US Chinese Trade Negotiations Continue
May 04, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for May 4, 2018.
Grain markets continue to trade the back and forth on US/Chinese trade war rumors and reports as negotiations progress in China. Estimates for next week's USDA Supply and Demand report should start to circulate later today.
Wheat yields in Kansas were estimated at 37.0 bushels per acre (bpa) by the Wheat Quality Council crop tour yesterday. This compares to the five-year crop tour average of 40.98 bpa and last year's 48.0 bpa. The tour's Kansas wheat production estimate is 243.3 million bushels. If realized, this would be the smallest Kansas wheat harvest since 1989.
Weekly export sales for the week ending April 26th had corn sales of 1,068,000 tonnes, inline with analyst expectations of 650,000 to 1,150,000. Soybean sales were reported at 886,000 tonnes, at the upper end of the 450,000 to 950,000 range. Wheat sales came in at 445,000 tonnes, also within analyst expectations of 0 to 600,000 (the wheat marketing year ends this month).
China is making efforts to increase its soybean output this year as a trade dispute between it and the United States continues. They plan to send officials into the country to supervise and ensure planting of the oilseed.
First drought, now heavy rains are plaguing soybeans in Argentina according to the Buenos Aires Grains Exchange. They report the crop is 61.8% harvested, but they excess rains are causing combines to get stuck. The exchange maintains their production estimate at 38 million tonnes.
FCStone cut it's yield estimate for second crop Brazilian corn by 4% to 60.5 million tonnes as dryness issues impact the crop.
China sold 6,225 tonnes of 2011 corn at a state reserve auction overnight. The sale represents 92.56% of the total offered and sold for an average price of $227.80 per tonne.
Managed money funds were estimated buyers of 11,000 corn contracts, 5,500 soybeans, 6,500 wheat, and 2,000 soyoil yesterday. They were estimated sellers of 2,000 soymeal.
The most likely outcome for tense U.S.-China trade talks launching on Thursday is an agreement to keep talking, with U.S. President Donald Trump maintaining his threat to press ahead with punitive tariffs on Chinese goods, trade experts say. A breakthrough deal to fundamentally change China's economic policies is viewed as highly unlikely, though a package of short-term Chinese measures could delay a U.S. tariff decision. (Reuters)
Economic Reports out today include Nonfarm Payrolls, Unemployment Rate, Average Hourly Earnings, and Average Workweek. All reports are due this morning at 7:30 AM CDT.
Weekly Actual Slaughter reported average cattle carcass weights fell 8 lbs. in the latest week to 802 lbs. Weights fell from 0.9% over last year to 0.2% over. The average steer carcass fell sharply, 11 lbs. in one week to 856 lbs. They went from 2.2% over last year to 0.8% over.
Pork export sales of 17,437 metric tonnes were reported yesterday for the week ended April 26. This was great to see as it was 27% over last year. The week before it was 15% over.
Dressed beef values were higher with choice up .26 and select up 1.29. The CME Feeder Index is 138.11. Pork cutout value is up 69.06.
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