Good Morning from Allendale, Inc. with the early morning commentary for October 19, 2020.
Grain Markets pushed higher overnight led by wheat futures as they hit near six-year highs as dry weather & frost damage concerns hit Argentina, U.S. Plains and parts of the Black Sea regions. Corn and soybean futures were also higher after solid profit taking during Friday’s trading session. Traders will continue to focus on U.S. harvest progress and South American weather conditions.
Last week, December corn futures were up 7.00 cents, November soybeans were up 15.50 cents, December wheat up 31.50 cents, December soymeal was up $3.80 and December soyoil was down 102 points.
USDA Weekly Crop Progress Report will be released this afternoon at 3 p.m. CDT. Trade is expecting corn harvest at 51-52% complete (41% last week, 43% average). Soybean harvest expected at 74-75% complete (61% last week, 58% average).
CFTC Commitments of Traders report showed funds new net position long +170,869 corn contracts, long +226,444 soybean contracts, long +38,590 wheat contracts, long +56,038 live cattle contracts and long +37,154 lean hog contracts.
Private exporters reported export sales of 128,000 metric tons of corn for delivery to Mexico during this marketing year. Export sales of 175,000 metric tons of soybeans for delivery to Unknown during this marketing year and 216,150 metric tons of soybeans received during the reporting period for delivery to Unknown destinations during this marketing year.
China passed a law restricting exports of controlled items, allowing the government to act against countries that abuse export controls in a way that harm’s China’s interests, state media said. Controlled items include military and nuclear products, as well as other goods, technologies and services and relevant data and will take effect on December 1st, according to Xinhua news reports.
Brazil will suspend tariffs on corn and soybean imports from countries outside the Mercosur trade bloc until early next year to help reduce food prices that are pushing up inflation, the economy ministry said. The tariff on corn and soybean imports from outside Mercosur (including Paraguay, Uruguay and Argentina), was currently at 8%, 6% for soymeal and 10% for soyoil.
Cash cattle trade was stable with the previous week with trades of $107 and $108. Rising feed costs for cattle feeders and dry late-seasonal forage is being discussed more frequently.
Pork export sales last Friday were weak at 26,803 tonnes (the lowest in eight weeks). After last week’s 60,195 tonnes sale this was a clear disappointment. On a brighter note, year to date pork sales are at 1,794,628 tonnes (19% over last year).
Dressed beef values were lower with choice down 0.45 and select down 2.98. The Feeder cattle index is 140.22. Pork cut-out values were down 2.23.