Demand Back in Focus Post USDA

Good Morning from Allendale, Inc. with the early morning commentary for November 11, 2020.

Grain Markets continued higher overnight after yesterday’s USDA data led surge. With US ending stocks tightening, traders will continue to focus on demand numbers, including overnight export sales. All of us at Allendale would like to wish our service members and military families a Happy Veteran’s Day. Thank you for your service and sacrifice!

New crop corn stocks were lowered from 2.167 billion bushels last month to 1.702 on this week’s Supply and Demand report. That was far under the trade estimate of 2.035 (ALDL 2.079). Soybean stocks were lowered from 290 to now 190 million bushels. This was under the 235 trade estimate. Wheat ending stocks were lowered from 883 to 877. The trade estimate was 881.

World numbers saw corn stocks lowered from 300.5 million tonnes to 291.4, soybeans were lowered from 88.7 to 86.5 million tonnes, and wheat stocks were lowered from 321.5 to 320.5 million tonnes.

CONAB estimates Brazil’s soybean crop at 134.953 million tonnes, a slight increase from their previous estimate of 133.673. The corn crop is estimated at 104.891 million tonnes, a drop from last months 105.167. They estimate soybean exports at 85 million tonnes and corn 35 million.

ANEC estimates Brazil’s November corn exports at 4.8 million tonnes, a jump from last week’s 4.15 million. They estimate November soybean exports at 763,000 tonnes, an increase from last weeks 688,000.

Argentina agro-export companies and grains port workers are still far from reaching a salary agreement, a port chamber source said on Tuesday, prolonging strikes that continue to impact shipments from one of the world’s top exporters. (Reuters)

Managed money funds were thought to be active buyers in yesterday’s rally. Traders estimate they bought more than 50,000 corn contracts, 30,000 soybeans, and just under 10,000 wheat. Actual numbers will be included in this Friday’s Commitments of Traders report.

McDonald’s announced it would debut a McPlant line of food offerings starting next year. This may eventually include burger and chicken substitutes as well as breakfast sandwiches.

Feeder cattle sales in sale barns have been low for seven weeks. Last week’s offering of 268,500 head, 249,700 of that was non-video, was 39% under last year.

Five of the next six trading weeks should post the largest hog supplies of the year. On top of this, hog weights are 1.9% over last year.

Dressed beef values were higher with choice up 4.86 and select up 6.18.  The Feeder cattle index is 135.85.  Pork cut-out values were down 2.71.

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