South American Weather, Demand the Focus Post USDA December 11, 2020
Good Morning from Allendale, Inc. with the early morning commentary for December 11, 2020.
Grain Markets were mixed overnight as traders continue to adjust to yesterday’s USDA numbers. With that report now complete for the month, traders will focus on South American weather, demand headlines, and the holidays.
USDA’s Supply and Demand report had no changes for the corn balance sheet, leaving U.S. 2020/21 ending stocks at November’s 1.072 billion. Soybean stocks were lowered from 190 to now 175 million bushels, over the 168 trade estimate. Wheat ending stocks were lowered from 877 to 862. The trade estimate was 874.
World numbers showed 2020/21 corn declining from 291.4 to 289.0 million tonnes. Soybean stocks were lowered from 86.5 to 85.6 million tonnes. Argentine production was lowered by 1.0 mt with no change for Brazil. World wheat stocks were lowered from 320.5 to 316.5 million tonnes.
Weekly export sales counted 1,362,192 metric tonnes for corn, within the 700,000 – 1,500,000 trade expectation. Soybean sales of 737,000 metric tonnes were also within the 400,000 – 800,000 trade expectation. Wheat export sales were 616,519, over the 200,000 – 550,000 trade expectation.
Argentine grains inspectors and oilseeds workers said on Thursday they would extend a wage strike as stalling contract negotiations threaten to interrupt exports from one of the world’s main grain producers. (Reuters)
Conab lowered their soybean crop estimate from 134.953 million tonnes to 134.5. USDA kept theirs at 133. Private estimates in recent days range from 129.5 to 135.0.
The Russian government indicated October wheat exports at 4.591 million tonnes, over the 3.771 last year at the same time. September was strong too at 5.024 vs. 4.186 last year. Private research firm, SovEcon, estimates November at 4.2 mt, also above last year’s 2.8.
Russia is considering imposing a grain export quota and wheat export tax for Feb. 15-June 30, following President Vladimir Putin’s criticism of rising food prices. (Reuters)
FranceAgriMer increased its estimate for French wheat exports outside the EU this year, marking the third month in a row of increases. They cite strong Chinese demand of the crop for the increase.
Wholesale beef continued to plummet this week and cash traded down to $105. Can seasonals save the day?
USDA raised their pork production forecasts for 2020 and 2021 by 155 million pounds and 25 million pounds respectively.
Dressed beef values were lower with choice down 3.67 and select down 3.18. The Feeder cattle index is 137.11. Pork cut-out values were up 0.83.
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