Good Morning from Allendale, Inc. with the early morning commentary for April 22, 2020.
Grain Markets were volatile but ended the trading session mixed with corn and wheat futures pushing lower on weak ethanol outlook, favorable weather forecasts and lower energy prices. Soybean futures finished higher on South American weather concerns.
U.S. Senate approved $484 billion in new relief for the U.S. economy and hospitals affected by the coronavirus pandemic, sending the measure to the House of Representatives for final passage later this week. In total, the four measures amount to about $3 trillion in aid since last month to confront the Coronavirus crisis.
China is considering issuing more tariff waivers to boost U.S. corn imports after the shutdown of American ethanol plants sent prices to the lowest in more than a decade, according to people familiar with the matter. More waivers would come on top of the 2 million metric tons already granted earlier this year.
President Trump said he has asked his cabinet to devise a plan to inject cash into the ailing U.S. oil-drilling industry to help it survive a historic collapse in crude prices. “We will never let the great U.S. Oil & Gas Industry down. I have instructed the Secretary of Energy and Secretary of the Treasury to formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future!” Trump tweeted.
Argentina dryness has helped farmers speed collection of this season’s soybean crop, before heavy rains are expected next week which will likely create harvesting delays for the world’s top exporter of soymeal livestock feed. Farmers are expected to harvest 50.5 million tons of soybeans (51.5 million tons last report). Rosario’s corn crop estimate dropped to 49.8 million tons (50 million tons last report).
Tyson Foods resumed limited operations at its pork processing plant in Columbus Junction, where more than 200 workers have become infected and at least two have died. The plant, which has about 1,400 employees, had been shut down for two weeks after reporting the outbreak.
The Canadian government is not expecting shortages of beef despite some challenges from the coronavirus for the meat packing industry, but prices may go up, Prime Minister Justin Trudeau said. “We have heard from Canadian beef producers and associations that the priority will be ensuring Canadian supply before they move to exporting”, he added.
USDA Cattle on Feed report will release this Friday at 2 p.m. CDT. Average analysts forecast On feed at – 5.1% under last year, Placements at -21.1% under last year, and Marketings are seen +12% over last year.
China’s pork supply will most likely be under pressure in the second quarter and prices may peak around September due to the impact of the African swine fever, a Chinese agriculture ministry official said. China’s pork output over the 1st quarter of 2020 fell by a sharp 29% year over year. This is the sixth straight quarter of declines and underlining the extent of the impact from the ASF disease along with the huge task the sector faces in trying to rebuild their herds.
Dressed beef values were higher with choice up 11.47 and select up 10.83. The Feeder cattle index is 119.63. Pork cut-out values were up 3.27.