with the early morning commentary for March 22, 2019.
Grain markets are mixed with corn and wheat higher as the focus remains on record flooding in the western corn belt, mainly in Iowa and Nebraska. Early estimates of lost crops and livestock are approaching $1 billion in Nebraska alone. Corn futures jumped to their highest level in 2 1/2 weeks as concerns about delayed planting in the western Midwest created buying and fund short-covering.
Weekly export sales were released for the week ending March 14, with export sales for corn and wheat in line with trade expectations. Soybean sales were well below expectations, with minimal reported sales to China.
NOAA released updated 3-month forecast maps yesterday. They showed extensive flooding remaining in Nebraska, Iowa and surrounding regions through May and will become more dire in the coming weeks as water flows continue downstream. "This is shaping up to be a potentially unprecedented flood season," Ed Clark, director of NOAA’s National Water Center in Alabama.
Funds positions (as of 03-20-2019) show them short 244,000 corn contracts, short 88,200 soybean contracts, short 71,100 wheat contracts, short 32,500 soymeal contracts and long 7,000 soyoil contracts.
Saudi Arabia’s grain organization (SAGO) issued an international tender to purchase 720,000 tonnes of animal feed barley, traders said.
Russia sent a trial shipment of 21.88 tonnes of wheat to Algeria, said Rosselkhozndzor (Russia’s agriculture watchdog). Rosselkhoznadzor said Algeria would hold a laboratory inspection of the wheat and would consider softening restrictions on Russian imports. Algeria is a key market for EU wheat, especially for France.
The Cattle on Feed and Cold Storage reports will be released this afternoon at 2 PM CDT. This report will cover the activity during the month of February. Average analyst estimates have On Feed at 99.7% of last year, Placements at 96.0%, and Marketings at 100.8%. Cold Storage is estimated at 593.960 million pounds for pork, and 493.822 for beef.
2019 U.S. pork imports to China are set to double from last year (to 2 million tonnes), a Rabobank analyst said as African swine fever has battered China’s pork production. Chinese pork production will fall by 20% in 2019, Oscar Tjakra, director of food and agribusiness research at Rabobank said. China typically accounts for half the world's output of the meat.
China's agriculture ministry said it is studying a temporary subsidy policy for breeding farms and large-scale farms designed at stabilizing hog production capacity in the wake of the African swine fever epidemic. The ministry said it will encourage and support the scaling up of small pig farms and help farms to improve infrastructure for disinfection and biosecurity.
Dressed Beef Values were mixed with choice up 0.64 and select down 0.26. The CME feeder index is 139.12. Pork cut-out values were up 2.20.