Volatility Could Continue

Good Morning from Allendale, Inc. with the early morning commentary for October 30, 2020.

Grain Markets were mixed overnight as the week and month come to a close. Volatility could remain a feature as funds shift money ahead of the new month, next week’s U.S. presidential election, and spiking COVID-19 cases which have prompted new lockdowns across the world.

Daylight Savings Time will end this Sunday morning at 2:00 AM local time. Remember to set your clocks back one hour for Sunday night’s trade.

Corn export sales of 2,243,739 metric tonnes were reported in the weekly report. This was over the 700,000 – 1,500,000 trade expectation. Soybean sales of 1,629,694 metric tonnes, all but 9,000 for the 2020/21 marketing year were within the 1,000,000 – 2,000,000 trade expectation. Wheat export sales of 803,1765 metric tonnes were reported, all but 60,000 for the 2020/21 marketing year. This was over the 200,000 – 700,000 trade expectation.

The International Grains Council lowered its world corn production estimate down from 1.160 billion tonnes to 1.154. World wheat production was lowered down from 795 million tonnes to 794.

Brazil’s economy minister, Paulo Guedes, indicated if domestic rice and soybean prices rise then import tariffs would fall to zero. Separately, Brazil’s president stated the country is, “importing soy now because the price is going up,” according to a social media post.

The Buenos Aires grains exchange said recent rainfall in Argentina has helped reduce losses to the current wheat crop which has been hit hard by dry weather.

Weekly ethanol production was reported at -6.1% year/year. That is over USDA’s current whole-year goal of -6.5%. It must be noted that the -13.6% implied gasoline demand is still a problem.

From Wednesday of last week to Tuesday this week, traders estimate funds were net buyers of 26,500 corn contracts, 17,000 soybeans, and net sellers of 11,000 wheat contracts. CFTC’s Commitments of Traders report will give the official data this afternoon.

Weekly beef export sales last week totaled 18,853 tonnes. This was 20% over last year. Year to date sales, 838,038 tonnes, are 5.1% over last year. Pork export sales were noted at 28,971 tonnes. This covers sales from Oct 16 – 22. This was 4% under last year. Year to date sales, 1,850,399 tonnes, are 19% over last year.

Dressed barrow/gilt weights increased by 1 lb. to now 214 lbs. This is for the week ended 10/17. On a year/year basis there was no change in the +1.9% from the prior week. Steer carcasses increased by 1 lb. in the latest week to now 929 lbs. Heifer carcasses grew by 4 lbs.

Dressed beef values were higher with choice up 1.53 and select up 1.65.  The Feeder cattle index is 134.34.  Pork cut-out values were up 3.05.

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