Good Morning from Allendale, Inc. with the early morning commentary for February 18, 2020.
Grain markets are finding support as the cases of coronavirus has declined over the weekend, Australia announced their wheat harvest is the smallest in over a decade and Brazilian truck drivers started protesting at one of the largest ports in Santos, affecting unloading shipments and arrivals. This week will be closely watched for any signs of China purchasing any U.S. products.
NOPA soybean crush report (for January) will be released today, trade is looking for crush at 173.75 million bushels (174.8 mb last month and 171.6 mb last year). Oil stocks are expected to rise 25 mil lbs. over last month to 1.782 billion lbs. (1.549 billion lbs. last year).
Last week, March corn futures were down 5.75 cents, March soybeans up 11.75 cents, March wheat down 16 cents, March soymeal was up $1.80 and March soyoil was down 40 points.
The coronavirus, which has killed over 1,700 people in mainland China and one of 60 patients in Hong Kong, has plummeted tourist arrivals and kept residents away from major retail areas. Retail sales are expected to post their steepest drop on record for January (down around 30%). Tourist arrivals in Hong Kong in February fell to below an average of 3,000 per day (100,000/day last month and over 200,000/day last year at this time).
CFTC Commitments of Traders showed funds new net position short -72,084 corn contracts, short -92,172 soybean contracts, long +45,940 wheat contracts, long +36,962 live cattle contracts and long +9,308 lean hog contracts.
Brazilian soybean production this year is expected to reach a record of 125.6 million tonnes (123.9 million tonnes last month), AgRural said, with over a fifth of the planted area harvested. Brazil has harvested 21% of their total soybean area this season (36% complete last year at this time and in line with five-year average). Abiove increased Brazil’s 2020 soybean crop 0.9 million metric tonnes to 123.7 million mt.
Australia said this year’s wheat harvest was the lowest in 12 years, as a severe drought across the east coast wilted crops. With harvest complete, the ABARES said production totaled 15.17 million tonnes (the lowest since 2008).
China has approved the import of all poultry products from the U.S., the Ministry of Ag and Rural Affairs said. The new announcement would also allow for the import of live birds, said Li Jinghui of the China Poultry Association, benefiting companies like Aviagen and Cobb-Vantress, Inc., both based in the U.S.
Weekly cattle slaughter fell to 620,000 head (624,000 estimated). This was the smallest non-holiday kill of the year. This run was 2.1% over last year and moderately under the +3.3% pace from the previous six weeks.
Dressed beef values were higher with choice up 1.64 and select up 1.92. Feeder cattle index price was at 140.60. Pork cut-out values were down 0.35.