Best week for corn since July

Good Morning from Allendale, Inc. with the early morning commentary for January 15, 2021.

Grain Markets may end the week on a quieter note. March corn through Thursday had gained 38 cents. This will be the best weekly gain for corn since July. Traders are also noting a three day holiday ahead may inhibit big moves today. US grain demand indicators are still generally strong.

Markets will be closed on Monday for Martin Luther King Jr. Day. Grain and livestock markets close at regular hours today. There will be no electronic session Sunday night for grains. There will be no day session for grains or livestock. The next trade starts Monday night with the normal 7 pm Central open.

NOPA’s December soybean processing numbers will be out later this morning. The trade expectation is to see 185.175 million bushels. That would be a new record and 5.2% over last year. September through December crush would therefore run 6.8% over last year. USDA’s whole year goal is for a 1.6% increase.

Corn export sales on Thursday continued what has been a great string of sales. This one was 47% over the five year average. The past four weeks have averaged 26% over. We only need sales -43%.

India is considering raising its ethanol usage again. Last year the government set a target rate of 10% by 2022 and 20% by 2030. They now plan to hit that 20% goal by 2025. In 2019 the US exported 9.3% of our ethanol production, 34.9 million barrels. Of that, India was our #3 buyer at 4.140.

Soybean export sales on Thursday were 11% over the five year average. Interesting to note two of our past three weeks of sales have been above normal, an improvement. Have we now ended our multi-week period of quite-low sales? The past four weeks have averaged only 40% below normal. Sales can drop down to 49% under normal from here on out and we’ll meet USDA’s goal.

China’s December soybean imports ran 7.524 million tonnes. This was 21% under last year. The prior two months were +41% year/year and +16% respectively. For their completed first quarter, imports are 7.5% over last year at 25.804. for the October – September year USDA expects 100 million tonnes in imports, +1.5% year/year.

Russia is considering extending the coming wheat export tax into the new crop year, past July 1. Allendale warns this is a bigger deal than it appears. Russia’s wheat exports are front-loaded with heavy numbers July through November. We suggest this could sway 3 – 8 million tonnes of their 19 mt export during that time.

Wheat export sales on Thursday were 36% below the five year average. The past four weeks have run 4% under normal. To meet USDA’s 1/12 shipment goal we need sales through May at 12% over the five year average.

Wholesale beef was up 2.37 yesterday. That puts the week’s gain at 6.57. Choice beef is now priced equal with last year.

Blizzard conditions, with snows of 6 inches, are seen in Minnesota and Iowa through mid-day. Lower amounts will then be seen as it transitions into the Eastern Cornbelt through Friday. This may delay pork processing operations.

Hog price spreads continue to suggest better pricing in the second half of the year. How quickly feed costs reign in production, and demand picks up, is a question.

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