Will USDA Yield & Acreage Adjustments Be Enough?
Jun 11, 2019
Good Morning from Allendale, Inc. with the early morning commentary for June 11, 2019.
Grain markets are lower waiting for the USDA to issue the monthly supply and demand report this morning. The agency is expected to trim its estimates for corn and soybean yields from May’s report. As crop progress improves, traders will focus on weather patterns and field progress.
Weekly crop progress report showed corn planting at 83% complete (83% estimated, 67% last week, 100% last year and 100% 5-year average). Soybean planting at 60% (56% estimated, 39% last week, 93% last year and 84% 5-year average). Hard red Spring wheat at 81% GTE (82% estimated, 83% last week, 70% last year and 67% 5-year average. The first corn condition rating was 59% GTE (54% estimated, 77% GTE last year, 74% GTE 5-year average). Hard red Winter wheat harvest at 4% (7% estimated, 14% last year and 5% 5-year average).
USDA June supply/demand reports will be released today at 11 AM CDT. Analysts estimate average corn production at 14.251 billion bushels (15.030 USDA May report) and average yield at 172.4 bushels (176.0 USDA May report). Analysts estimate Soybean production at 4.123 billion bushels (4.150 USDA May report) and average soybean yield estimates at 49.0 bushels (49.5 USDA May report). Analysts estimate all wheat production at 1.883 billion bushels (1.897 USDA May report).
The USDA is looking into ways to allow farmers who have been unable to plant crops due to rains and waterlogged fields to qualify for farm aid payments, Agriculture Secretary Sonny Perdue said. "USDA is not legally authorized to make Market Facilitation Program payments to producers for acreage that is not planted. However, we are exploring legal flexibilities to provide a minimal per acre market facilitation payment," Perdue said.
President Trump said the U.S. had signed another portion of an immigration and security deal with Mexico that would need to be ratified by Mexican lawmakers. "We have fully signed and documented another very important part of the Immigration and Security deal with Mexico, one that the U.S. has been asking about getting for many years. It will be revealed in the not too distant future and will need a vote by Mexico's legislative body," Trump tweeted. "We do not anticipate a problem with the vote but, if for any reason the approval is not forthcoming, tariffs will be reinstated."
Mexican Foreign Minister Marcelo Ebrard said Brazil, Panama, and Guatemala may need to be brought in to help if a deal unveiled last week between U.S. and Mexico fails to reduce the numbers of U.S.-bound migrants crossing Mexico. U.S. border officers apprehended more than 132,000 people crossing from Mexico in May, the highest monthly level since 2006.
If U.S. - Mexico trade strife continues despite a deal struck last week, Argentine grain exporters are ready to step in to meet Mexican food demand, the head of an Argentine industry chamber said. "The moment that the U.S. sets up trade duties, we would be there," said Gustavo Idigoras, president of Argentina's CIARA-CEC chamber of grains exporting companies.
Live cattle and feeder cattle futures rallied over $2 in yesterday’s trading session due to the U.S. – Mexico trade deal and the potential for lower weekly supply numbers in the upcoming weeks. Last week’s cash cattle trade averaged $112.97.
Lean hog futures pushed sharply higher on the news of a Mexican trade deal. The U.S. relies heavily on Mexico pork exports as they equate to 22% of U.S. production annually. Mexico is the largest U.S. pork buyer at a 30% share per year.
Dressed beef values were mixed with choice down 0.65 and select up 1.87. The CME feeder index is 132.26. Pork cut-out values were up 0.98.