Tag Archives: soybeans

Summary

At the settlement grains are mixed. Corn and wheat lower. Soybeans higher. The soybean meal market started to make a midday rally on news that Argentina is raising the export taxes on soybeans and soy products 3%. Analysts though point out that whatever Argentina falls short of in supply Brazil will be in the wings with their large harvest just starting to finish up. John Payne, Daniels Ag Marketing, believes the grain markets may be started to set up a near by low given the recent strength in the soybeans. You can listen to his full comments below. Looking at historical charts from 1990-2019 2001 was the only year when the December corn contract put it’s high in January. So there is hope that we will see another rally in 2020.

Currencies are still not helping US commodities as the US dollar starts to flirt with the $100. The US Dollar Index has not been in this territory since April 2017.

USDA announced just prior to the open South Korea is in for 12,300 MT of option origin corn.

Ukraine’s grains exports are up 23.1% for the current marketing year.

According to EIA data, ethanol production expanded by 1.3%, or 15,000 barrels per day (b/d), to 1.054 million b/d last week.
Ethanol stocks tightened 0.3% to 24.7 million barrels.
Imports of ethanol arriving into the West Coast were 35,000 b/d, or 10.29 million gallons for last week. This is the first time in six weeks that imports were logged.

Livestock traded mostly positive through the day. Live cattle futures were hit when the equities started to dip. There is some correlation between equity prices and beef prices as disposable income for beef is more available when equity markets are high. Cutouts are trying to stabilize. Mike Zuzolo, Global Commodity Analytics, believes the cash cattle market may be trying to establish a low to build off of, but it hesitant to put that low building into the futures just yet.

Still just a few scattered bids on the table in the North this afternoon, but the majority of cattle country remains quiet. Some sources are saying that other than some cleanup, business just may be essentially done for the week, especially in the South. Having said that, asking prices for cattle left on show lists are around $117 plus in the South, and $187 plus in the North. Tuesday saw light to moderate trade in most areas. Northern dressed trade ranged from $185 to $187, mostly $187, roughly $3 lower than last week’s weighted average basis Nebraska. Southern live deals were at $115, generally $5 lower than the prior week’s weighted averages.

Midday Carcass Value Wednesday

Beef

Choice dn 1.15 206.32

Select dn 0.88 199.02

C/S Spread 7.30

Loads 103

Pork

Carcass dn 0.35 65.97

Bellies dn 1.62 71.19

Loads 400

Daily Slaughter Wednesday

Cattle

121,000 hd today 121,000 hd wk ago 119,285 hd yr ago

Hogs

496,000 hd today 496,000 hd wk ago 475,733 hd yr ago

Grains Settlements

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

Livestock Settlements

  • Live Cattle dn 0.95 up 0.45
  • Feeder Cattle dn 0.12 up 1.85
  • Lean Hogs up 0.80 – 0.80
  • Class III Milk dn 0.02- 0.23

 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,  looks at what may impact the livestock futures today.

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

John Payne, Daniels Ag Marketing, looks at the grain settlements. Payne believes the grains could be setting in a nearby low this week.

Jack Fenske, York Commodities, looks at the closing market numbers.

Grains settled nearly opposite of Tuesday with soybeans higher, corn and wheat lower. Arlan Suderman, Chief Economist for INTL FC Stone, shares his thoughts on why the wheat bulls may have been a little overdone on Tuesday.  Suderman also shares INTL FC Stones thoughts on Friday’s USDA Forum.

Currencies play a significant factor in grain export competitiveness around the world.  Suderman looks into how the US Dollar is extremely strong against the Brazilian Real impacting soybean exports. The higher dollar though is not as big of a factor for US protein exports. Though there are logistical issues within in China limiting frozen meat exports from the US.

Suderman also updates on the latest happenings from China and the corona virus. As China looks to get its economy back on it’s feet that could mean a big stimulus package. Suderman explains how Chinese stimulus may be beneficial to US exports.

USDA on Tuesday boosted exports for soybeans 50 million bushels (mb) but lowered corn exports 50 mb, despite high sales expectations because of recent trade deals.

USDA increased its forecast for soybean exports by 50 mb to 1.825 billion bushels (bb). Ending stocks, at 425 mb, declined from last month by a corresponding amount and fell within the range of pre-report expectations.

Corn exports were projected at 1.725 bb, down 50 mb from January.

USDA did bump up wheat exports up 25 mb from the January report, to 1 bb

USDA released its February World Agricultural Supply and Demand Estimates on Tuesday as well as its monthly Crop Production report. Traders were closely watching just how USDA might integrate projected exports to China for a few key commodities following the announcement last month of the phase-one trade deal with China that is meant, in part, to boost U.S. agricultural sales to China.

According to DTN Lead Analyst Todd Hultman, Tuesday’s U.S. ending stocks estimates were neutral for corn and slightly bullish for soybeans and wheat; world ending stocks estimates were neutral for corn and wheat, but somewhat bearish for soybeans.

