Good Morning from Allendale, Inc. with the early morning commentary for February 28, 2020.
Grain markets are lower as traders look to see if end of week, end of month can bring some position evening as we look to March amid the ongoing health scare. Outside market influence should also be considered as markets across the globe have been hammered this week.
China’s National Health Commission reported 327 new confirmed cases and 44 additional deaths as of Feb. 27. South Korea confirmed an additional 256 new coronavirus cases, bringing the country’s total to 2,022. (CNBC)
The big surprise in export sales this week came in the form of 444,519 tonnes of sorghum sold. That is the fifth best week of all time. China purchased 119,000 tonnes of that. Unknown, which we assume was China, purchased 324,000 tonnes.
Corn export sales of 978,225 metric tonnes were also noted, within the 800,000 – 1,300,000 trade expectation. Soybean export sales of 361,429 metric tonnes were reported, under the 600,000 – 900,000 trade expectation. Wheat export sales of 449,899 metric tonnes were within the 400,000 – 600,000 trade expectation.
The Buenos Aires Grains Exchange estimates Argentina’s 2019/20 soybean crop at 54.5 million tonnes, up from their previous estimate of 53.1 million tonnes. They point to good rains this season for the increase. For their part, USDA is at 53.0 million tonnes.
Farm Futures estimates U.S. corn acres at 96.6 million in 2020 a 7.7% increase vs. last year. Soybean acres are estimated at 80.6 million according to data from a producer survey. USDA is currently at 94.0 million corn acres and 85.0 million soybeans. Allendale’s own producer survey starts this Monday! We’re looking forward to talking to you about your acreage!
The International Grains Council raised their estimate for world wheat production to 769 million tonnes for the 2020/21 season, a new record. An expected planting increase was cited for the higher production.
Australia’s Bureau of Meteorology said there is a 70% chance of above average rains between March 1 and May 30 over much of Western and Southern Australia, which are important wheat regions. This is seen as boosting the country’s wheat prospects if the weather plays out as forecast.
CME Group will increase the daily trading limits for lean hog futures in April due to heightened volatility linked to the outbreak of African Swine Fever in China. They plan to adjust them annually after this year.
The weekly pork export sales report was the first one which could have shown some type of Chinese phase one buying. Of the 38,922 tonnes which were reported, 7,223 were to China. The Toal weekly number was 36% over last year in the same week. Year to date sales are still great at 101% over last year. Weekly beef export sales of 13,911 also reported, the lowest sale of the year.
Actual Slaughter report showed whole-US hog weights from two weeks ago falling down to unchanged vs. last year. On the cattle side, steer weights increased by 2 lbs. to 905 and heifer weights decreased by 1 lb. to 833 from 2/8 to 2/15. We normally have falling weights at this time so an increase is noteworthy.