Traders Hope for More of the Same

Good Morning from Allendale, Inc. with the early morning commentary for September 18, 2020.

Grain Markets traded mixed over night after yesterday’s soybean and wheat rally led by more overnight export sales and fund buying. Traders will look to see if more of the same can be expected today.

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Corn export sales of 1,609,185 metric tonnes, all for the 2020/21 marketing year were reported on the weekly export sales report. This was within the 800,000 – 1,900,000 trade expectation. Soybean export sales of 2,457,053 metric tonnes, all for the 2020/21 marketing year, also within the 1,500,000 – 2,800,000 trade expectation. Wheat export sales of 335,727 metric tonnes, all but 300 tonnes for the 2020/21 marketing year, again within the 300,000 – 700,000 trade expectation.

Overnight export sales to China have become a daily feature. Shipped old crop plus new crop on the books totals 14.4 million tonnes for corn and 33.3 million tonnes for soybeans. Of these numbers, the new crop numbers total 12.3 mt for corn and 28.8 mt for soybeans.

World Weather Inc. noted in a special report yesterday that warm, dry weather is on tap for U.S. winter wheat regions through September, and that this could prove interesting given a similar situation in E.U. wheat regions.

Continued dryness in northern Argentina’s wheat fields is driving down expectations for wheat yields in the area with some areas possibly seeing only half of their normal yields according to the Buenos Aires Grains Exchange.

China will not raise their 2021 corn and wheat import quotas according to a state planner. Instead, they will remain at the current levels of 7.2 million tonnes of corn and 9.636 million tonnes of wheat.

President Trump announced a new $13 billion COVID-19 assistance plan to farmers at a campaign rally last night. Details of the plan are expected from the USDA later today.

Managed money funds are estimated to have been very active in ag commodities in recent trade. Since last week’s Commitment of Traders report, it is estimated they bought 12,000 contracts of corn, and 19,000 contracts of soybeans for the reportable period (Wednesday to Tuesday).  Recent days have seen even bigger buying days.

Western Iowa saw $104/$105 trades and $105 bids in Central Nebraska have been passed. Morning sales were noted in Nebraska at $103. For the South $103 was sold in Kansas, inline with yesterday’s $103/$104.

Wholesale beef was down 0.35 on yesterday morning’s report. That brings the week’s loss to 5.80. The seasonal September break didn’t stop until October 7 and October 10 in the prior two years. At this time we suggest that packers will see a reduction in margins ahead.

USDA reported 14,274 tonnes in sales of beef for the week that ended 9/10. This was 14% under last year. Sales have been below last year for now four weeks in a row. 50,568 tonnes in sales of pork for the week. This was 256% over last year. Sales have been strong since the start of July.

Germany found another wild boar with ASF. This brings the total to seven boars. Allendale forecasts German pork exports outside the EU to run 20% of the EU total this year. That brings the complete German Jan – Dec export outside the EU at 820,000 metric tonnes, 68,000 tonnes per month.

Dressed beef values were lower with choice down 0.33 and select down 1.12.  The Feeder cattle index is 141.21.  Pork cut-out values were up 3.89.

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