Good Morning from Allendale, Inc. with the early morning commentary for March 24, 2020.
Grain Markets pulled back slightly overnight after last session’s strong gains in soybean and wheat futures on higher demand and shipping issues in South America. Corn futures were held down for a third consecutive session on expectations of lower ethanol fuel demand as global oil prices soften.
A coronavirus economic stimulus package remained stalled in the Senate as lawmakers haggled over its provisions, but U.S. Treasury secretary, Stephen Mnuchin voiced confidence a deal would be reached soon. Democrats said the $2 trillion measure contained too little money for states and hospitals and not enough restrictions on a fund to help big businesses.
USDA weekly grain export inspections showed corn exports at 817,000 tonnes (700,000 to 1,050,000 expected), soybean exports at 571,000 tonnes (450,000 to 650,000 expected) and wheat exports at 349,000 tonnes (350,000 to 600,000 expected).
The results of our annual acreage survey were released last week. Our survey expects to see corn acreage at 94.631 million acres, soybeans 83.740 million, and wheat 44.465 million. Implied production is 15.369 billion for corn, 4.163 billion for soybeans, and 1.874 billion for wheat. For more details, check out our survey release video here.
South America weekly crop progress report showed Brazilian soybean harvest progress at 68% complete (59% last week, 68% last year and 65% 5-year average). Brazil 1st corn crop harvest progress at 52% complete (39% last week, 56% last year and 55% 5-year average). Brazil 2nd corn crop planting progress at 90% complete (87% last week, 100% last year and 98% 5-year average). Argentina corn harvest progress at 11% complete (
U.S. ethanol producer, POET said it has suspended corn buying “at a number of locations” due to weak biofuel demand and is evaluating its production levels. “POET has not idled any biorefineries; however, we have temporarily ceased corn purchases at a number of locations and are actively evaluating biofuel production levels to reflect falling gasoline demand,” said spokeswoman Jessica Sexe.
Cold storage report (end of February) showed pork stock storage at 661.660 million lbs. (expected 673 million lbs., 574 million lbs. last month, five-year average at 622 million lbs.). Beef stocks were larger than expected at 490.981 million lbs. (estimated at 456 million lbs., 490 million lbs. previous month, 487 million lbs. five-year average).
Last week’s average cash cattle sale was $109.89 ($110.80 last week’s average). There were confirmed sales yesterday of $120.
Wholesale pork prices last week increased $10.20 while the Lean Hog Index only rose $3.89 and the IA/MN regional prices up $2.72. Pork packers don’t have beef packer margins currently, but they are getting close.
Dressed beef values were higher with choice up 3.57 and select up 4.97. The Feeder cattle index is 116.15. Pork cut-out values were up 3.47.