Good Morning from Allendale, Inc. with the early morning commentary for October 18, 2019.
Grain market traders await the latest in demand numbers with weekly export sales out this morning. Weather events around the globe are also being watched with wheat looking threatened in multiple countries. As always, trade headlines have the ability to move markets quickly.
If you missed our Fall Corn and Soybean Outlook Update this week, you missed a look at what might be coming our way in these markets. What should we expect for harvest this year, and what could that mean for pricing? What will be the next catalyst to move markets? The recording of yesterday's presentation is available here, now.
Weekly export sales will be released this morning at 7:30 AM CDT. Analysts expect to see corn sales of 400,000 to 800,000 tonnes, soybeans 900,000 to 1,600,000, wheat 250,000 to 550,000, soymeal 150,000 to 400,000, and soyoil 0 to 25,000.
Ethanol production for the week rose from 963,000 to now 971,000 barrels per day in the latest week. Compared with last year this most recent week is 4.0% lower. USDA’s current corn for ethanol goal 1 is 5.400 billion bushels for corn. That would be 0.4% over last year. Year to date production is running 5.2% under last year.
In response to yesterday's announcement that the USDA would resurvey North Dakota and Minnesota crop numbers, Lance Honig of USDA's NASS said, "Just to clarify, we will be re-asking about harvested acres for operators already scheduled to be contacted for yield expectations. So it’s not exactly a re-survey."
Lack of rain in Argentina's wheat region could lead to wheat yield losses of up to 40% according to the Buenos Aires Grains Exchange. Last week they cut their 2019/20 wheat estimate from 21 million tonnes to 19.8 million, but warned the situation could get worse if more rains don't fall.
Vietnam has asked Russia to suspend wheat exports. Vietnam imports from 3 to 5 million tonnes annually. For this year, USDA estimates they will bring in 3.7 million tonnes. Last year, they imported 3.1 million. Ukraine will likely fill the gap for now, but the US is likely to see some of the business as well.
China hopes to reach a phased agreement in a protracted trade dispute with the United States and cancel tariffs as soon as possible, the Commerce Ministry said on Thursday, adding that trade wars had no winners. (Reuters)
Tyson Foods announced they would stop using hogs fed with ractopamine. This is an effort to get involved in the pork trade with China.
Hog traders are eager to see today's weekly pork export sales numbers, though they are concerned that the bulk of new sales could be for 2020 delivery like last week's. We have 303,588 tonnes booked for 2019. However, only 95,454 tonnes is still left to ship. That equates to 210 million lbs.
Five lots of cattle were offered on the Fed Cattle Exchange yesterday. All saw bids of $111 but all were rejected. Last week's live based trades were at $108/$109 in the South and $110 in the North.
Actual Slaughter for the kill week of 10/5 showed steer weights grew by 1 lb. to an 899 lb. carcass. Heifer weights fell in this week by 4 lbs. to an 824 lb. carcass. Year over year, steer weights fell from -0.2% to now -0.4%. Heifer weights fell from -0.2% to now -1.3%.
Dressed beef values were mixed with choice down .17 and select up 1.23. The CME feeder index is 145.15. Pork cut-out values were down 1.44.