Focus Back on USDA

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

Grain Markets await the latest in data from the USDA with the arrival of weekly export sales out early, followed by the Supply and Demand report later this morning. After the report data is digested, expect weather forecasts to be front and center.

Weekly export sales will be out at 7:30 AM CDT today. Analysts expect to see corn sales of 500,000 to 1,100,000 tonnes, soybeans 700,000 to 1,700,000, and wheat sales of 200,000 to 800,000.

USDA’s Supply & Demand report will be released today at 11 A.M. CDT.  Average trade estimates have old crop corn ending stocks at 2.148 billion bushels, old crop soybean stocks at 577 million bushels, and old crop wheat stocks at 979 million bushels. Corn new crop ending stocks are estimated at 3.360 billion bushels, soybean new crop ending stocks at 426 million bushels, and wheat new crop ending stocks at 897 million bushels.

Dryness in Argentina may derail plans for a record 17 million acres of wheat plantings according to the Rosario grains exchange. As early as last month, the exchange was expecting a record 22 million tonne crop in 2020/21. Without rain, they said, the country could see a “significant drop” in planted wheat acres.

Weekly ethanol production rose from 765,000 barrels per day two weeks ago to 837,000 last week. From a year/year perspective this increase was mild, from -26.7% to -23.6%.

Datagro estimates that Brazilian farmers have sold 106.5 million tonnes of their 2019/20 soybean crop, or 87.5% of the country’s crop. They said 2020/21 sales are already at 33.1% sold, well above the five year average.

SovEcon has raised its estimate for Russia’s 2020 grain crop to 128.6 million tonnes, up from its previous estimate of 126.3 million tonnes. Its wheat estimate specifically was raised to 82.7 million tonnes from 81.2 million tonnes based on better than expected weather.

FranceAgriMer increased its estimate for French wheat exports outside the E.U. to 13.45 million tonnes for 2019/20, up from its previous estimate of 13.3 million tonnes. The revised figure would also represent a new record if realized.

Goldman Sachs has warned that the rally in commodities is not reflective of the underlying fundamentals (except in the case of metals), and said that they see downside risk in ag’s and energy markets.

Better cash cattle price action was reported yesterday. $108 was noted from North to South. The Fed Cattle Exchange moved one lot at $105. Tuesday’s cash trade at the Yankton sale bar was $97 – $101.

August live cattle are still eyeing the chart gap at 95.45 – 95.60. Most in trade expect it to be filled at some point.

Six days in a row of bear spreading in hogs was stopped yesterday. During the six day period the December advanced over July by 7.22. Yesterday’s close puts the Dec at a 0.97 premium over July.

China is building industrial pig farms near its urban areas, reversing years of policies to relocate the livestock over waste concerns, as the government prioritises food security over the environment after African swine fever decimated its herds. (Reuters)

Dressed beef values were sharply lower again with choice down 10.94 and select down 5.11.  The Feeder cattle index is 129.70.  Pork cut-out values were down 0.42.

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