Trade Headlines Back to Positive?

Published on: 05:29AM Nov 21, 2019

Good Morning from Allendale, Inc. with the early morning commentary for November 21, 2019.

Grain markets are mixed with corn up 1/4, Soybeans down 1 3/4, and wheat up 1/2. Lack of clarity on a U.S. & China trade deal continues to limit market gains, while a delayed crop has traders watching harvest forecasts a little bit later in the year than usual.

Export sales will be out this morning at 7:30 AM CST. Analysts expect to see corn sales of 400,000 to 900,000 tonnes, soybeans, 800,000 to 1,400,000, wheat 200,000 to 500,000, soymeal 100,000 to 450,000, and soyoil 5,000 to 25,000.

Weekly ethanol production posted a minor increase from the previous week’s 1.030 million barrels per day to now 1.033. This number is artificially supportive because last year posted a good drop in this specific week. That’s why the production number appears better than recent numbers at 0.9% under last year. Year to date ethanol production is still low at 4.4% under last year.

USDA's NASS reports, "Due to delays in harvest progress this season, USDA’s National Agricultural Statistics Service (NASS) will continue the weekly Crop Progress report beyond the last currently scheduled date of November 25, 2019. NASS will evaluate the harvest progress for all crops each week to determine how long to continue the report."

China will strive to reach an initial trade agreement with the United States as both sides keep communication channels open, the Chinese commerce ministry said on Thursday, in an attempt to allay fears talks might be unravelling. (Reuters) This comes after yesterday's headlines warned the deal might not get done this year.

Initial and Continuing Jobless Claims lead off the economic data out this morning at 7:30 AM CST along with the Philadelphia Fed Index. Existing Home Sales will be out at 9:00 AM, and EIA Natural Gas Inventories will be out at 9:30.

The Fed Cattle Exchange saw a few more trades than expected this week. Six of the eight lots offered managed to get sold. Three of those sold at $115, one at $115.75 and one at $116. Last week's average trade was $115.

Cattle on Feed and Cold storage reports will be released this Friday at 2 p.m. CST.  Typically, this report will show the largest placement month numbers of the year.  The average trade guess for On Feed as of October 1st is 101.2% of last year. Placements are estimated at 111.4%, and Marketings are estimated at 99.7%.

Cold Storage estimates have October beef stocks seen around 465.940 million lbs. (2 million lb. increase over September).  The five-year average is a 9 million increase from September. Pork stocks are estimated at 561 million lbs. The five-year average is 581 million lbs.

Since the mid-October highs, February hogs have fallen 12.90, April by 12.60, and June by 9.90. Yesterday six of the 2020 futures contracts settled limit down. Diminished hopes for a US/China trade deal have been the primary driver.

Dressed beef values were lower with choice down 0.80 and select down 0.70.  The CME feeder index is 146.27.  Pork cut-out values were up 1.91.