June 19, 2019

Grain Markets Find Support On Wet Weather Forecasts

Good Morning from Allendale, Inc. with the early morning commentary for June 14, 2019.

Grain markets continue to monitor weather maps as increased worries about lower yield prospects for the delayed row crops and firm cash markets created support.  "With so much late planting this season, the tail on weather threats to this U.S. corn crop will run well into the northern (hemisphere) autumn," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.  Traders remain cautiously optimistic as prices reach new season highs.

Weekly export sales showed wheat sales of 325,400 tonnes (estimated 200,000 to 500,000), corn sales of 168,500 tonnes (estimated 350,000 to 850,000), soybean sales of 531,100 tonnes (estimated 300,000 to 800,000), soymeal of 154,000 tonnes (estimated 100,000 to 350,000), and soyoil of 5,100 tonnes (estimated 8,000 to 25,000).  Beef export sales of 16,422 metric tonnes (26% below last year, 0.3% YTD over last year). Pork export sales of 23,082 metric tonnes (57% over last year, 26.5% YTD over last year).

Managed money funds (as of 6-12-19) were thought to be long +147,200 corn contracts, short -94,400 soybean contracts, long +3,700 wheat contracts, long +9,700 soymeal contracts, and short - 58,800 soyoil contracts.

Chinese soybean buyers asked U.S. sellers to delay cargoes due to be shipped in July until August, two sources familiar with the matter said.  Raising fears of cancellations similar to the ones that shook up the market last year.

China plans to stockpile up to 7 million tonnes of soybeans bought from the U.S. during a trade truce earlier this year, two traders familiar with the matter said, rather than crush them for immediate sale as a feed ingredient.  "Whatever volumes of soybeans that now come from the U.S. go into storage, as they are preparing for a long-drawn trade war," a Chinese trader said.

Brazil's government said it has lifted a suspension of beef exports to China after dealing with an atypical case of mad cow disease, sending Brazilian meatpackers shares soaring.  The suspension had been in effect since June 3 after a case was reported in a 17-year-old cow in the state of Mato Grosso.

Mexican bread and flour tortilla makers will likely use significantly more U.S. wheat this year despite growing unease with President Trump, according to Mexico's main wheat chamber. "I'd love to send him a message that we're not going to buy more American wheat, but that's not viable," Jose Luis Fuente, head of the CANIMOLT wheat chamber told Reuters.

Strategie Grains now expects the E.U. to export 22.1 million tonnes of soft wheat in the 2019/2020 season which starts this July (23.2 million estimated last month, 21.0 million tonnes revised estimate for 2018/19 season).

Average market hog weights (week ended June 1) rose 1 lb. from the previous week to 213 lbs. (1.4% over last year).

China's sow herd fell by 23.9% in May from a year earlier, the Ministry of Agriculture and Rural Affairs said on Thursday. The huge fall comes as an epidemic of deadly African swine fever continues to spread across the world's top producer of pigs. The pig herd fell by 22.9% last month, the ministry added. It does not reveal the total numbers for herd size. (Reuters)

Weekly Fed Cattle Exchange saw two cattle lots sold today.  Both lots were out of Kansas and sold at $113.  This was even with last week’s sales.

Dressed beef values were lower with choice down 0.05 and select down 2.02. The CME feeder index is 133.36.  Pork cut-out values were up 0.50.


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