Trade Tensions Keep Pressure on Ag Markets

Good Morning from Allendale, Inc. with the early morning commentary for July 27, 2020.

Grain Markets were lower overnight on beneficial rains over the weekend in dry growing areas as well as escalating U.S.-China trade tensions as both countries shut down each other’s consulates located in their country.  Traders will continue to focus on temperature and precipitation forecasts this week.

Last week, September corn futures were down 6.00 cents, August soybeans were up 7.50 cents, September wheat up 5.50 cents, September soymeal was up 4.80 and September soyoil was down 21 points.

USDA Weekly Crop Progress Report will be released this afternoon at 3 p.m. CDT.  Trade is expecting corn crop conditions to gain 1% to 70% GTE (69% last week, 67% average).  Soybean crop conditions expected to gain 1% to 70% GTE (69% last week, 67% average).  Hard red spring wheat is expected to be stable to down 1% to 67% GTE (68% GTE last week).

CFTC Commitments of Traders report showed funds new net position short -137,770 corn contracts, long +75,809 soybean contracts, long +474 wheat contracts, long +29,673 live cattle contracts and long +10,512 lean hog contracts.

Private exporters reported large export sales on Friday to the USDA of 252,000 metric tons of soybeans to Unknown.  There was also 133,000 metric tons of soybean cake and meal to Philippines.

USDA Monthly Cattle on Feed report was released on Friday and showed On-feed (July 1st) at 99.6% (100% average estimate, 99.5% last month) at 11.438 million head.  Placements at 102.1% (103.8% avg. estimate, 99.5% last month) at 1.798 mil. head and Marketings at 101.3% (101.0% avg. estimate, 73.2% last month) at 1.969 mil. head.   

Police in the Chinese city of Chengdu restricted access to the area around the U.S. consulate when the U.S. was believed to be due to exit the premises in retaliation for China being ousted from its Houston consulate.  State broadcaster CCTV shared a video of the American flag in front of the consulate in Chengdu being lowered and removed.

 Smithfield Foods said workers cannot be socially distant in all areas of its plants, in response to senators who pressed meatpackers on coronavirus outbreaks in slaughterhouses.  Meatpackers are under mounting pressure to protect workers after more than 16,000 employees in 23 states have been infected with COVID-19 and 86 workers died in circumstances related to the respiratory disease, according to CDC data.

China’s soybean imports in June from Brazil soared to a record high, according to customs data, driven by growing demand for soybeans as China’s hog herds recover from last year’s African swine fever outbreak.  China brought in 10.51 million tons of soybeans from Brazil in June, up 91% from 5.5 million tons in the previous year, data from the General Administration of Customs showed. The June figures were also up 18.6% from May imports from Brazil at 8.86 million tons.

Dressed beef values were lower with choice down 0.49 and select down 0.16. The Feeder cattle index is 139.43.  Pork cut-out values were up 0.86.

Post Archives

Allendale Insider

On The Go

Market Movers

Trader Insights

Morning Wake up Calls