Tag Archives: corn

No markets today in the US in observation of Martin Luther King Jr. Day. Catch up on last week’s trade below.

Summary

Friday’s close was a stark difference to Thursday. Corn erased  Thursday’s losses. Wheat and soybeans look to add gains for the week.

The commodity markets started the week with optimism. Wheat was a leader to the top side in the grains. Russia’s ag minister announced early in the week that Russia would put a 20MMT quota on wheat exports through June 30, 2020. That is about 5 MMT lower than what Russia exported in the last six months of 2019. The Black Sea Region is also experiencing high temps and little rainfall. Helping to set up a possible global wheat supply story. With wheat higher corn also gradually made it’s way higher. Soybeans lagged of all three grains and seemed to be the possible sell side of spreads. Soybeans did catch several sales of soybeans and soybean meal throughout the week.

The initial excitement turned to concern and gloom on Thursday in the commodities after the US and China signed the historic Phase One trade deal. The 8 chapter 94 page deal outlines that China will make a series of changes including opening up it’s market to foreign investment, provide stronger protection for intellectual property and not force transfers of technology to access the Chinese market. The Phase One deal also looks to narrow the trade deficit between the US and China with China importing more US goods. Increases include $77 billion in manufactured goods, $32 billion in agricultural goods, $52.4 billion in energy products and $37.9 billion in services.

Thursday equities, energies and currencies all rallied on the trade deal. There were several key points of the deal that agriculture commodities did not like. Including the clause that allows China to buy in a competitive market. Meaning that it is not a captive customer to the US.

Cooler calmer heads came back to the trade on Friday with the thought that China will still need to buy commodities and with the Phase One Deal rolling back some of the tariffs the US should be competitive with other global commodity sources.

There is chatter that USDA  will issue the final round of MFP payments following comments made by Secretary Perdue. There has been no official statement yet from USDA.

NOPA Crush on Wednesday came in above analysts estimates. NOPA December crush was expected to be 171.6 million bushels and came in at 174.812 million bushels. That’s about 3 million bushels higher than a year ago.

Ethanol Production for the week  was up 4.7% to 1.077 mln bbls per day. Ethanol stocks also rose back to the September high of 23 million barrels.

There is some analyst hope that China will buy more US ethanol and DDGS given the country scrapped their own ethanol infrastructure program.

Livestock were mostly mixed on the week as cattle continue to try and push higher. Lean hogs saw limited selling ahead of the trade deal. Friday saw live cattle and lean hogs come back to the green. Feeder cattle attempted several times to make gains, but a strong corn market kept a lid on the feeders.

Traders were disappointed  on the weekly beef and pork export report that showed pork net sales of 38,700 MT only 1,900 MT was bound for China.

Live cattle trade in the country fired up on Thursday in Nebraska, Kansas, Texas, Colorado and Iowa. Over 10,500 head traded at a $124 live. Iowa and Nebraska saw dressed trade at $198-$199. That is mostly steady with a week ago.  For feeders that are still holding cattle asking prices look to remain at $125-$126 live and $205 in the beef.  Bids emerged again on Friday of a $198-$199 in Iowa and Nebraska. No sales were reported

Tight cattle supplies are expected to run through the first quarter of the year and packers will have pay to keep plants at capacity.

Beef cutouts are not helping packer margin or cattle traders as they continue to stay stagnate and the choice select spread narrows.

Beef Cutout at Midday Friday

Choice up 1.09 213.99

Select up 1.98 213.45

Choice Select Spread 0.54

Loads 60

Pork Cutout at Midday Friday

Carcass  dn 2.82 72.63

Bellies dn 10.16 92.49

Loads 234

 

Cattle Slaughter

33,000 Saturday 33,000 wk ago 24,718 yr ago

Hog Slaughter

154,000 Saturday 225,000 wk ago 143,743 yr ago

Grain Settlement

  • Corn up 6 1/4 -13 3/4
  • Soybeans up 3 – 5 3/4
  • Chicago Wheat up 3 – 5 1/4
  • Kansas City Wheat up 8 1/2 – 9 1/2

Livestock Settlement

  • Live Cattle dn 0.05 up 0.82
  • Feeder Cattle dn 0.72 up 0.17
  • Lean Hogs dn 0.02 up 0.82
  • Class III Milk up 0.01 – 0.16

 Pre-opening Market Broker  Commentary

Mark Gold, Top Third Ag Marketing, discusses overnight grains and what the trade may see today.

Jerry Stowell, Country Futures, discusses factors influencing the livestock trade today.


Midday Market Broker Commentary

Mike Zuzolo, Global Commodity Analytics, shares his thoughts on the midday trade factors.

Closing Market Broker Commentary

Closing commentary with John Payne, Daniels Ag Marketing, and Jack Fenske, York Commodities.

Crazy week of reports.  From the January 10th report, Phase One, USMCA…but still beans had a rough week.  Shows volatility & one needs to be prepared.  Last 60 days we have been in a tight range.   Ethanol margins remain tight…China even mentioned ethanol in Phase One.  South American weather & current harvest.  Hogs could see the boost from the trade deals.  There is money to be made in the cattle market right now.

