Good Morning from Allendale, Inc. with the early morning commentary for June 10, 2020.
Grain Markets were lower as traders expect more beneficial weather throughout the main growing areas. Futures prices firmed up later in yesterday’s session as several extended forecast added additional heat and less precipitation. Most markets stayed in a tight trading range on light volume as traders position for tomorrow’s monthly WASDE report.
USDA June WASDE report will be released tomorrow at 11 a.m. CDT. Average trade estimates show old crop corn ending stocks at 2.148 billion bushels (2.098 billion bu. last month), old crop soybean stocks at 577 million bushels (580 million bu. last month) and old crop wheat stocks at 979 million bushels (978 million bu. last month). Corn new crop ending stocks estimated at 3.360 billion bushels (3.318 billion last month), soybean new crop ending stocks at 426 million bushels (405 million bushels last month) and wheat new crop ending stocks at 897 million bushels (909 million bushels last month).
Canada and the U.S. are set to extend a ban on non-essential travel to late July as both countries seek to control the spread of the coronavirus. Canadian and U.S. sources said although the governments had not yet made a final decision, a further extension was highly likely.
China’s state-owned trader, Sinograin bought at least two bulk shipments of U.S. soybeans yesterday (at least 120,000 tonnes) for shipment in December from U.S. Pacific Northwest ports, two U.S. traders familiar with the deals said. State crusher COFCO also inquired about prices for one to two cargoes of soybeans shipped in November, but traders could not immediately confirm that any of those deals were finalized.
Chinese companies are putting off plans for U.S. listings as tensions between the two countries grow. Chinese businesses have raised $1.67 billion via IPOs in New York so far this year and look to raise another half billion more on U.S. exchanges in the remainder of this year, Dealogic data shows. Last year, they raised $3.5 billion on U.S. exchanges.
Six House Republicans urged the U.S. Ag Department yesterday to ease regulations on meat processors that they said make it harder for smaller companies to compete. The lawmakers requested that Perdue consider giving smaller processors “more flexibility” in handling Hazard Analysis and Critical Control Point Plans to address food safety issues and to clarify and streamline the approval process for meat labels.
The Argentine government is sending a bill to pave the way for a formal state takeover, whereby Vicentin (which recently declared bankruptcy) would be overseen by the agricultural arm of state energy firm, YPF. President Fernandez said the move was key to securing Argentina’s food supply and all-important agricultural export sector, others local businesses in the industry strongly disagree.
JBS received permission from a court in Brazil’s state of Rondônia to reopen a beef plant even after 266 employees there tested positive for COVID-19, according to state labor prosecutors. Over 60% of the people infected in the town are employed by JBS, the prosecutors said, adding there were at least three COVID-19 deaths linked to JBS workers. JBS confirmed the three deaths in the town but said the deceased, though family members of JBS workers, did not actually live with them.
Over the past 20 years, Allendale’s cash hog database only shows one other instance where hog prices were higher in December than July. Yesterday’s hog kill hit a new high again to 450,000 head, yet a normal summer weekday would average 488,000 head.
Dressed beef values were sharply lower again with choice down 7.58 and select down 3.17. The Feeder cattle index is 129.52. Pork cut-out values were down 1.62.