Good Morning from Allendale, Inc. with the early morning commentary for August 14, 2020.
Grain markets are mixed as traders discuss U.S. acreage in light of this week’s storms and FSA data release. As has been the case in recent weeks, trade will watch the 8:00 AM time-frame for more overnight export sales announcements.
NOPA Crush is expected to show U.S. soybean crushings at 172.015 million bushels in the month of July. This would be above June’s 167.263 MB, and last July’s 168.093 million bushels.
Corn export sales during this period totaled 930,332 metric tonnes, 377,188 old and 553,144 new crop. This was within the 400,000 – 1,400,000 trade expectation. Soybean export sales during this period totaled 3,409,502 metric tonnes, 570,114 for old and 2,839,388 for new. Before this week’s rally, US soybeans were as much as $30 per tonne cheaper than Brazil. Today’s 367,850 is the lowest for this specific week in six years.
China was a buyer of 76,478 tonnes of old crop this week. Their old and new purchases from 2/13 total 7.871 million tonnes listed as China, another 1.246 listed as Unknown. For soybeans, China bought 420,511 for old and 1,705,000 new. Sales since 2/13 for old and new + overnight sales come to 16.605 million tonnes for China and 7.497 for Unknown. In wheat, China was responsible for 3,000 tonnes. Chinese buying since 2/13 totals 1.484 million tonnes, completed old crop + current crop.
Strategie Grains cut its estimate for EU and British wheat again this month to now 128.0 million tonnes. Last year totaled 147.2 million tonnes.
Dryness in Argentina’s wheat region continues to be monitored, with acreage estimates being trimmed a little more by the Rosario Grains Exchange. The wheat estimated to be planted in fair to poor condition continues to grow.
Two cities in China have found traces of the new coronavirus in cargoes of imported frozen food, local authorities said on Thursday, although the World Health Organization downplayed the risk of the virus entering the food chain. (Reuters)
Retail sales will be released this morning at 7:30 AM CDT along with a few other productivity reports. University of Michigan Consumer Sentiment will be out at 9:00 AM.
From our understanding, National Beef’s Tama, Iowa plant will be down for one week as they update facilities for COVID-19. This plant’s 1,100 head capacity may not impact the market, however.
Beef export sales last week ran 11,599 metric tonnes. This is the lowest in five weeks. It was 28% under last year. Pork export sales last week ran 10,481 metric tonnes. China cancelled 8,798 metric tonnes this week. That was the first cancellation from them in 12 weeks.
USDA’s monthly supply/demand report didn’t change too much for pork. They reduced 179 million lbs. from the 2020 production forecast at 28.357 billion lbs. For Q4 they have production 0.4% under last year. This will be a controversial point given the fact the issue is slaughter capacity and not number of hogs.
Dressed beef values were higher with choice up 1.86 and select up 1.42. The Feeder cattle index is 142.62. Pork cut-out values were up 1.32.