Good Morning from Allendale, Inc. with the early morning commentary for April 29, 2020.
Grain Markets were slightly higher overnight with corn and soybean futures positive as traders expect an increase in livestock feed demand as meat-processing plants begin to re-open. Wheat futures pulled back on higher expectations for global supplies.
President Trump ordered meat-processing plants to stay open to protect the food supply in the U.S., despite concerns about coronavirus outbreaks, drawing a backlash from unions that said at-risk workers required more protection. With concerns about food shortages and supply chain disruptions, President Trump issued an executive order using the Defense Production Act to mandate that the plants continue to function.
U.S. coronavirus death toll climbed above 58,000 yesterday, surpassing the loss of American life from the Vietnam War. One senior White House economic adviser, Kevin Hassett, said the nation faces the “the biggest shock since the Great Depression” but also predicted a strong rebound in the fourth quarter as the coronavirus fades.
Weather forecast maps still show active rains through Illinois and Eastern states in the 1 – 5 day, with slightly reduced rains in the 6–10 day maps yesterday afternoon, yet still light amounts for the same area.
U.S. refiners are expected to report poor first-quarter results starting this week, as investors remain more concerned about the outlook for coming months as various states ease movement restrictions designed to curb coronavirus infections. Fuel demand has dropped by 25% in the U.S. and 30% worldwide since the start of the pandemic. U.S. refineries have throttled back production at roughly two-thirds of capacity and global refineries have responded similarly to battle the steep drop in auto and jet fuel use.
Argentine farmers have suspended soybean and corn harvesting in the country’s central grain belt areas due to heavy rains, while the extra moisture was expected to help wheat planting scheduled to start in May, growers and analysts said. Harvesting had benefited from a month of sunny weather that allowed farmers to bring in more than half of this year’s soybean crop and a third of the season’s corn crop before unusually harsh storms started pelting the Pampas grains belt last weekend.
Egypt said it had bought 578,000 tonnes of wheat from its local harvest since the start of the buying season on April 15. Egypt’s government has said it is looking to buy around 3.6 million tonnes of local wheat this season.
The pork industry is still talking of 3–6 million piglet euthanasians. This will impact the October/November supply market. The producer problem is with a home for finished hogs not piglets, but piglets are easier for disposal.
Cattle trades have been limited this week and noted around $150 dressed. Last week’s average dressed price was $154.31.
Dressed beef values were higher with choice up 18.98 and select up 22.10. The Feeder cattle index is 118.69. Pork cut-out values were up 4.78.