Grain Prices Near Contract Highs After Strong Export Sales

Good Morning from Allendale, Inc. with the early morning commentary for February 1, 2021.

Grain Markets push higher as grain export sales continue to pour in from other countries (primarily China).  Trade will continue to watch daily export sales and South American weather as Brazil harvest delays remain as well as Safrina corn plantings are also behind.    

Last week, March corn futures were up 46.75 cents, March soybeans were up 56 cents, March wheat up 28 cents, March soymeal was up $8.10 and March soyoil was up 233 points.

CFTC Commitments of Traders showed funds new net positions of long +364,229 corn contracts, long +156,590 soybean contracts, long +21,275 wheat contracts, long +71,803 live cattle contracts and long +43,147 lean hog contracts.

USDA Soybean crush report will be released this morning.  Trade is looking for December U.S. crush at 193.9 million bushels (191 mb in November, 184.7 last year).  Oil stocks expected at 2.254 billion lbs. (2.118 last month and 2.134 billion lbs. last year).

China purchased 6.3 million tonnes of U.S. corn last week finishing the week with a 2.108 million mt purchase Friday (2nd largest U.S. daily sale on record). China total U.S. corn purchases total 18.1 mmt estimating unknown U.S. corn purchases of 7.9 mmt to China brings their total U.S. corn purchases to 22.1 mmt.

Safras showed 2021 Brazil soybean crop at 133.1 mmt (USDA at 133 mmt). Soybean harvest at 1.4% (7.2% 5 -year average).  Mato Grosso safrina corn at 2.1% planted (15.4% average 5-year average).  This is the slowest pace since 2011.

USDA Bi-annual cattle inventory report showed All cattle/calves at 99.8 (99.7 average estimate, 98.9 last report) at 93.595 million head.  Beef cows at 99.4 (98.7 average estimate, 98.9 last report) at 31.158 million head.  Annual calf crop at 98.7 (99.2 average estimate, 99.3 last report) at 35.136 million head.

China Animal Agriculture Association estimated chinese pork output by March will still be 28% under the same period of 2017.  Production is increasing but it will take a while until it is fixed.  Chinese officials suggest production will be back on track by the end of the year.

Cash cattle trades at $113 last week.  Though $3 higher than the previous week, trade was not at the levels suggested by wholesale beef prices and other factors.

Dressed beef values finished higher with choice up 1.96 and select up 1.82.  The Feeder cattle index is 136.02.  Pork cut-out values were up 1.87.

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