You can access the full reports here:

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

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

CORN

The monthly corn production estimate for the 2019-20 crop was projected at 13.69 bb, the same as January, with a national average yield of 168 bushels per acre, also unchanged.

Exports were lowered 50 mb to 1.725 bb with USDA citing “the slow pace of shipments through January.” USDA increased domestic ethanol use by 50 mb as well, increasing use to 5.425 bb for ethanol for the 2019-20 crop.

Total corn use was projected at 14.07 bb, the same as January, and ending stocks were projected at 1.892 bb, also the same as January. That brings the stocks-to-use ration for the 2019-20 crop at 13.4%.

The average farm-gate price for the 2019-20 crop was pegged at $3.85 a bushel, also unchanged for January.

Globally, USDA slightly lowered global production by a fractional number, but increased global domestic demand by 1.81 million metric tons (mmt). Global ending stocks, less China, were dropped by 970,000 metric tons.

The corn stocks-to-use ratio for the 2019-20 crop year was 13.4%, unchanged from last month.

SOYBEANS

USDA forecast 2019-20 domestic ending stocks at 425 mb, a 50 mb decline from last month based on forecasts for corresponding increase in exports. The agency left production and other demand forecasts unchanged.

The national average farm gate price was lowered by a quarter to $8.75 per bushel.

Globally, USDA revised ending stocks upwards to 98.86 mmt a 2.19 mmt increase. Brazilian production forecasts climbed by 2 mmt to 125 mmt while Argentine production was left unchanged at 53 mmt.

Domestic soybean stocks-to-use for 2019-20 declined to 10.5% from last month’s 11.8% estimate.

WHEAT

Domestic 2019-20 wheat ending stocks were trimmed by 25 mb to 940 mb, a five-year low that came within analysts’ pre-report expectations. That change was driven entirely by an increase of 25 mb in wheat exports, from 975 mb in January to 1 bb in the February report. The agency cited “growing competitiveness in international markets” for that adjustment.

The average farmgate price for wheat was pegged at $4.55 per bushel, unchanged from the January report.

USDA tweaked global ending stocks to 288.03 mmt, just under last month’s estimate of 288.08 mmt and within analysts’ pre-report estimates.

Australian wheat production was left unchanged from the January estimate of 15.6 mmt, despite widespread fires and drought in the country. USDA also left Russian wheat exports at 34 mmt, despite reports that the Russian government would soon restrict exports.

Wheat stocks-to-use declined by 1.7 percentage points to 43.4%.

WORLD PRODUCTION (million metric tons) 2019-20
Feb Avg High Low Jan
CORN
Argentina 50.0 49.8 51.0 48.0 50.0
Brazil 101.0 100.8 101.0 99.0 101.0
SOYBEANS
Argentina 53.0 53.1 54.0 52.5 53.0
Brazil 125.0 123.8 125.0 122.5 123.0
U.S. ENDING STOCKS (Million Bushels) 2019-20
Feb Avg High Low Jan 2018-19
Corn 1,892 1,856 2,017 1,667 1,892 2,221
Soybeans 424 448 586 320 475 909
Wheat 940 953 999 900 965 1,080
WORLD ENDING STOCKS (million metric tons) 2019-20
Feb Avg High Low Jan 2018-19
Corn 296.8 297.5 299.5 295.0 297.8 320.4
Soybeans 98.9 97.2 102.9 94.2 96.7 110.3
Wheat 288.0 287.2 288.8 280.0 288.1 278.1

Heather Ramsey, ARC Group, talks China, Corona Virus, flow, and Brazilian soybeans. The Corona Virus kept the entire market space in a fear grip for most of the trading day. China is considering extending is Lunar New Year celebration in an effort to curb the spread of the virus.  Export inspections were not exciting and mostly expected. Except for wheat which came in below analysts expectations. Brazilian soybean harvest is about 9% behind where it was a year ago.

There are plenty of factors currently impacting the market trade Ramsey shows how timing over historical periods are still very important to a farm marketing strategy.

Ramsey says, “As farmers were worried about protecting from lower prices. We can always handle higher prices by selling more.”

China’s purchases of U.S. pork and soybeans rebounded in November and December, ahead of today’s (Wednesday’s) signing of the phase one trade agreement between the two nations.

Reuters reports that Chinese agricultural imports from the United States were at 14.1 billion yuan, or $2 billion, in December. A Chinese customs spokesperson says the increase in imports of soybeans and pork comes as “positive U.S.-China trade sentiment has boosted companies’ confidence in December.” African swine fever has severely reduced China’s hog herd, the world’s largest producer and consumer of pork.

China has since increased exports of U.S. pork to record levels. Pork exports to China and Hong Kong were up 49 percent in value at $1.18 billion from January to November 2019. Consumer prices for pork in China nearly doubled since the initial outbreak of African swine fever, and efforts to rebuild the hog herd in China are slow going. China has also released frozen pork from state-owned reserves to help ease the situation for consumers.