Outlook Forum Numbers in Focus

Good Morning from Allendale, Inc. with the early morning commentary for February 20, 2020.

Grain markets are lower as traders await the latest in USDA numbers due out this morning. Hopes continue to increase that Chinese purchases of U.S. Ag good will be coming soon, while the “Party Line” indicates improvement in coronavirus concerns in China.

USDA’s annual outlook forum kicks off this morning with the latest in estimates for the 2020/21 crop numbers. Analysts believe USDA will report corn planted acres at 93.6 million, soybeans 84.6 million, and wheat 44.9 million.

The U.S. Department of Agriculture on Thursday announced a goal for biofuels to make up 30% of U.S. transportation fuels by 2050, a move that could bolster an industry that has been otherwise battered by the Trump administration. (Reuters)

Production estimates have corn at 15.111 billion bushels, soybeans 4.225 bb, and wheat 1.860 bb. Ending stocks are estimated at 2.443 bb of corn, .519 bb soybeans, and .829 bb wheat.
Rumors of Chinese interest inU.S. sorghum and soybeans floated around the market late yesterday. While most would like to believe the rumors are true, they’d like to see it confirmed.

Corn traders look to ethanol production out this morning, which saw a setback on last week’s report which means we will see if it recovers or if a slowdown is the new trend to expect. Weekly export sales are delayed until tomorrow.

Russia Deputy Ag Minister see the country’s wheat crop 3% to 5% higher than last years 73.5 million tonnes (which was the 2nd highest ever).

ProAgro estimates Ukraine’s 2020 grain harvest could fall 3.19% to 72.673 million tonnes from last year’s record 75.1 million tonnes. Of the 2020 numbers, wheat harvest is seen falling by 7.31% to 26.234 million tonnes from 28.3 million tonnes in 2019.

Chinese leader Xi Jinping is striking an increasingly confident note that the country can control the coronavirus outbreak and manage the economic and social fallout, as some Chinese health experts predict a peak in infections by the end of the month. (Washington Post)

There were no trades on the weekly Fed Cattle Exchange yesterday. There were three lots for sale located in Kansas and Texas. Later in the day we began seeing light $120 trades in Texas. Last week, both Texas and Kansas traded at $119.

Average estimates for tomorrow’s Cattle on Feed report are On Feed as of Feb 1 2.4% above last year, January placements 1.5% above last year, and January Marketings 0.7% above last year.

Allendale expects Cold Storage to show a 659 million pound total pork stock level for the end of January. Beef stocks are estimated at 492 million pounds.

China’s sow herd increased by 1.2% in January from December, said the Ministry of Agriculture and Rural Affairs on Thursday, the fourth consecutive month in which its breeding herd number had increased.

Dressed beef values were lower with choice down .56 and select down 1.97.  Feeder cattle index price was at 141.10.  Pork cut-out values were down 1.00.

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