Good Morning from Allendale, Inc. with the early morning commentary for July 31, 2019.
Grain markets are lower as they remain focused on weather and trade headlines with the next acreage data from the USDA still a week and a half away. Today is first notice day in August contacts and also the last trading day of the month which could impact fund positioning.
A Chinese delegation is set to visit Argentina in August to inspect soymeal crushing plants, Argentine government and industry officials told Reuters, a key step as the South American country looks to open up exports of processed soy to the world’s No. 1 consumer. (Reuters)
USDA's June soybean crush is expected to be reported at 159.4 million bushels of soybeans according to an analyst survey conducted by Reuters. The range of estimates was 158.6 mb to 161.0 mb. The report is due tomorrow at 2:00 PM CDT
Bayer warned investors that 2019 earnings may be harder to achieve as first thought from slower sales in ag supplies due to flooding and heavy rains in the midwestern United States and drought in large parts of Europe and in Canada. The trade wars were also cited.
Nutrien Ltd., a Canadian based fertilizer producer, estimates that 2020 corn acreage will rebound in the US to 95 million acres as corn prices will incentivize plantings.
Trade headlines circulating the market include, "Trump says he will seek U.S. trade accord with Brazil," "Chinese and U.S. trade negotiators discussed the purchase of U.S. agricultural goods during trade talks this week and will meet again in the United States in September," and "US-EU trade negotiations in stalemate, Malmström says." It appears trade-deals on all fronts still need time.
Managed money funds were thought to be sellers across the board yesterday selling 11,000 soybeans, 7,500 soybeans, 3,500 wheat, 3,500 soymeal, and 3,500 soyoil.
African Swine Fever has now been confirmed at a fourth hog farm in Bulgaria. It hit a 17,000 head breeding farm outside the village of Popina. In the previous three farms a full 87,000 head have been culled over the past 10 days.
The bulk of the decline in hogs this week are likely due to the misconception between African Swine Fever and swine flu. The Michigan finding of swine flu may have triggered outside market traders to temporarily forego their hope about this market's pricing in the weeks ahead.
The cattle market has been disappointed by the past three weeks of trade. Futures have rallied a little, the cash cattle trade is not that far off the current $109 low in July. Last week's 35% - 65% choice grading cattle moved at $111.89. Separately, the All Grades grouping averaged $113.68 last week
Dressed beef values were higher with choice up .77 and select up 1.37. The CME feeder index is 142.08. Pork cut-out values were up 3.05.