Good Morning from Allendale, Inc. with the early morning commentary for September 21, 2020.
Grain Markets were lower overnight after a strong rally last week but remain steady as China continues to buy U.S. grain. Traders will be watching yield numbers in the next few weeks as weather remains to look great for harvest advancement.
Last week, December corn futures were up 9.75 cents, November soybeans were up 47.75 cents, December wheat up 35.25 cents, December soymeal was up $17.50 and December soyoil was up 144 points.
U.S. Ag Department released details on the second round of COVID-19 aid for farmers last Friday, which will pay up to $14 billion to growers of major crops such as corn, soybeans and wheat, as well as livestock, dairy and tobacco. Based on the USDA’s harvest projections, farmers could receive about 23 cents a bushel for corn (or $3.427 billion) and 31 cents a bushel for soybeans (or $1.337 billion) according to a Reuters analysis of figures from the USDA and the American Farm Bureau Federation.
USDA Weekly Crop Progress Report will be released this afternoon at 3 p.m. CDT. Trade is expecting corn crop conditions to stay unchanged at 60% GTE (60% last week, 63% average). Corn harvest is expected at 13-15% complete (5% last week). Soybean crop conditions expected to stay unchanged at 63% GTE (63% last week, 63% average). Soybean harvest expected at 5% complete. Hard red winter wheat planting is expected to be at 20% complete (10% complete last week).
CFTC Commitments of Traders report showed funds new net position long +58,556 corn contracts, long +191,774 soybean contracts, long +15,112 wheat contracts, long +59,620 live cattle contracts and long +42,472 lean hog contracts.
Private exporters reported export sales on Friday to the USDA of 210,000 metric tons of corn to China during this marketing year. There was an additional 132,000 metric tons of soybeans to China during this marketing year and 100,000 metric tons of soybean meal to Unknown for this marketing year as well.
India’s parliament passed new bills the government says will make it easier for farmers to sell their produce directly to big buyers, despite growing protest from opposition parties and a long-time ally of the ruling party. Many Indian farmer organizations have held street protests in Punjab and the neighboring Haryana state near New Delhi in the last few days.
Cash cattle sales last week were mostly higher with Western Iowa at $104-$105’s. The average price last week was $3-4 higher from the previous week.
Mechanical issues limited hog processing at the end of last week bring the weekly kill numbers down to 2.587 million (without the issues it would have run about 2.613 million). Last week’s kill was 0.5% under last year.
Dressed beef values were higher with choice up 0.59 and select up 0.55. The Feeder cattle index is 142.19. Pork cut-out values were up 0.50.