Good Morning from Allendale, Inc. with the early morning commentary for April 23, 2020.
Grain Markets were mixed overnight as traders look to the latest in demand numbers in this morning’s export sales numbers.
Weekly export sales are expected to show corn sales of 650,000 to 1,400,000 tonnes, soybeans 350,000 to 1,050,000, wheat 300,000 to 850,000, soymeal 100,000 to 325,000, and soyoil 8,000 to 40,000.
Weekly ethanol production this past week fell to a new low of 563,000 barrels per day. That was under last week’s 570,000. Production versus last year fell from last week’s -44% to now -46%. Ethanol stocks are currently 22% over last year. Margins are finally improving a little. Also positive, gasoline demand was only 44% under last year (-46% and -48% previous two weeks).
USDA’s attache to Australia noted, “Beneficial and widespread rainfall in early 2020 has increased prospects for a good start to the Australian grain sowing season. This follows two years of below-average grain crops as a result of drought conditions in eastern Australia. For wheat, production is forecast at 23 million metric tons (MMT) in marketing year (MY) 2020/21, more than 50% larger than the MY 2019/20 crop.”
USDA’a attache to Argentina noted, “Wheat production for 2020/2021 is projected at a record 20.2 million tons on a 2% area increase with exports of 13.4 million tons (including wheat flour), the second largest in history. Corn area in 2020/2021 is forecast stable with production at 48.5 million tons and exports at 34 million tons, 1.5 million tons below expectations for 2019/2020. Rice production and exports are forecast unchanged.”
Brazilian Agriculture Minister Dias said that the government will announce support measures for the sugarcane and ethanol sector, as global energy prices tank. The government is considering eliminating a tax on ethanol and increasing a tax on gasoline.
Russia’s Ag ministry announced that they country has used up half of its export quota, stating that exporters had used up 3.504 million tonnes of the planned 7 million tonnes. Once that quota is hit, they are expected to shut off exports.
Initial and Continuing jobless claims will be watched with interest this morning as the shutdown of the U.S. economy continues due to the coronavirus. The data will be released at 7:30 AM CDT. New Home Sales will follow at 9:00.
Cold Storage report showed pork stocks from the end of February to the end of March fell by 27 million lbs. to 621.933. Beef in frozen storage grew by 8 million lbs. to 502.424 million from the end of February to the end of March. Both cattle and hog slaughter was quite large during March. We were dealing with larger than expected offerings from producers in the first place. On top of late, late March processing was stepped up to deal with consumer stockpiling in the third week of March.
USDA Cattle on Feed report will be released this Friday at 2 p.m. CDT. Average analysts forecast On feed at – 5.1% under last year, Placements at -21.1% under last year, and Marketings are seen +12% over last year.
With kill levels down by 20% right now the wholesale beef market is on fire. It was up 15.06 last week. This week it is up 36.76. Yesterday’s jump itself was 15.90. Yesterday’s $275.75/cwt. quote surpasses the previous record of $265.59 from 5/9/15 (back when expansion was beginning and heifers were held back from feedlots).
Dressed beef values were higher with choice up 15.90 and select up 12.20. The Feeder cattle index is 119.66. Pork cut-out values were up 3.03.