U.S. – China Trade Concerns Intensify Over Coronavirus

Good Morning from Allendale, Inc. with the early morning commentary for May 4, 2020.

Grain Markets pulled back as the U.S.-China trade dispute heats up as both sides debate who is to blame for the spread of the Coronavirus pandemic and increasing fears of lower domestic grain demand.  Traders will continue to monitor the spread of the virus as well as any improvements in the U.S.-China trade dispute.

Last week, July corn futures were down 5.00 cents, July soybeans were up 9.50 cents, July wheat down 15.00 cents, July soymeal was down $0.40 and July soyoil was up 101 points.

USDA Weekly Crop Progress Report will be released this afternoon at 3p.m. CST.  Trade is expecting corn planting at 45-48% complete (27% last week, 21% last year, 39% average).  Soybean planting expected at 16-18% complete (8% last week, 5% last year, 10% average).  Hard red Spring wheat planting expected at 22–25% complete (14% last week, 22% last year, 54% average).  

CFTC Commitments of Traders showed funds new net position short -160,975 corn contracts, long +4,392 soybean contracts, long +15,975 wheat contracts, short -7,964 soymeal contracts and short -11,906 soyoil contracts.

Global coronavirus cases surpassed 3.5 million with deaths nearing 250,000, although the rate of fatalities and new cases has slowed from peaks reached last month.  North America and European countries accounted for most of the new cases reported in recent days, but numbers were rising from smaller bases in Latin America, Africa and Russia.  (Reuters)

Secretary of State Mike Pompeo said there was “a significant amount of evidence” that the new coronavirus emerged from a Chinese laboratory but did not dispute U.S. intelligence agencies’ conclusion that it was not man-made.

March soybean crush was seen at 192.2 million bushels (estimated at 191.5 million bushels, 179.4 mb last year).  This is a new monthly record after beating last month’s crush.  YTD crush at 1.265 billion bushels (2% over last year) and needs 860 million bushels between April to August to reach the USDA’s 2.125 billion bushels projection.

Kroger supermarkets said it has put purchase limits on ground beef and fresh pork at some of its stores following growing concerns over meat shortages.  “There is plenty of protein in the supply chain. However, some processors are experiencing challenges,” a Kroger spokesperson said.

In Canada’s fight against Coronavirus, public health officials are mostly leaving decisions on closing meat plants to the companies, even though the authorities have power to do so.  The impact of such decisions extends beyond plant walls.  At least eight Canadian meat plants have closed temporarily due to the pandemic. 821 Cargill workers at High River (37% of the workforce) were infected, including one death.  The JBS beef plant in Brooks, Alberta slowed production but remains open after 276 infections and one death.

Dressed beef values were higher with choice up 9.89 and select up 6.97.  The Feeder cattle index is 119.39.  Pork cut-out values were up 5.89.

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