CME to Close Trading Floor

Good Morning from Allendale, Inc. with the early morning commentary for March 12, 2020.

Markets across the globe continue to be shaken by the spread of coronavirus and the ramifications it may have on the world economy. Volatility in outside markets is spilling over into commodities pushing ag markets lower.

CME Group announced it will close the Chicago trading floor after trade tomorrow to reduce the risk of the spread of the coronavirus. In most markets, electronic trade already dominates, so this will have little impact on trade. However, it is another indication of the severity of this virus.

Over the last three days, we’ve sold 372,500 tonnes of soybeans for old crop delivery. This will be the best sales week to China since mid-December. As a reminder, Allendale’s expectation for old crop sales to China would require 441,000 tonnes each week. Traders are curious to see if the streak will continue at 8:00 AM this morning.

Weekly export sales will be released today at 7:30 AM CDT. Analysts expect to see corn sales of 600,000 to 1,300,000 tonnes, soybeans 400,000 to 825,000, wheat 225,000 to 675,000, soymeal 125,000 to 400,000, and soy oil 7,000 to 35,000.

Allendale’s Annual Acreage Survey has begun and will end later next week with results released before the USDA’s prospective plantings report. To help make our report as accurate as possible, we could use your numbers. Please take a moment to tell us your planting intentions, and register for the free results webinar too. Thank you!

Weekly ethanol production fell from 1.079 million barrels per day to 1.044 in the latest week. Declines are normal at this time of year though. In fact, this number was 3.9% over last year. Our year to date pace is now +0.2% over last year. We have 17 weeks of an improved production pace. We are on pace to meet USDA’s goal of a +0.9% pace for the whole year in corn for ethanol.

President Donald Trump announced a suspension of all travel from Europe to the United States for the next 30 days in an effort to curb the spread of the coronavirus. Trump said the European Union had “failed to take the same precautions” as the U.S. had implemented to contain the coronavirus outbreak. (Politico)

The Lean Hog Index, the measure of cash hogs for futures settlements, will increase to 57.81 today. That covers action through Tuesday’s cash hog trade. This is the best price since February 10.

The weekly Iowa/Southern Minnesota hog weight report showed an increase from 286.3 lbs. on 2/29 up to 286.7 as of 3/7. This new weight number is +0.7% year/year. The previous week’s weight was +0.4%.

Feeder Cattle posted limit down trade for the May through November contracts. The March and April did not though. Given that it is the first two contracts that determine expanded limits there will not be expanded limits today.

Cash cattle traded yesterday at $110 in the South. That was $3 under last week’s average. This is the lowest trade for cash since October when we were recovering from heavy summer/fall supplies. As a reminder, last year’s lowest trade was $99 in September.

Dressed beef values were mixed with choice up .08 and select down 2.22. The Feeder cattle index was at 133.05.  Pork cut-out values were up 0.86.

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