Good Morning from Allendale, Inc. with the early morning commentary for September 13, 2019.
Grain markets shrugged off the news that even though harvest outlooks were reduced they still were above the average market forecast. Most traders believe the only accurate production estimates will come from the farmers when they harvest their crops. With so many farmers experiencing much later than usual planting dates, traders showed signs of doubt upon the usually reliable September USDA figures. Now traders will continue to focus on increases in demand and potential frost scares later this month.
September USDA Supply/Demand report showed corn yield at 168.2 bpa (166.7 bpa average estimate, 169.5 last month) with production at 13,799 million bushels (13.557 average estimate, 13,901 last month). Soybean yield came in at 47.9 bpa (47.2 bpa average estimate, 48.5 last month) with production at 3,633 million bushels (3.577 average estimate, 3,680 last month).
President Trump said he preferred a comprehensive trade deal with China but did not rule out the possibility of an interim pact, even as he said an “easy” agreement would not be possible. I’d rather get the whole deal done,” Trump said. “I see a lot of analyst are saying an interim deal, meaning a we’ll do pieces of it, the easy ones first. But there’s no easy or hard. There’s a deal or there’s no deal. But it’s something we would consider, I guess.”
Chinese importers bought at least 10 cargoes (600,000 tonnes) of U.S. soybeans being shipped from the Pacific Northwest export terminals during October to December, two traders with direct knowledge of the purchases said.
Weekly export sales showed corn export sales of 498,100 tonnes (expected 450,000 to 950,000 tonnes), soybean sales at 1,172,200 tonnes (expected 550,000 to 1,150,000 tonnes), wheat at 602,800 tonnes (expected 300,000 to 600,000 tonnes), soymeal at 119,000 tonnes (expected 125,000 to 325,000), and soyoil at 10,900 tonnes (expected 5,000 to 35,000 tonnes).
President Trump said the administration has made progress on a biofuel reform package after he met with U.S. senators from key farm states as part of an ongoing effort to boost ethanol demand and help farmers who are struggling. “I think we had a great meeting on ethanol for the farmers,” Trump said. “Let’s see what happens.”
Private exporters reported to the USDA export sales of 113,036 metric tons of corn for delivery to Mexico during the 2019/20 marketing year. Exporters are required to report to the USDA any export sales activity of 100,000 tons or more of one commodity made in a day or quantities totaling 200,000 tons or more in any reporting period.
Total pork export sales for last week showed sales of 21,886 metric tonnes (17% over last year). More importantly, China was responsible for purchasing 10,878 tonnes last week. This was the single largest Chinese pork purchase since the last week in May 2019. Hogfutures closed up $3 limit and will have expanded limits to $4.50 during tomorrow’s trading session.
Cash cattle trades were light yesterday in the South at $99 ($1 lower than last week). This is a surprising improvement over early-week pricing between $2 to $3 lower. With nearby futures trading around $98.72, this is pricing in the idea cash prices may only fall to around $96 next month.
Dressed beef values were higher with choice up 0.08 and select up 0.20. The CME feeder index is 136.65. Pork cut-out values were down 1.98.