Supply Concerns Hold Down Markets April 14, 2020
Good Morning from Allendale, Inc. with the early morning commentary for April 14, 2020.
Grain Markets are lower overnight as demand concerns still remain for traders as several meat plants were shut down due to the coronavirus pandemic. Markets will be focused on weather issues as planting gets underway as well as growing export sales.
Crop progress report showed corn plantings at 3% complete (3% expected, 3% last year, 4% five-year average). Hard red spring wheat plantings at 5% (5% expected, 2% last year, 9% five-year average). Winter wheat conditions at 62% GTE (62% expected, 62% last week and 60% last year). Cotton planting at 9% complete (7% last week, 7% last year and 6% five-year average).
USDA weekly grain export inspections showed corn exports at 1,030,000 tonnes (800,000 to 1,200,000 expected), soybean exports at 442,000 tonnes (300,000 to 500,000 expected) and wheat exports at 609,000 tonnes (300,000 to 500,000 expected).
USDA reported export sales of 120,000 metric tonnes of hard red Winter wheat to an unknown destination. 60,000 metric tonnes is for delivery during this marketing year and 60,000 metric tonnes is for delivery during next marketing year.
March NOPA soybean crush report will be released tomorrow with crush likely to be its third largest ever at 175.163 million bushels (166.288 mb last month, 170.01 million bushels last year). Soyoil stocks likely at 2.067 billion lbs. (1.922 billion lbs. last month, 1.761 billion lbs. last year).
USDA will spend up to $15.5 billion in the initial phase of its plan to support the nation’s food supply chain against the impacts of the coronavirus outbreak, according to sources familiar with the matter. The initial plan will include direct payments to farmers and ranchers, along with other support measures, using a portion of the $23.5 billion approved by Congress in the coronavirus stimulus bill last month, along with some existing USDA funds, according to sources. (Reuters)
U.S. & Canada meat demand has dropped roughly 30% in the last month as declining sales of restaurant meats like steaks and chicken wings outweighed a spike in retail demand for ground beef, said Christine McCracken, Rabobank’s animal protein analyst. Frozen meats in U.S. cold storage facilities remain plentiful, but supply could be whittled down as exports to China increase. “There’s a huge risk of additional plant closures,” McCracken added.
China has purchased 35.56 billion yuan ($5.05 billion) worth of U.S. farm goods in the first three months of 2020, according to customs data. Included, China bought 7.81 million tonnes of U.S. soybeans and 168,000 tonnes of U.S. pork, according to data from the General Administration of Customs.
Lean Hog Index was at 48.02 through Friday’s cash hog trade. April lean hog futures will expire tomorrow. Wholesale pork was up 1.78 on Friday and 0.02 yesterday. This minimal upside implies end users simply are not concerned with reduced supply offered to them by plants and more concerned with lower demand.
Dressed beef values were higher with choice up 1.93 and select up 3.07. The Feeder cattle index is 114.41. Pork cut-out values were up 0.02.
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