Good Morning from Allendale, Inc. with the early morning commentary for November 6, 2020.
Grain Markets worked higher overnight as South American weather, strong export data, and USDA report estimates hit the market. Will funds continue to pour into ag markets today or take profits ahead of the weekend with the U.S. election still unknown?
Average estimates for next week’s Supply and Demand report have U.S. corn ending stocks at 2.033 billion bushels on production of 14.659 bb, using a 177.7 bpa yield. Soybean ending stocks are estimated at 0.235 bb on production of 4.251 bb, using at 51.6 yield. Wheat ending stocks are expected at 0.881 billion bushels.
USDA’s attache to China stated, “China’s Corn Imports Estimated to Hit 22 Million Metric Tonnes”. That would be way up from USDA’s current estimate of 7 mt.
Abiove estimates Brazil’s 2021 soybean exports at 83.5 million tonnes, an increase from their previous estimate of 82 million.
Corn export sales were reported at 3,151,862 metric tonnes in the weekly report. This was well over the 1,800,000 – 2,500,000 trade expectation. Soybean sales were expected between 800,000 – 1,700,000 tonnes and were reported at of 1,530,522 metric tonnes. Wheat sales of 597,088 metric tonnes were reported, over the 200,000 – 700,000 trade expectation.
USDA is expected to release select commodity tables for their Agricultural Projections to 2030 at 2:00 PM CST today. The tables will contain long-term supply, use, and price projections to 2030 for major U.S. crops and livestock.
Nonfarm payrolls and Unemployment Rate are set to be released this morning at 7:30 AM CST. It will be joined later by Consumer Credit at 2:00 PM.
CME released initial margin amounts for the new pork cutout future contract. The dollar amount to hold 1 front month contract for speculators will be $2,950, while speculators will pay $3,245 per contract. The new contract is slated to begin trading Monday.
Cash cattle traded at $107 yesterday. A few $106’s were sold earlier. Dressed action was noted at $167.
Beef export sales last week totaled 20,357 tonnes. Year to date sales, 858,395 tonnes, are now 6.3% over last year. Pork sales were reported at 42,194 tonnes. This was the lowest in four weeks. Year to date sales, 1,892,593 tonnes, are 20% over last year.
Europe is dealing with a highly contagious strain of bird flu prompting The Netherlands to order the culling of 200,000 chickens. Britain ordered the culling of 13,000 chickens, while France put its farmers on high alert.
Dressed beef values were higher with choice up 2.36 and select up 1.92. The Feeder cattle index is 137.91. Pork cut-out values were up 3.97.