University of Nebraska’s TAPS, testing ag performance solutions, is gearing up for the 2020 growing season. Matt Stockton, UNL Extenstion Ag Economist, says “TAPS simply put is a friendly growing competition to see real world results for University research and ag producer knowledge.”

The 2020 TAPS program will offer contestants the ability to manage a sprinkler irrigated corn, sub surface drip irrigated  corn or sprinkler irrigated grain sorghum plot. Contestants also have to market their plot as if it were a 1,000 or 3,000 acre farm. At the end of the year the individual or team that has the most profitable and efficient farm will win not only bragging rights, but a small cash purse.

2019 UNL TAPS Champion Team
A group from Perkins County won the 2019 sprinkler corn irrigated TAPS contest.
Photo Credit: UNL TAPS.

Matt Stockton below describes the opportunity TAPS holds for producers of any age and some of the valuable data the program has provided for UNL Extension research.

 

 

If your interested in joining TAPS for the 2020 growing season visit https://taps.unl.edu/

Tomorrow’s signing day with China.  A lot of stories about what be included.  WTO guidelines.  Chinese imports.  Bird flu update for China.  Turkey’s in Northern Hungary as well.  We continue to see tight ethanol supplies.  Weather updates for South America.  Corn harvest 2% done in Brazil. Global wheat crop.  Livestock market & what China’s hog market looks like.  Some short term technical on cattle.

 

Higher corn, lower beans & wheat.  Quiet day in the market trade. China needs help…food for both people & livestock.  Will we see any fireworks from Wednesday’s signing?  Bird flu in China with swans.  Ethanol margins remain tights.  Weekly export numbers on the softer side.  Why are we seeing lower numbers in the livestock?  Chinese New Year Celebrations.

 

USDA WASDE Report.  Nothing friendly on the grain report.  Unicorn type of day!  Brad explains.  How do the basis numbers look?  Ethanol/DDG’s & China.    Cattle prices were higher with the hopes that the cash would see some higher Friday trade numbers.  Macro’s for the cattle not great.  Middle of a big fund role.  Negative side of the market is the cut-out value-cutting back on Saturday kills.  No real threat in the weather-does that make you nervous?  Hogs still caught in the same trading range.

 

OMAHA (DTN) — USDA on Friday bumped up corn yield and soybean production while showing overall lower quarterly stocks for corn, soybeans and wheat from the same period a year ago.

Corn production was forecast at 13.69 billion bushels (bb) with a national average yield of 168 bushels per acre (bpa), 1 bpa higher than last month’s forecast.

USDA increased final 2019 soybean production to 3.558 bb, up from 3.550 bb in the December report, a surprise to analysts who expected to see the effects of the historically challenging production season continue to ripple through the country’s soybean supplies.

Corn quarterly stocks were down 5% from the same time last year while soybean stocks were down 13% from the same period last year.

According to DTN Lead Analyst Todd Hultman, Friday’s new U.S. ending stocks estimates were bearish for corn, neutral for soybeans and wheat; the 2019-20 world ending stocks estimates were neutral for corn, soybeans and wheat; the Grain Stocks report was roughly neutral for corn and soybeans and slightly bullish for wheat.

Check this page throughout the morning for important highlights from the reports and commentary from our analysts on what the numbers mean.

You can also access the full reports here:

— Crop Production: https://www.nass.usda.gov/…

— World Agricultural Supply and Demand Estimates (WASDE): http://www.usda.gov/…

WINTER WHEAT SEEDINGS

Farmers planted 30.8 ma to winter wheat this fall, compared to 31.2 ma last year and the average pre-report estimate of 30.7 ma. This represents the second lowest United States acreage on record.

USDA said area seeded to hard red winter wheat is expected to total 21.8 ma, down 3% from 2019.

Soft red winter wheat area, at 5.64 ma, is up 8% from last year.

Farmers planted 3.37 million acres to white winter wheat, a 4% decrease.

In Kansas and Oklahoma, USDA said farmers planted 27,000 acres to canola, 58% below last year. If realized, planted acreages in both states would represent a new record low.

You can also access the full reports here:

— Crop Production: https://www.nass.usda.gov/…

— World Agricultural Supply and Demand Estimates (WASDE): http://www.usda.gov/…

CROP PRODUCTION

Corn:

USDA forecast corn production at 13.69 bb with a national average yield of 168 bpa, 1 bpa higher than last month’s forecast.

The agency lowered its harvested acreage estimate by about 300,000 acres, which offset some of the increased production from a slightly higher average yield. The 13.69 bb production forecast is up 31 mb from last month’s estimate and at the high end of pre-report expectations.

USDA’s estimate of a 3.558-bb soybean crop for 2019 is a 20% drop from 2018’s crop of 4.428 bb.

Soybeans:

To reach its 2019 estimate, USDA adjusted the 2019 average soybean yield up half a bushel from the December report to 47.4 bpa, based on increases in Illinois and Indiana. Despite the slight jump upward, that average yield still stands 3.2 bushels below the 2018 crop.

Harvested acres were adjusted down 600,000 acres from the December report to 75 ma, down 14% from last year, with the largest decreases coming from the Dakotas.

