Tag Archives: corn

Summary

Tuesday 5/26 market recap.

The trade seems to favor the re-opening story on Wednesday morning. Instead of the US China tension story. That really seems to be at the root of what markets rise and fall on here towards the end of May and first of June. Still there is rumors in the trade that President Trump is considering stiff sanctions against China due to their treatment of Hong Kong and prison camps. Wedneseday is a little light for economic data early, but the beige book will be out later this afternoon. The beige book is where each Federal Reserve Bank gathers anecdotal information on current economic conditions in its District through reports from Bank and Branch directors and interviews with key business contacts, economists, market experts, and other sources. The Beige Book summarizes this information by District and sector. An overall summary of the twelve district reports is prepared by a designated Federal Reserve Bank on a rotating basis. This could highlight issues that the pandemic has caused to the US economy.

Traders were treated to a bullish surprise on housing data Tuesday.  Analysts expected a sharp decline in new home sales to an annualized rate of 495,000 in April. Sales actually improved in April to an annualized rate of 623,000. Homes buyers seem to be taking full advantage of record low mortgage rates.

Investors are also thawing their money from the safe haven of the US Dollar on hopes that the US economy is over the hump of Covid-19 and ready to start moving higher. The dollar went down well past it’s 100 day moving average on Tuesday evening. Wednesday morning it is coming around and is back to it’s 100 day moving average. We will see if the day trade can bring in some pressure to drive it down again. Crude oil is not liking a rebounding dollar as it starts to slide. That has pressure on the entire energy complex.

Grains returned to the bulls in the overnight on Tuesday. With little data out this week traders are closely watching for weather issue’s to develop. Over the weekend much the corn belt was able to fill in much of it’s dry area’s. The winter wheat belt received some moisture, but Western Kansas missed out on much of the moisture. Still the latest crop progress report shows winter wheat improving in quality. Nationally the crop improved 2% to 54% good to excellent. Kansas remained unchanged at 40% good to excellent. Nebraska improved 3% to 70% good to excellent. Colorado wheat farmers are still struggling with a poor crop as only 32% of the winter wheat is considered good to excellent. Corn and soybean planting continue well ahead of their five year average. Nebraska and Iowa are both 97% complete for corn planting. As expected North Dakota and Pennsylvania are just at the half way point for corn planting. This may help curb some corn acres, but for the majority the US looks to have another large crop developing.

There were no flash sales from USDA last week, but Tuesday got rolling with two sales. The first 264,000 MT of soybeans sold to China; 66,000 MT for the 19/20 marketing year and 198,000 MT for the 20/21 marketing year. Then unknown destinations purchased 216,000 MT of soybean meal for the 19/20 marketing year. Wednesday morning USDA announced 138,000 MT of soybean meal in the unknown order were bought by the Philippines for the 19/20 marketing year.

Monday export inspections showed week to week reductions for all grains except wheat. Corn was still fairly solid at 1,091, 972 MT vs. 1,182,471 MT. Soybean export inspections were 333,127 MT vs. 356,078 MT.  Wheat export inspections were 535,691 MT vs 506,323 MT. Sorghum exports were 140,458 MT vs. 285,813 MT. All grains inspected for export thus far in the 2019-2020 marketing year is just over 90 MMT. That is still about 7.8 MMT less than the previous marketing year. The largest spread between marketing years is corn which is about 8.2 MMT behind the previous marketing year. Soybeans and sorghum are both ahead of the previous marketing year. Wheat is almost steady with the previous marketing year.

Livestock started the week strongly higher. The August feeder cattle will see expanded trading limits on Wednesday as they closed the $4.50 limit higher. Feeder cattle strong Tuesday gains come on the heels of last Friday’s USDA cattle on feed report. The report showed the lowest placements going into feed yards since the report started in 1996.

As for fed cattle there were still 11.2 million on feed as of May 1 and it is lower year to  year, but sheds some light on how backed up cattle are from the lack of slaughter capacity. Thankfully that is improving with last week crossing the 500,000 hd mark for the first time in weeks. As slaughter capacity increases carcass cutouts are starting to come down from their highs. Last week the choice cutout fell over $53 near the $400 mark. Tuesday showed more declines as the choice cutout drop below $400 for the first time in nearly a month. Load count continues to be strong for beef and pork. Showing that demand at the retail level continues to be steady. As restaurants are able to start opening dining rooms again food service demand is also starting to come back.

Cattle on feed report Friday.

May Cattle on Feed May 2020 % to 2019 Est.
On Feed 11.2 mln hd 95.00% 95.00%
Placed 1.43 mln hd 78.00% 77.10%
Marketed 1.46 mln hd 76.00% 74.70%

 

The fed cattle cash trade started early this week with a light trade being reported in Nebraska at $190. The source reports it was around 250 head. That would be fully steady with last week’s upper trade. Asking prices are around $120 plus in the South and $195 in the North. A few bids have been noted in Iowa at $190.

