Coronavirus Overshadows Trade Deal May 1, 2020
Good Morning from Allendale, Inc. with the early morning commentary for May 1, 2020.
Grain Markets are lower to begin the new month as fresh concerns mount over trade between the U.S. and China. Traders continue to monitor weather forecasts around the globe as well as demand signals in a world trying to reopen from the coronavirus shutdown.
President Trump said his hard-fought trade deal with China was now of secondary importance to the coronavirus pandemic and he threatened new tariffs on Beijing, as his administration crafted retaliatory measures over the outbreak. (Reuters)
March crush is estimated at 191.5 million bushels according to a survey conducted by Reuters. If realized, this would be a new record, beating January’s 188.8 million. USDA will release the crush report today at 2:00 PM CDT.
Weekly export sales had corn sales of 1,695,730 metric tonnes, 1,356,689 for old and 339,041, for new. Soybean export sales totaled 1,183,293 metric tonnes, 1,078,293 for old and 105,000 for new. (that old crop number was the best for this week in history). Wheat export sales were reported at 622,470 metric tonnes, 467,355 for old and 155,115 for new.
Chinese state-owned importers bought at least five bulk cargoes of U.S. soybeans on Thursday, or at least 300,000 tonnes, for shipment mostly from U.S. Gulf Coast export terminals in August and September, two traders with knowledge of the deals said. (Reuters)
The Buenos Aires Grains Exchange estimates that 68.2% of Argentina’s soybean crop has been harvested to date. They estimate the crop size at 49.5 million tonnes, while corn should be slightly higher at 50 million tonnes.
APK-Inform lowered its wheat harvest estimate for Ukraine to 24.5 million tonnes from 26.7 million due to poor weather.
The International Grains Council lowered its estimate of world wheat production for this coming marketing year to 764 million tonnes, a drop of 4 million. As in Ukraine, they cite “less than ideal” growing conditions across the EU as well as Russia.
Managed money funds were thought to have helped fuel yesterday’s rally in grains. Some traders believing they may have bought as many as 14,500 corn contracts, 11,500 soybeans, and 5,500 wheat. These are just estimates, however.
The Defense Protection Act will be used to provide financial support to packing plants as well as add legal protection. Workers will not be made to go back to work. Both Tuesday and Wednesday saw cattle slaughter at 72,000 head. yesterday’s estimate was 80,000. For hogs, Wednesday’s estimate revised down to 266,000. Today’s estimate was pegged at 288,000.
Pork sales continued strong this week at 50,341 metric tonnes. China was quite active this week at 35,138 tonnes. China now has 424,301 total purchases for the year. Our total sales to all countries total 1,044,44 tonnes. That is 58% over last year. Beef sales were low at 9,388 metric tonnes. For US sales to all countries the number comes to 153,898 tonnes. This is 8% over last year.
Steer weights this week grew by 3 lbs. to an 889 lb. carcass. Heifer weights fell 3 lbs. to 823. On a year/year basis steers grew from +2.5% to now +3.7%. Heifer weights were unchanged at +3.0%. The average market hog, barrow/gilt, rose by 1 lb. to a 213 lb. carcass. That was unchanged with the prior week’s year/year comparison and considered neutral.
Dressed beef values were higher with choice up 10.18 and select up 10.25. The Feeder cattle index is 118.74. Pork cut-out values were up 9.99.
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