WASDE

Corn:

Domestic ending stocks for the 2019-20 crop year declined 18 bb from last month’s forecast to 1.89 bb, but the agency made some fairly large changes in its forecast for use. USDA increased its forecast for feed and residual use by 250 mb, which it said was based on its latest estimates from the Grain Stocks report. USDA cut the corn export forecast by 75 mb and food, seed and industrial use by 20 mb. The national average farm gate price was unchanged from last month at $3.85 per bushel.

Globally, ending stocks for 2019-20 declined to 297.8 million metric tons (mmt), a 2.75 mmt decline from last month that was in line with the analysts’ forecast.

Soybeans:

U.S. soybean ending stocks for 2019-20 were left at 475 mb in the January report. The agency left supply and demand almost completely untouched from December, only dropping beginning stocks to 909 mb, boosting production slightly and cutting imports by 5 mb.

The average U.S. soybean farmgate price was increased 15 cents to 9 dollars per bushel, reflecting stronger soybean oil prices.

Globally, USDA left South American soybean production untouched, with Brazil’s estimate at 123 mmt and Argentina’s 53 mmt. Global ending stocks were pegged at 96.7 mmt, a slight upward adjustment from December’s estimate of 96.4 mmt. Major changes in supply/demand.

Wheat:

USDA forecast 2019-20 domestic ending stocks for wheat at 965 mb, a 9 mb decline from last month’s estimate. The change was due to a 10 mb increase in feed and residual use and a 1 mb decline in use for seed. The national average farm gate price was $4.55 per bushel, unchanged from last month.

Globally, USDA revised ending stocks down by 1.42 mmt. USDA lowered foreign production in Russia by 1 mmt and in Australia 0.5 mmt. It also raised production forecasts for the European Union by 0.5 mmt.

QUARTERLY GRAIN STOCKS

Quarterly “disappearance” or usage for soybeans and wheat were both higher from the same period last year running from September to November while corn usage was down slightly.

Corn disappearance was pegged at 4.52 bb, down just slightly from 4.54 bb over the same quarter last year. Corn stored from September to November totaled 11.4 bb, down 5% from the same period last year and right in line with the average pre-report estimates. Of total stocks, USDA reported 7.18 bb on the farm, down 4% from the same period last year. Off-farm stocks was pegged at 4.21 bb, down 6% from a year ago. On-farm storage in states such as North and South Dakota may be a little misleading because of unharvested acres, which USDA still brands as being stored on the farm.

Soybean usage from September to November amounted to 1.22 bb, up 8% from the same period last year. Soybeans stored in all positions on Dec. 1 totaled 3.25 bb, slightly above the pre-report average from analysts and down 13% from the same period last year.

On-farm storage was pegged at 1.53 bb, down 21% from a year ago. Off-farm stocks were reported at 1.73 bb, down 5% from last year.

Wheat usage for the quarter was pegged at 512 million bushels (mb), up 35% from the same period last year. All-wheat stored on Dec. 1 totaled 1.83 bb, lower than the pre-report average estimate and 9% below last year’s stored crop. Off-farm stocks were listed at 1.31 bb, down 13% from last year. On-farm stocks were estimated at 519 mb, up 3% from last year.

WINTER WHEAT SEEDINGS

Farmers planted 30.8 ma to winter wheat this fall, compared to 31.2 ma last year and the average pre-report estimate of 30.7 ma. This represents the second lowest United States acreage on record.

USDA said area seeded to hard red winter wheat is expected to total 21.8 ma, down 3% from 2019.

Soft red winter wheat area, at 5.64 ma, is up 8% from last year.

Farmers planted 3.37 million acres to white winter wheat, a 4% decrease.

In Kansas and Oklahoma, USDA said farmers planted 27,000 acres to canola, 58% below last year. If realized, planted acreages in both states would represent a new record low.

Pre-Report trade. If the wheat is leading higher on the S&D Report the dollar will have a reaction. Trade might not be worried about the corn.  bullish surprise in the report though could be the corn, seeing where we are at in harvest.   Phase Two comes after elections.  Phase one is on track for January 15th.  Iran still being talked about.  World Supply Demands with South America.  Winter seeding for the wheat brought to the front of the classroom.  USMCA.  Wall Street Journal & the tide turning.  Cattle market & waiting for the cash continues to be on the quiet side.

China…they are scrapping their ethanol program & what does that mean?  GCI China talks of lifting duties on DDG’s.  Ethanol mandate by 2020, was never bought into.  Due to weather, the USDA report delayed until Friday along with the WASDE report.  Political talk making national news, is the current issues with Iran having any effect on the markets?  ASF hits again in Bulgaria.  Consolidation in the cattle as they wait for the cash to fully develop.

 

Blahh negativity markets. Seems to be the tone for the trade this week. A lot of stock being put into this trade deal. January report…different from last year when we had no report. USMCA moving forward in the Senate. Weather in South America. Some spread activity in cattle, nothing like what we saw in yesterday’s trade. Hog market looking at China going into deep freeze for pork to feed people. Impossible Foods wanting to move into the “Pork” market & offer to Asia.