Good Morning from Allendale, Inc. with the early morning commentary for October 5, 2020.
Grain Markets traded lower overnight after large price gains last week on strong export sales and fund buying after a surprise corn and soybean stock cut by the USDA. Trade will continue to watch harvest progress and South American weather as they prepare for Friday morning’s USDA October WASDE report.
Last week, December corn futures were up 14.25 cents, November soybeans were up 12.50 cents, December wheat up 29.00 cents, December soymeal was up $119.00 and December soyoil was down 119 points.
USDA Weekly Crop Progress Report will be released this afternoon at 3 p.m. CDT. Trade is expecting corn harvest at 22-24% complete (15% last week, 24% average). Soybean harvest expected at 33% complete (20% last week, 28% average). Hard red winter wheat planting is expected to be at 48-50% complete (35% complete last week, 58% average).
CFTC Commitments of Traders report showed funds new net position long +106,820 corn contracts, long +229,043 soybean contracts, long +12,424 wheat contracts, long +62,924 live cattle contracts and long +40,807 lean hog contracts.
Private exporters reported export sales on Friday to the USDA of 264,000 metric tons of soybeans to China during this marketing year. They also reported 252,000 metric tons of soybeans to Unknown during this marketing year as well.
USDA will release details of U.S. August ag commodity shipments to China tomorrow morning.
Stone X adjusted corn yield estimates to 179 bpa (+0.5 bpa over USDA September report) while soybeans at 52.4 bpa (+0.5 BPA over USDA September report). Informa shows corn yields at 177.8 bpa (-0.7 below USDA September report) with soybeans at 51.9 bpa (same as September USDA report). Both StoneX and Informa trimmed October corn and soybean yields versus their September forecasts.
U.S. pork sales to China have been disappointing in the previous two weeks. Despite the fact Germany’s African Swine Fever announcement has been known since September 10. Last week’s pork export sales report (covering Sep 18 – 24), showed only 6,549 tonnes of buying from China. This was the worst sales in six weeks.
Live cattle futures traded in a tight range last week despite confirmed trades of $107 and $167 in Nebraska and $108 in Eastern Iowa. Trade is still waiting for the South to move to higher prices. Current bids are at $105 in the South and $107/$168 in the North.
Dressed beef values were lower with choice down 0.10 and select down 0.01. The Feeder cattle index is 142.96. Pork cut-out values were down 3.50.