Friday slaughter was 102,000 head, 11,000 more than last week, but 18,000 smaller than a year ago. Saturday’s kill is estimated at 56,000 head, bringing the weekly total to 555,000 head, 56,000 above the prior week, but 92,000 less than 2019. Packing plant managers have said they may only be able to get plants to 80-85% capacity given the social distancing guidelines. That may help get cattle slaughter over the 100,000 head mark, but not much further.

For the week ending May 16, 2020, Imported Beef Passed for Entry in the U.S. totaled 41,699, 111.33% of the previous week and 107.88% of the 4-week average.

 

Expected Slaughter numbers Wednesday

Cattle

106,000 hd today 99,000 hd wk ago 121,536 hd yr ago

Hogs

410,000 hd today 400,000 hd wk ago 461,030 hd yr ago

 

Midday Carcass Value Tuesday

Beef

Choice dn 10.73 386.01

Select dn 9.62 364.56

C/S Spread 21.45

Loads 149

Pork

Carcass up 10.06 106.81

Bellies up 56.62 128.43

Loads 193

 

Grains Settlements

  • Corn up 1- 1 1/4
  • Soybeans up 7 – 13 3/4
  • Chicago Wht dn 1/2 – 2 1/4
  • Kansas City Wht  up  1 3/4 – 2 3/4

Livestock Settlements

  • Live Cattle up 1.70 – 2.37
  • Feeder Cattle up 3.40 -3.50
  • Lean Hogs  up 0.57 – 3.67
  • Class III Milk up 0.23 – 0.50

Pre-Opening Market Broker Commentary

Mark Gold, Top Third Ag Marketing, discusses overnight grains and what the trade may see today. Crop progress held few surprises. The dollar is coming up slightly.


Jerry Stowell, Country Futures,  looks at what may impact the livestock futures today. Packers started cash cattle early on Tuesday.


Mike Zuzolo, Global Commodity Analytics, takes a look at the midday trade.


John Payne, Daniels Ag Marketing, looks at the grain settlements.


Jack Fenske, York Commodities, looks at the closing market numbers. Fenske believes we could see the slow grain trade persist for the next couple of weeks.

No news was good news from the weekend.  No trade issues popping up.  Some shorts in the market & not a lot of willing sellers.  Scattered rain showers will slow some but welcome rain for others.  Some solid weekly exports for the corn but soft for the soybeans.  Ethanol…could we be getting back to a new norm with summer driving & ethanol exports could be the wild card?   Easier to buy then it was to sell on the livestock.  How are numbers from the COF report?  Slaughter numbers moving forward.  Sam talks about the reason for higher hogs today.

 

 

5-22-20
Looking at the frustration of turning the corner on COVID & then a trade war starts picking up. White House puts out 16-page release in regards to China. Will we see counter measures? Is China to be blamed for what is happening globally as we see countries increase pressure on China & China in turn puts tariffs in place. Torpedo’s Taiwan & soybeans. Seasonally tendencies for corn. Heading into a holiday weekend…what tone could we see come Tuesday? Strong bean shipments out of Brazil.

 

 

Looking at export numbers released today, weather front moving in bring some much-needed moisture to the western corn belt.  Some trade friction with a return to demand.  Mike had a report he did looking at China. Is there some retaliation coming from China to countries that question the COVID-19 start?   Cattle on Feed report out on Friday.  Grocery store with ground beef prices.

 

Corn received the short end of the spreads. Wheat has had some dry weather issues.  The virtual wheat tour is under way in Kansas.  How will that effect the way the market trades?  Brazil has had some weather, is there a break headed their way in the drought.  EU & Black Sea weather…what is the damage?  Impact of the CARES act what will that mean for the markets. Update on African Swine Fever.

COVID-19 in one way or another has had an effect on all of us in agriculture.  With Nebraska Corn we brought together some of the leaders in the agriculture industry to talk about what they are doing for their members in light of the happenings in the world.

Ryan LeGrand serves as the President and CEO for the U.S. Grains Council.  He & I talked about how COVID-19 has changed how they reach out to customers…

 

USMEF President and CEO Dan Halstrom said there has been a few surprises that have came due to COVID-19…

 

Roger Berry is Administrator for the Nebraska Ethanol Board.  The ethanol industry has been hit hard due to COVID.

 

Ryan LeGrand serves as the President and CEO for the U.S. Grains Council.  He said that there are high hopes going into the future and that includes corn and sorghum…

 

Kelly Brunkhorst. Executive Director at Nebraska Corn described COVID-19 in one word for his corn growers…

 

USMEF President and CEO Dan Halstrom talks to be about some surprise that have come in since COVID-19 took over daily lives…

President Trump spoke to the farmers today.  How are his comments going to have an effect on the markets today & in the days to come?  Is the world starting to turn against China & will it help to straighten things out?  Politics involved muddies the waters. Is there some stabilization happening in the ethanol market?   The President also suggested not taking beef from other countries.  A quiet day in the cattle market.  Boxed beef dropped again on the day.  Hogs saw a downtrend for a Tuesday.

