Traders Look to Overnight Export Sales

Good Morning from Allendale, Inc. with the early morning commentary for September 4, 2020.

Grain Markets are mixed as traders look to the long holiday weekendAs has become typical, overnight export sales will be watched with interest this morning for signs of continued Chinese demand. Remember, markets will close at their normal time today, but will not reopen until Monday evening for the Labor Day holiday.

Allendale’s Nationwide Producer Survey estimates U.S. corn yield at 178.28 bpa and production at 14.980 billion bushels. Soybean yield is estimated at 51.93 bpa and production at 4.311 billion bushels. If you missed it, you can view the recording of the results webinar here.

Weekly corn export sales were reported at 2,484,883 metric tonnes, 95,759 old and 2,389,124 new crop, within the 1,450,000 – 2,600,000 trade expectation. Soybean export sales during this period totaled 1,850,927 metric tonnes, 88,131 for old and 1,762,776 for new, also within the 1,000,000 – 1,900,000 trade expectation. Wheat was reported at 585,427 sale was all current crop and no new, within the 350,000 – 600,000 trade expectation.

China was a buyer of 72,143 tonnes of old crop and 1,155,000 new crop. Their old and new purchases from 2/13 total 10.580 million tonnes listed as China and another 2.481 listed as Unknown. In soybeans, China purchased 83,347 for old and 1,010,000 new. Sales since 2/13 for old and new + overnight sales come to 17.648 million tonnes for China and 8.538 for Unknown. In wheat, China was responsible for 250,766 tonnes of the week’s sales. Chinese buying since 2/13 totals 2.023 million tonnes, completed old crop + current crop. There are 803,700 tonnes in new crop sales.

Cold weather is on the radar for World Weather, Inc. “In general, most of the Corn Belt is not likely to experience much damage, but the situation needs to be closely monitored due to the potential for additional changes in the expected intensity and breadth of the cold airmass.”

Celeres estimates Brazil’s soybean crop at 131.4 million tonnes, an increase from last months 130.8 million tonnes. They left the country’s first crop corn unchanged at 30 million tonnes.

The Buenos Aires Grains Exchange said that rains this week have helped some of Argentina’s wheat crop, but that some lasting damage was still expected due to months of very dry weather.

The monthly employment report will be out this morning at 7:30 AM CDT. The trade expects to see July employment up 1.4 million head. The prior month showed a 1.763 gain. The unemployment rate is seen falling from 10.2% to 9.8%.

Cash cattle traded down to $102 yesterday. This would be $3 under last week’s $105 average. Cash continues to distance itself from the $106/$107 mini-peak from two weeks ago. Futures posted the lowest close since July 27.

Beef export sales last week ran 11,354 metric tonnes. This was the lowest in eight weeks. It was 37% under last year. Pork export sales last week ran 53,646 metric tonnes. This was 204% over last year. It was the largest sale of the year. China purchased 28,712 metric tonnes last week. This was their biggest sale since April.

Actual Slaughter reported steer weights at 910 lbs. dressed out, +1 lb. from the prior week. Heifer weights were unchanged from the prior week at 833. Market hog weights were unchanged from the prior week at 211 lbs. Our focus, the year over year change, did not move at +1.5%.

October hogs left another downside gap from 56.92 – 57.17. The December left a 5 cent gap.

Dressed beef values were lower with choice down 0.34 and select down 1.32.  The Feeder cattle index is 139.68.  Pork cut-out values were up 6.68.

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