Good Morning from Allendale, Inc. with the early morning commentary for April 6, 2020.
Grain Markets are mixed as traders try to factor in a giant U.S. crop outlook for this year. Corn futures fell to a three-and half year low as energy prices pulled back further and threaten to decrease demand for ethanol. Soybean futures were weighed down by bumper crops estimated in South American. Wheat futures are higher.
Last week, May corn futures were down 15.50 cents, May soybeans down 28 cents, May wheat down 21.75 cents, May soymeal was down $19.50 and May soyoil was down 47 points.
The U.S. is entering what a senior official warned would be the “hardest” week of the coronavirus crisis as the death toll keeps mounting, but some saw glimmers of hope from a slight slowing of fatalities in hard-hit New York. “This is going to be the hardest and the saddest week of most Americans’ lives, quite frankly. This is going to be our Pearl Harbor moment, our 9/11 moment, only it’s not going to be localized, it’s going to be happening all over the country and I want America to understand that,” said U.S. Surgeon General Jerome Adams.
Allendale released estimates for this week’s USDA Supply and Demand report. We estimate corn ending stocks at 2,067 million bushels, soybeans 440 million bushels, and wheat at 950 million bushels. All are estimated to increase over last year.
CFTC Commitments of Traders showed funds new net position short -100,332 corn contracts, long +23,230 soybean contracts, long +35,971 wheat contracts, short -278 live cattle contracts and long +23,366 lean hog contracts.
USDA revised February soybean crush data originally released Wednesday afternoon, April 1. The revisions lowered February crush to be slightly less than market expectations from the initial reflection of sharply higher than expected crush, while February soybean oil stocks were lowered, but were still above wire service-reported market expectations. The USDA revised February soybean crush to 175.3 million bushels (originally 181.6 million reported, average market expectations initially reported of 176.9 million bushels). USDA revised February soybean oil production to 1.996 billion pounds (originally 2.075 billion reported), which prompted a downward revision in end February soybean oil stocks to 2.378 billion pounds (originally 2.420 billion reported).
Private exporters reported to the USDA export sales of 567,000 metric tons of corn for delivery to China. Of the total, 63,000 metric tons is for delivery during this marketing year and 504,000 metric tons is for delivery during the next marketing year.
Last week, choice boxed beef fell $20.89/cwt through last Friday’s morning report. Cash cattle traded $112 – $114 earlier last week but moved to $105 on Friday. This would imply April futures, with a normal basis applied, cash will settle around $90 this month.
Wholesale pork prices lost $13.07 last week. Since March 23, wholesale pork has fallen $22.79. The lean hog index is trading at $60.65.
Dressed beef values were sharply lower again with choice down 2.20 and select down 6.28. The Feeder cattle index is 121.07. Pork cut-out values were down 1.84.