Traders Await New Catalyst

Good Morning from Allendale, Inc. with the early morning commentary for May 14, 2020.

Grain Market traders await a new catalyst to determine the next direction in pricing. With U.S. plantings progressing rapidly, can export sales, NOPA crush, or Chinese demand change the tide?

Export sales will be released this morning at 7:30 AM CDT. Traders expect to see corn sales of 1,100,000 to 2,100,000 tonnes (new and old crops combined), 700,000 to 1,500,000 tonnes of soybeans, 250,000 to 600,000 wheat, 100,000 to 300,000 soymeal, and 5,000 to 30,000 tonnes of soyoil. Traders will also be watching for any new 8:00 AM sales to China.

NOPA crush is expected to show April soybean crushings of 170.483 million bushels according to a Reuters poll of analysts. That number would be the highest April ever, but below March’s all time record of 181.374. The crush report will be out tomorrow at 11:00 AM CDT.

Ethanol production slightly improved to 617,000 barrels per day last week. The prior week was 598,000 bpd. On a year/year basis last week was -41% vs. the prior week at -42%. We are not much improved from the worst of things three weeks ago at -48%.

ADM’s CEO, Juan Luciano said they remain optimistic that China will meet its Phase 1 trade deal ag buying agreements seen though they have been slow to start.

China is allocating more low-tariff import quotas for corn this year and may expand its use of wheat quotas as it seeks to step up farm purchases from the United States and meet a pledge to comply with global trade rules, according to three sources. (Reuters)

FranceAgriMer estimates that French wheat exports outside the E.U. will hit 13.3 million tonnes due to big sales to China and expected sales to Morocco. Their previous estimate was 13.2 million tonnes. The new figure would represent a new record.

Rain has started falling across much of the Midwest and is expected through Sunday, bringing fieldwork to a halt. The forecast call for drier weather for a few days next week before rain returns.

USDA cut 2020 pork production from 29.035 billion to 27.436. This new number is 0.7% under last year. By quarter they have production -8.8% Q2, +2.9% Q3 and -5.4% for Q4. Like with cattle, this is an estimate of production from plants, not hog numbers available.

Hog slaughter increased to 373,000 head yesterday. That was over Tuesday’s 361,000. It was also over the two private market estimates of 367,000 from Allendale and 365,000 from another firm.

The Fed Cattle Exchange saw 10 lots sold at $110. Last week it traded at $95 and $95.25.

Dressed bids yesterday started at $170. We have light sales at $181 and $182. Last week’s dressed average was $160.

Dressed beef values were lower with choice down 9.40 and select down 13.73.  The Feeder cattle index is 123.52.  Pork cut-out values were up 4.39.

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