Good Morning from Allendale, Inc. with the early morning commentary for April 20, 2020.
Grain Markets are mixed with wheat futures sharply higher on expectations of higher demand for U.S. wheat as Russia suspended their wheat exports. Corn and soybean futures slid lower as energy futures dropped on expectations of lower demand and favorable weather in main growing areas looks to help farmers get an early start on this year’s planting season.
Last week, July corn futures were down 7 cents, July soybeans were down 29.5 cents, July wheat down 22.25 cents, July soymeal was down $5.30 and July soyoil was down 113 points.
Democrats and Republicans are near agreement on extra money to help small businesses hurt by the coronavirus pandemic and could seal a deal as early as Monday, President Trump said. “A lot of good work has been going on. We could have an answer tomorrow,” the president added.
President Trump announced a $19 billion relief program to help U.S. farmers cope with the impact of the coronavirus, including $16 billion in direct payments to producers and mass purchases of meat, dairy, vegetables and other products. The U.S. Ag Department is partnering with regional and local distributors to purchase $3 billion in farm goods to distribute to food banks, churches and aid groups to help the millions of unemployed Americans.
Senator John Hoeven (N.D.) said the program will provide $9.6 billion in direct aid to livestock producers, $3.9 billion for commodity crop producers, $2.1 billion for fruit-and-vegetable growers and another $500 million for farmers who grow various niche products. No relief is expected for the ethanol industry at this time.
USDA Weekly Crop Progress Report will be released this afternoon at 2 p.m. CST. Trade is expecting corn planting at 7-8% complete (3% last week, 9% average). Soybean planting expected at 1% complete (1% last year, 1% average).
CFTC Commitments of Traders showed funds new net position short -137,571 corn contracts, long +12,522 soybean contracts, long +25,381 wheat contracts, long +2,364 live cattle contracts and long +18,627 lean hog contracts.
USDA reported wheat export sales of 220,000 metric tons of grade 1 milling wheat to Taiwan. As of April 9th, Taiwan has 1.292 million tons of U.S. wheat on the books (1.107 million tons last year at this time). There was also 120,000 tons of U.S. soybeans to unknown.
Russia will suspend grain exports until July 1 once its export quota is exhausted, which is currently expected to happen in mid-May, said deputy ag minister, Oksana Lut. There are no plans to increase the second-quarter quota, and the ag ministry could keep the grain export quota mechanism in the new marketing season, which starts on July 1st, Lut added.
Dressed beef values were higher with choice up 3.12 and select up 1.22. The Feeder cattle index is 115.75. Pork cut-out values were up 4.27.