US & Chinese Tensions Back in Focus May 22, 2020

Good Morning from Allendale, Inc. with the early morning commentary for May 22, 2020.

Grain Markets continue to monitor the latest in renewed tensions between the U.S. and China while keeping an eye on world weather forecasts. Volume may be a bit lighter today, and some position evening is probable as the three-day weekend approaches. As a reminder, markets will close at their normal time today, but will remain closed until Monday night’s trade due to the Memorial Day holiday as we remember those who gave all.

The Kansas Wheat Tour wrapped up yesterday and estimated an average wheat yield of 44.5 bushels per acre for the state of Kansas. Production was pegged at 284.4 million bushels which compares with USDA’s 305.5 million of a 47.0 bpa.

Weekly corn export sales totaled 854,803 metric tonnes, 884,162 for old and a net cancellation of 29,359 for new crop. Soybean export sales during this period totaled 1,669,008 metric tonnes, 1,205,008 for old and 464,000 for new. This week’s old crop sale was the best for this specific week in history. Wheat export sales during this period totaled 428,127 metric tonnes, 175,815 for old and 252,372 for new. The corn and wheat numbers were within the range of analyst estimates, while the soybean numbers were a bit above.

NOAA’s latest three month outlook for the months of June through August were updated and look to show mostly warm and wet conditions for the majority of the U.S. growing region.

IKAR lowered its estimate of Russia’s 2020 wheat crop to 76.2 million tonnes from 77.2 million tonne on poor weather. You may remember just Wednesday Russia’s ag ministry cut its forecast for the 2020 grain harvest to 120 million tonnes.

Treasury Secretary Steven Mnuchin on Thursday said there is a “strong likelihood” that another coronavirus relief bill will be needed as more states start to reopen and the economy struggles to stabilize. (The Hill)

Actual Slaughter reported Steer carcass weights rose 3 lbs. in this week to 896 lbs. Heifer carcasses rose 3 lbs. to 829. Compared with last year steers are now 5.2% over last year. Heifer carcasses are now 4.4% over last year. The average hog carcass in this week rose 2 lbs. to 216 lbs. This is now 1.9% over last year.

Weekly beef export sales were reported at 4,018 tonnes. Year to date export sales, 440,131 metric tonnes, are now 5% under last year. Pork export sales saw a net cancellation of 5,777 tonnes. Chinese buyers were net cancelling 12,561 metric tonnes.

Cold Storage reported 614.811 million lbs. of pork at the end of April. We expected 604.588. USDA’s number represents 2 million lb. draw-down. The norm for April is a 27 million increase. Beef stocks were at 489.999 million lbs. We expected 469.277. This represented a 12 million lb. decline from March. This was not far from a normal change of -2 in April.

Cattle on Feed will be released today at 2:00 P.M.  Allendale sees feedlot placements at 13.3% under last year. This is after seeing -22.7% under last year in March and -7.6% year/year in February.  With packers still down last month, Allendale estimates marketings at 15.3% under last year and May 1 Cattle on Feed at 4.9% under last year.

Dressed beef values were lower with choice down 2.23 and select down 8.65.  The Feeder cattle index is 126.60.  Pork cut-out values were down 2.07.

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Allendale, Inc.
4506 Prime Parkway McHenry, IL 60050

1.800.2MARKET | 1.800.551.4626
Local: 815.578.6150 | Fax: 815.363.5511

service@allendale-inc.com

©2019 Allendale, Inc.
This communication is intended as a solicitation for business in the U.S. Please see our full disclaimer.
Site designed and developed by Turnkey Digital.