Good Morning from Allendale, Inc. with the early morning commentary for May 7, 2020.
Grain Markets continue to weigh demand prospects in light of the economic shutdown due to COVID19, and the renewed tensions between the United States and China regarding the origins of the virus.
Weekly export sales are expected to show corn sales of 700,000 to 1,500,000 tonnes, soybeans 700,000 to 1,400,000 tonnes, wheat 150,000 to 650,000, soymeal 100,000 to 325,000, and soy oil 5,000 to 35,000.
Traders are monitoring the coming potential for frost and freezes in the Midwest this weekend. World Weather, Inc notes, “The cold will damage some of the recently emerged summer crops in the Midwest and may raise some threat to soft wheat, as well.”
Bloomberg released its poll of average analyst estimates for next week’s USDA Supply and Demand report. They expect to see 2020/21 corn ending stocks at 3,410 million bushels, soybeans 432 MB, and wheat 824 MB. 2019/20 ending stocks are estimated at 2,278 MB for corn, 495 MB for soybeans, and 974 MB for wheat.
Ethanol production improved from 537,000 barrels per day 4/24 to now 598,000 for week ended 5/1. The previous week was 48% under last year. This new number is 42% under last year.
A spokeswoman for China’s Foreign Ministry delivered a scathing criticism on Wednesday of Secretary of State Mike Pompeo over his assertion last weekend that the coronavirus that has killed hundreds of thousands of people around the world originated in a Chinese laboratory. (Washington Post) And so the back and forth between the US & China continues.
U.S. private employers laid off a record 20.236 million workers in April as mandatory business closures in response to the novel coronavirus outbreak savaged the economy, setting up the overall labor market for historic job losses last month. (Reuters)
Tyson’s Waterloo, IA plant, originally set to open on today, started operations yesterday instead. Waterloo is Tyson’s largest plant at 19,500 head of hogs per day at full capacity.
Four lots on the Fed Cattle Exchange traded yesterday. Prices were at $95 and $95.25. Separate from the FCE, there were also $110 cash trades posted in KS, OK and TX. These were likely higher than they needed to be and represent packers offering some of their margin.
March sale barn volume was -47.7% lower than last year. Sale barn volume is about half monthly placements. Total March placements fell by 22.7%. Completed April sale barn volume is 24.4% under last year.
President Trump has asked the U.S. Justice Department to look into the possibility that the meatpacking industry broke antitrust laws regarding the price they paid for cattle, even as cutout values screamed higher.
Dressed beef values were higher with choice up 20.19 and select up 21.25. The Feeder cattle index is 119.50. Pork cut-out values were up 1.48.