Good Morning from Allendale, Inc. with the early morning commentary for February 27, 2020.
Grain markets remain fixated on the spread of coronavirus around the globe. The prospect for a major slowdown in world trade has markets unwilling to bet on higher demand offsetting the global grain supply glut.
Weekly export sales are due to be released this morning at 7:30 AM CST. Analysts are looking for corn sales of 800,000 to 1,300,000 tonnes, soybeans 600,000 to 900,000, wheat 425,000 to 700,000, soymeal 150,000 to 350,000, and soyoil 8,000 to 45,000.
Argentina’s Ag Ministry suspended the registration of ag exports until further notice, likely due to the coming increase of export tariffs. Some traders believe this could help shift some export sales to the U.S.
Ukraine’s grain exports are estimated to be as much as 23% higher to date in this marketing year according to the Ministry for Development of Economy, Trade and Agriculture. In total, 40.1 million tonnes have been exported so far in the 2019/20 season, of which 16.5 million tonnes were wheat, and 19.1 million tonnes were corn.
U.S. health officials confirmed the first possible community transmission of the coronavirus in America, a troubling sign that the virus could be spreading in local cities and towns. (CNBC)
Weekly ethanol production increased from 1.040 million barrels per day to 1.054 last week. This most recent week was 2.5% over last year. The year to date numbers come to -0.2% year/year. But USDA’s new goal for the year is +0.9%. Keep in mind production since mid-November has been strong.
President Donald Trump appointed Vice President Mike Pence to lead a task force to combat the spread of the coronavirus. Speaking during a news conference, Trump cited Pence’s experience as governor of Indiana as qualifying him to spearhead the growing threat of the global outbreak. (Politico)
In the first six weeks of the year US hog slaughter was 6.4% over last year. The last two weeks, not included in that stat, ran +3.9% and 5.4%. We are forecasting this week, assuming a 90,000 head Saturday run (2.558 million), at +5.0%. These three weeks have improved the supply situation.
Yesterday’s weekly Iowa/Southern Minnesota hog weight report showed an increase in barrow/gilt weights from 285.3 to 285.6 lbs. in the latest week. Compared with last year that weight number is unchanged. The previous week’s weight report showed numbers at -0.3% year/year.
More cash cattle traded at $115 yesterday. This marks a $5 break vs. last week. Traders continue to price in the potential risk that coronavirus represents to the US economy.
Consumer Confidence was increased from January’s 130.4 index reading to 130.7. That is the best number since August. Consumer Confidence is one of the economic reports we use to monitor consumer beef demand.