 

Why was the Monday trade so quiet?  Is it the calm before the storm?  Dow was up, talk of China & trade once is making the news.  Is the bans on foreign trade circling back to COVID-19 & China.  Cooler temps will that have any effect on the crop progress tonight?  Australia gets a tariff put in place on beef from China, China turns around and buys blueberries & barley from the U.S. will this lead to more buys?  Higher cattle lower boxed beef.  Even though still behind on processing movement more cattle are moving through the plants.  Nearby hogs lower dealing with China & taking pork…not still enough to make a dent.

 

This week’s crop progress numbers reported by NASS show planting for corn and soybeans quickly nearing the finish line in several states. Winter wheat quality stays almost unchanged week to week. Moisture levels changed slightly from last week.

NASS does make note at the top of the report that in the first two weeks of June it will gather information about this season’s crop production, supplies of grain in storage, and livestock inventory. The information will help producers, suppliers, traders, buyers and others make informed business decisions. The results will be available on June 25 in the Hogs and Pigs report and on June 30 in the Acreage and Grain Stocks reports. Farmers should watch for their surveys in the mail soon.

Back to crop progress corn planting nationally was 80% complete compared to the 5 year average of 71%. Looking back last year with the numerous planting delays corn planting is up 36%. Nebraska along with several I states and Minnesota have less than 10% of the corn crop left to plant. As of May 17, 91% of Nebraska’s corn is planted. Well ahead of the 5 year average of 78%. Kansas is 74% planted just 2% ahead of the 5 year average. While most states are ahead on their corn planting other states are struggling to get going. Pennsylvania drags the nation with the least corn planted at only 15%. Well behind the 5 year average of 49%.

With over half the corn crop already planted corn emergence is strong across the country. Nationally 43% of the corn crop is emerged up 19% week to week. That is ahead of the 5 year average of 40%. Nebraska is now over the half way mark with 54% of the corn emerged. Up 24% week to week and 32% ahead of a year ago. Kansas has 45% of it’s corn crop emerged. Up from the five year average of 46%.

It’s a similar story in soybean planting with 53% of the nations soybeans planted. A far cry from last years 16%  at the same time. Nebraska has 78% of the soybeans planted up 34% from a year ago and up from the 5 year average of 42%. Kansas has 37% of the soybean crop planted up from the 5 year average of 22%.

Right alongside the corn, soybeans are emerging well. Nationally 18% of the soybeans are above ground. Just 6% ahead of the 5 year average. Nebraska takes soybean emergence one notch better with 29% of the crop emerged. That’s 23% emerged since last week and 24% more emerged than a year ago. Kansas more than doubles their 5 year average with 15% of soybeans emerged. The 5 year average for Kansas is 7%.

Sorghum made another notable appearance in USDA’s weekly export inspections on Monday, but for the current crop US producers are a little behind. Nationally sorghum planting is considered 32% complete as compared to the 5 year average of 34%. Nebraska breaks the national trend with 28% of the sorghum planted as compared to the 5 year average of 22%. Kansas has planted 9% of the sorghum crop compared to the 5 year average of 4%.

For some, time seems to be flying by and custom harvesters are starting to make their way South. Winter wheat heading out is a little behind this year though. 56% of the national winter wheat crop has headed out. Compared to the 5 year average of 62%. Kansas has 61% of it’s winter wheat crop headed out well behind the 5 year average of 75%. Nebraska winter wheat heading is rated at 5% compared to 23% on the 5 year average. Still looking at last year Nebraska is near par with 2019 winter wheat heading out at this time was at 6%.

Winter wheat quality was fairly steady week to week. Nationally winter wheat dropped 1% to 52% good to excellent. Kansas winter wheat went up 2% to 40% good to excellent. Nebraska remained unchanged week to week at 67% good to excellent. Colorado winter wheat is fairly even across all categories now with 28% good to excellent, 28%, fair, 22% poor and 22% very poor. No other major winter wheat growing state has double digit very poor wheat quality.

Oats look fairly good across the country. Nationally the oat crop is rated 75% good to excellent. Nebraska’s oat crop is rated at 68% good to excellent. Iowa’s oat crop is rated at 70% good to excellent.

Pasture and range condition for Nebraska was rated 78% good to excellent with 0% in the very poor stage. Kansas pasture and range was rated 53% good to excellent. 10% now in the poor stage.

Moisture ticked up a little in Kansas and down a little in Nebraska. Topsoil moisture for Nebraska was rated at 77% adequate to surplus down 3% from last week. Kansas topsoil moisture was rated at 66% adequate to surplus up 10% week to week. Nebraska subsoil moisture was rated at 84% adequate to surplus unchanged week to week. Kansas subsoil moisture was rated at 72% adequate to surplus up 3% from last week.

See the entire report here: https://downloads.usda.library.cornell.edu/usda-esmis/files/8336h188j/kd17dd70q/gm80jg11q/prog2120.pdf

Clay Patton recaps the report:

Post virus reopening…crude oil is getting higher; ethanol demand is picking up.  Is there a shift in the markets? Potential inflation due to spending?  COVID outbreaks at the ports in South America.  What does that mean for U.S. exports?    Crazy milk market.  Seeing some pre-virus prices in come contracts!  Lower box beef levels on a Friday.