Good Morning from Allendale, Inc. with the early morning commentary for November 7, 2019.
Grain markets are mixed overnight as traders continue to watch for the latest clues in the ongoing US/China trade war while continuing to position for tomorrow's Supply and Demand report. As usual on Thursday mornings, export sales will be watched with interest.
Estimates for this morning's weekly export sales report have analysts looking for 300,000 to 650,000 tonnes of corn, 600,000 to 1,200,000 soybeans, 350,000 to 600,000 wheat, 150,000 to 300,000 soymeal, and 5,000 to 25,000 soyoil.
Analyst estimates for tomorrow’s USDA WASDE report show an average estimate for corn harvest at 81.3 million acres (81.8 million on last report), average corn yield at 167.2 bu./acre (168.4 bu./acre last report) with corn production at 13.604 (13.779 last report). Soybean harvest analyst average was 75.5 million acres (75.6 million acres last report), average soybean yield at 46.6 bu./acre (46.9 bu./acre last report) with soybean production at 3,513 (3,550 last report).
Trade groups including the U.S. Grains Council and American Coalition for Ethanol have been working with Mexican officials to promote the use of a 10 percent ethanol blend. They're hosting workshops and targeting Mexican gas station owners, petroleum equipment retailers and the nation's ag and energy officials. (Politico)
Headlines regarding a potential trade deal between the US and China continue to bounce back and forth with the latest being that the two countries may now not meet until December. Overnight Chinese headlines, however, have China pledging to eliminate tariffs in phases after "serious and constructive discussions."
The European Commission has raised its estimate on 2019/20 common wheat production for the EU to 147.0MMT, up 2MMT from last month. This is up significantly from last year, which was 128.5MMT due to the drought.
Brazil's Ag Ministry has implemented a 750,000 tonne per year tariff-free wheat import quota effective immediately. No end date for the quota was announced.
Russia's wheat crop estimate was lowered to 74 million metric tons, a decrease of 5 MMT according to USDA's attache to Russia. Poor weather including dryness in some regions, and too much rain in others were cited for the drop.
COFCO, the state-owned Chinese ag agent, announced it will buy $100 million of pork from Danish Crown, a European producer. The purchases are all expected to take place next year.
Global meat shippers have three years to make the most of the outbreak of a fatal pig disease in China before Chinese pork imports peak, according to a report released by the U.S. pork industry, which is competing for sales against Europe and South America. (Reuters)
Cattle traders are watching cash cattle for their next direction after December futures have rallied $22.12 in exactly 8 weeks without a serious setback.
Dressed beef values were higher with choice up 1.09 and select up 1.71. The CME feeder index is 146.26. Pork cut-out values were up 1.44.