USDA Keeps Stocks Unchanged

Good Morning from Allendale, Inc. with the early morning commentary for March 11, 2020.

Grain markets are mixed as traders gain confidence countries will provide economic assistance to industries who have been battling the coronavirus outbreak.  Markets will continue to watch for additional export sales from China as well as the containment of the virus outbreak.

Allendale Annual Acreage Survey has begun and will end later next week with results released before the USDA’s prospective plantings report. To help make our report as accurate as possible, we could use your numbers. Please take a moment to tell us your planting intentions, and register for the free results webinar too. Thank you!

Chinese President Xi Jinping made his first visit to Wuhan since the coronavirus outbreak forced an unprecedented lockdown of the city of 11 million people, in a sign that authorities’ efforts to control the virus are working.  “He is there now to reap the harvest. His being there means the CCP (Chinese Communist Party) may declare victory against the virus soon,” said Zhang Ming, professor at Renmin University in China.

March’s USDA Supply and Demand report showed 2019/20 corn ending stocks unchanged at 1.892 billion bushels (expected 1.888 billion bushels, 1.892 bb last month), soybeans at 425 million bushels (expected 435 million bushels, 425 mb last month), and wheat stocks at 940 million bushels (expected 944 mb, 940 mb last month).

World ending stock numbers showed corn stocks at 297.3 million tonnes, soybeans at 102.4 million tonnes, and wheat at 287.1 million tonnes.

USDA confirmed a relatively modest sale of U.S. soybeans with private exporters selling 123,000 tonnes of soybeans to unknown destinations.

Chinese farmers are shopping online for needed supplies as the spring planting season gets under way as the coronavirus outbreak disrupts traditional supply chains, providing a huge boost to business for e-commerce platforms.  “In every link along the food and ag supply chain, digital apps will likely be increasingly adopted and improved,” said Michelle Huang, Rabobank consumer food analyst.  “The lessons learned from this virus outbreak indicate that supply chain management will become more important.”  (Reuters)

Argentina rainfalls are expected over the next few days and will bring relief to soybean and corn crops in the country’s central ag regions, where both crops have been hit by high temperatures and dry conditions.  Recent heat waves have hurt yields of late-seeded soybeans and corn, which are both still in key stages of development.

USDA raised their 2020 beef production estimate by 220 million over the February report.  At a total of 27.700 billion lbs. they now see a 2.0% increase over 2019. This would be a record production.

Pork production in 2020 was raised by 100 million lbs. to 28.995 billion by the USDA (4.9% over last year). USDA commented that this change came from higher than forecast Q1 slaughter rates.  Pork exports were raised by 375 million to 7.750 billion (23% over last year).

Dressed beef values were lower with choice down 0.27 and select down 3.61.  The Feeder cattle index was at 133.26.  Pork cut-out values were up 0.01.

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