USDA Drops Grain Stocks on Lower Supplies & Strong Demand

Good Morning from Allendale, Inc. with the early morning commentary for October 12, 2020.

Grain Markets continued pushing higher overnight as soybean futures edged towards a two-year peak hit in the previous session as the USDA estimated U.S. corn and soybean supplies to be smaller than previously forecasted as adverse weather reduced harvested acres.

Last week, December corn futures were up 14.75 cents, November soybeans were up 44.75 cents, December wheat up 19.00 cents, December soymeal was up $12.10 and December soyoil was up 239 points.

USDA Weekly Crop Progress Report will be released this afternoon at 3 p.m. CDT.  Trade is expecting corn harvest at 32-33% complete (25% last week, 32% average). Soybean harvest expected at 50-51% complete (38% last week, 42% average).

USDA October Supply and Demand report showed U.S. corn ending stocks at 2.167 billion bushels (estimated at 2.102 bb, 2.503 bb last report, 1.995 bb last year), U.S. soybean ending stocks at 290 million bushels (estimated 352 mb, 460 mb last report, 523 mb last year), and U.S. wheat ending stocks at 883 million bushels (estimated 887 mb, 925 mb last report, 1.028 bb last year).

USDA World Crop Ending Stocks showed world corn ending stocks at 300.50 million tonnes (estimated 300.20 mt, 306.80 mt last report, 304.2 mt last year), world soybean ending stocks at 88.70 million tonnes (estimated 91.10 mt, 93.60 mt last report, 93.8 mt last year), and world wheat ending stocks at 321.50 million tonnes (estimated 316.60 mt, 319.40 mt last report, 299.40 mt last year).

CFTC Commitments of Traders report showed funds new net position long +134,466 corn contracts, long +238,394 soybean contracts, long +30,336 wheat contracts, long +59,016 live cattle contracts and long +35,674 lean hog contracts.

Private exporters reported no export sales or cancellations on Friday to the USDA.

Cash cattle trade was active last week with trades of $108 and $109. October live cattle futures closed up $1.97 last week while December live cattle futures was up $1.80.

USDA’s monthly supply/demand report was seen as slightly negative for pork. The USDA removed 80 million lbs. from their 2020 production estimate, 60 million lbs. out of 4th quarter of 2020 production (Q4 total production of 7.360 billion lbs., 1.6% under last year).

Dressed beef values were lower with choice down 1.94 and select down 3.28.  The Feeder cattle index is 141.92.  Pork cut-out values were down 0.56.

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