Good Morning from Allendale, Inc. with the early morning commentary for April 16, 2020.
Grain Markets were mostly higher overnight after yesterday’s ethanol numbers weighed heavily on corn, while NOPA crush was supportive to soybeans. Export data out this morning will be monitored for further demand clues, all while weather updates are watched for planting updates.
Export sales this morning are expected to show corn sales of 750,000 to 1,550,000 tonnes of corn, 250,000 to 650,000 tonnes of wheat, and 375,000 to 900,000 tonnes of soybeans. The report will be out at 7:30 AM CST.
CONAB, Brazil’s farm data agency, is concerned that falling U.S. corn prices will increase competition between the two countries according to a statement by the group’s president.
The Rosario Grains Exchange estimates Argentina’s 2019/20 soybean crop at 50.5 million tonnes, a drop from their previous estimate of 51.5 million. The corn crop was lowered to 49.8 million tonnes from the previous estimate of 50 million tonnes. Poor weather in March was cited for the drop.
Weekly ethanol production slipped to 570,000 barrels per day. That was 44% under last year. The prior week was -33%. We are likely nearing the worst numbers of the year. Gasoline supplied to the US consumer was -46% year/year last week. That was better than the -48% the prior week. Also, margins are still negative but they have improved over the past two weeks with a slight rise in ethanol and DDG prices.
NOPA Crush was reported at 181.374 million bushels, easily beating the 175.163 estimate. This was a new all-time record and beat the previous 176.940 from January. This month’s number was 6.7% over last year. It helps bring our year to date pace to 2.1% over last year. Assuming a +2% to +4% pace continues through August then USDA will be raising crush 10 – 25 million bushels next month.
Bunge’s director of logistics for South America stated that the company is shipping the Brazilian soybean harvest without disruption, despite the coronavirus outbreak. He stated that they have exported 2.6 million tonnes of grains out of Brazil in the first quarter, the majority of which were soybeans.
Ukraine, one of world’s top grain exporters, is ready to ban wheat exports if sales exceed limits agreed with traders, the deputy economy minister in charge of agriculture told Reuters on Wednesday. (Reuters)
Sonny Purdue confirmed the White House is planning a support purchase of “US ag products. The talk is $15.5 billion worth. “We want to purchase as much of this milk, or other protein products, hams and pork products, and move them into where they can be utilized in our food banks, or possibly even into international humanitarian aid.”
Widespread industry talk yesterday suggested Cargill’s Fort Morgan, Colorado plant would not operate a second shift due to employee virus issues. This is a 5,000 head per day plant.
Anecdotal reports suggest there is intentional euthanization of piglets in many areas in the Midwest. There is no data for us to analyze on this. There is corroborating data suggesting moderate breeding herd liquidation. Sow slaughter during March was 8.6% over last year.
Dressed beef values were higher with choice up 3.86 and select up 6.45. The Feeder cattle index is 114.23. Pork cut-out values were down .97.