Good Morning from Allendale, Inc. with the early morning commentary for August 01, 2019.
Grain markets are mixed overnight as traders continue to weigh better crop production weather against the prospect of unplanted acreage. Resolution to ongoing trade issues remains elusive, and confirmation of US ag product purchases by China remains to be seen.
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 today at 2:00 PM CDT.
Weekly exports sales will be released at 7:30 AM CDT. Analysts expect to see corn sales of 300,000 to 850,000 tonnes, soybeans 100,000 to 700,000, wheat 300,000 to 600,000, soymeal 150,000 to 450,000, and soyoil 5,000 to 450,000 tonnes.
Ethanol production for the week showed a drop from 1.039 million barrels per day to 1.031. The past two weeks have seen a -3.3% and now -3.1% year/year decline. The previous eight weeks averaged a 1.3% over last year pace. Producer complaints about poor margins are now translating into lower production (year/year).
Datagro Consultoria estimates Brazil's 2019/20 soybean production at 125 million tonnes (116.76 million last year), and corn production at 104.28 million tonnes (100.02 last year). Both numbers would be records if realized.
Funds were sellers across the board for the second straight session yesterday, selling 22,500 corn, 9,000 soybeans, 5,000 wheat, 3,500 soymeal, and 6,000 soyoil.
A divided Federal Reserve announced it is cutting interest rates for the first time in more than a decade, as a slowdown in global growth and the fallout from the trade wars cloud an otherwise solid U.S. economy. The Fed cut rates by one-quarter of a percentage point. (Politico)
The Fed Cattle Exchange moved one lot in Kansas yesterday at $111. Last week's action was $111/$112 in that area. Light sales this week in the North were also done at prices roughly steady with last week.
China's Ag Ministry says a new African Swine Fever outbreak has been reported in its Hubei Province. No details have been reported yet on the size of the outbreak.
Hog futures posted limit down trading from the August through May 2020 contracts, continuing the theme of strong down days. The October futures are now 10.97 off their mini-peak posted on July 24. In summary, the market was misguided in its hopes for a Chinese government pork purchase announcement (We'll see what this morning's numbers bring).
The Iowa/Southern Minnesota regional hog weights update showed weights rose from 276.8 lbs. to now 277.2. On a year/year comparison the numbers were 0.2% over last year. The previous week's numbers were 0.1% over.
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.