Good Morning from Allendale, Inc. with the early morning commentary for May 11, 2020.
Grain Markets surged higher with soybean futures leading the way as traders hope grew for additional Chinese ag purchases as they continue to fulfill the commitments agreed to in the phase one agreement. Frost and freezing concerns over the weekend also helped increase grain prices as well.
Last week, July corn futures were up 1.50 cents, July soybeans were up 1.00 cent, July wheat up 6.50 cents, July soymeal was down $1.60 and July soyoil was up 2 points.
USDA Weekly Crop Progress Report will be released this afternoon at 3 p.m. CST. Trade is expecting corn planting at 70-72% complete (51% last week, 28% last year, 56% average). Soybean planting expected at 38-40% complete (23% last week, 8% last year, 23% average). Hard red Spring wheat planting expected at 50–55% complete (29% last week, 22% last year, 70% average).
CFTC Commitments of Traders showed funds new net position short -190,152 corn contracts, long +8,908 soybean contracts, long +3,840 wheat contracts, short -11,700 soymeal contracts and short -6,754 soyoil contracts.
Reuters released its poll of average analyst estimates for tomorrow’s USDA Supply and Demand report at 11 a.m. CDT. They expect to see 2020/21 corn ending stocks at 3,389 million bushels, soybeans 430 MB, and wheat 814 MB. 2019/20 ending stocks are estimated at 2,224 MB for corn, 488 MB for soybeans, and 969 MB for wheat.
The U.S. CDC reported 1,300,696 cases of coronavirus (an increase of 26,660 cases from its previous count a day earlier) and said the number of deaths had risen by 1,737 to a total of 78,771. The CDC report is based on May 9th at 3 p.m. CDT.
President Trump said the U.S. would buy $3 billion worth of dairy, meat and produce from farmers as unemployment soars and the prices that slaughterhouses pay farmers for animals have fallen due to the coronavirus. “Starting early next week, at my order, the USA will be purchasing, from our Farmers, Ranchers & Specialty Crop Growers, 3 Billion Dollars worth of Dairy, Meat & Produce for Food Lines & Kitchens,” Trump tweeted over the weekend.
Australia raised concerns China is considering imposing hefty tariffs on imports of Australian barley, as tensions rise between the two economies. The Chinese tariff threat comes as ties have been damaged between Australia and China, intensified by a push by Australia for an investigation into the origins of the coronavirus outbreak.
The Trump administration has offered to place a $10 million cap on Philadelphia Energy Solutions’ biofuel blending obligations, effectively slashing the bankrupt refiner’s regulatory liabilities by more than 70%, according to a proposed settlement between the two parties planned early this week. The deal is intended to free up more cash for the company to pay off its list of creditors, according to the filing.
The largest U.S. meatpacking workers union said it opposed the reopening of plants as the Trump administration had failed to guarantee workers’ safety. At least 30 meatpacking workers have died of the novel coronavirus and more than 10,000 have contracted it, the United Food and Commercial Workers International Union (UFCW), which represents more than 250,000 meatpacking and food processing workers, said in a statement. (Reuters)
Dressed beef values were higher with choice up 2.34 and select up 0.42. The Feeder cattle index is 121.14. Pork cut-out values were down 0.24.