Good Morning from Allendale, Inc. with the early morning commentary for September 10, 2019.
Grain Markets are higher overnight on another session of low volume and little fund activity. Weather still remains non-threatening in most areas with moderate temps. Traders are cautiously putting positions on and off as the USDA supply/demand report quickly approaches this Thursday morning.
USDA weekly crop progress showed a surprising corn condition rating at 55% GTE (58% GTE expected, 58% GTE last week, 72% 5-year average). Soybean condition rating remained at 55% GTE (55% GTE expected, 55% GTE last week, 68% 5-year average). Spring wheat harvest was 71% complete (69% expected, 55% last week, 86% last year).
U.S. Treasury Secretary, Steven Mnuchin said he did not see the threat of a recession as the Trump administration seeks to revive trade negotiations with China and he expects a positive year ahead for the U.S. economy. “We have a document, we’ve made a lot of progress, they’re coming here, I take that as a sign of good faith that they want to continue to negotiate. And we’re prepared to negotiate. If we get a good deal, a deal that’s good for us, we’ll sign it. If not the president is perfectly fine with continuing the tariffs”, he said.
September USDA Supply/Demand report will be released this Thursday at 11 a.m. CDT. Trade is looking for corn production of 13.672 billion bu. (13.901 billion bu. last month) and soybean production at 3.577 billion bu. (3.680 billion bu. last month). Old crop stocks calling for corn production to be 41 million bu. higher and soybean production to be 16 million bu. lower than last month. USDA will also update 2019 prevent plant acres on the September report estimated at 19.8 million acres (300,000 thousand acres more than last report).
U.S. Grains Council has stepped up efforts to increase demand for its ethanol exports across Asia (excluding China), its officials said. The U.S. exports 200 – 300 million gallons of ethanol a year to Asia (13,000 – 19,600 barrels per day). The target is 1.5 billion gallons within five years, but the figure would likely be closer to 1 billion without China, said Tim Tierney regional director strategic marketing for ethanol in north Asia at the council.
Saudi Arabia’s state grain buyer (SAGO) said it had bought 780,000 tonnes of wheat in a purchase tender, the first to permit offers from the Black Sea region. The wheat offered was from the EU, the Black Sea region, North America and South America, SAGO governor Ahmad A. Al Fares said.
Marco Troyjo, Brazil’s deputy economy minister for foreign trade said the Brazilian government had formally started free trade talks with Mexico this week. He said Brazil hopes to increase commerce with Mexico, highlighting the sale of farm products.
Australia cut its wheat production forecast for the 2019/20 season to 19.2 million tonnes (21.9 million tonnes in last report) due to prolonged dry weather across Australia’s east coast.
China granted export licenses to 25 Brazilian meatpacking plants, Brazil’s Agriculture Ministry said. They said the plants include 17 for beef exports, six for chicken, and one for pork and donkey meat “can already export immediately”.
Dressed beef values were lower with choice down 0.36 and select down 0.02. The CME feeder index is 137.77. Pork cut-out values were down 1.41.