Trade Prepares for December WASDE Report

Good Morning from Allendale, Inc. with the early morning commentary for December 7, 2020.

Grain Markets continued to slide lower as crop conditions improve in Brazil and Argentina.  Demand for U.S. grain has also slowed down over the last few weeks creating export sale concerns.  Trade is expecting light volume trading as we head towards Thursday’s monthly WASDE report.     

Last week, March corn futures were down 13.50 cents, January soybeans were down 30.50 cents, December wheat down 28.50 cents, December soymeal was down $11.40 and December soyoil prices were unchanged.

USDA Weekly Crop Progress Report will be released this afternoon at 3 p.m. CDT.  Trade is expecting winter wheat conditions 1-2% higher to 45% GTE (44% GTE last week, 55% GTE five-year average).

CFTC Commitments of Traders showed funds new net position long +270,633 corn contracts, long +194,683 soybean contracts, short -4,397 wheat contracts, long +39,813 live cattle contracts and long +38,359 lean hog contracts.

Private exporters reported export sales of 182,020 metric tons of corn for delivery to Mexico during this marketing year. 

Trade expects the USDA December WASDE report this Thursday to drop corn stocks 11 million bushels off of last month, soybean stocks to decline 22 million bushels and wheat stocks to fall 3 million bushels.

Safras last week pegged Brazil’s 2021 soybean crop sold by farmers at 56.5% (37.8% average at this time) with 2020 soybean supplies nearly depleted.  Ag Rural trimmed Brazil’s first corn crop (20% of total corn production) to 19.4 million metric tons (19.7 mmt last year). 

Reuters poll pegged Brazil’s 2021 soybean crop at 131.79 million metric tons (133 mmt USDA estimate and 126 mmt last year).  Brazil analyst showed soybean planting at 88% complete.  Argentina reported corn planting at 35% complete (49% last year) and soybean planting at 48% complete (49% last year).

February live cattle futures finished the week down $1.22 and January feeders $0.32 lower.  First notice day for December live cattle futures is today.

Dressed beef values were sharply lower with choice down 4.17 and select down 2.42.  The Feeder cattle index is 139.18.  Pork cut-out values were up 1.72.

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