Good Morning from Allendale, Inc. with the early morning commentary for May 29, 2020.
Grain Market traders are on edge awaiting President’s Trump’s news conference on his Administration’s response to China imposing new security laws on Hong Kong. We also expect to see some position evening today as the May trading month comes to a close.
Weekly export sales will be released this morning at 7:30 AM CDT. Traders expect to see corn sales of 550,000 to 1,300,000 tonnes (new and old combined), soybeans 600,000 to 1,400,000 tonnes, and 150,000 to 600,000 tonnes of wheat.
Ethanol production improved from 663,000 barrels per day up to 724,000. Vs. last year that went from -38.1% to now -31.5%.
The European Commission lowered its estimate of EU wheat from last months 125.8 million tonnes down to 121.5 as parts of the EU have seen poor growing weather. The new figure is well below the 2019/20 crop of 130.8 million tonnes.
SovEcon, the Russian ag consultancy, expects the country to export 36.8 million tonnes of wheat in the 2020/21 marketing year. That estimate is a bit above USDA’s 35.0 and 2019/20’s 33.5 million tonnes.
President Trump said he will give a news conference on China today, as his administration moves to pressure Beijing over its treatment of Hong Kong. (US News)
The economic calendar is busy today with Personal income and Personal Spending due at 7:30 AM CDT. Chicago PMI is due at 8:45 AM, and University of Michigan Consumer Sentiment will be out at 9:00.
Tyson will temporarily close an Iowa pork plant after about 22% of the plant’s workforce tested positive for COVID-19. The Storm Lake plant is expected to reopen next week after thorough cleaning and sanitation.
The state of Iowa’s hog euthanasia program will offer $40 per head to farmers who disposed of their animals. With the program’s $24 million budget this could remove 600,000 head.
Yesterday’s hog kill pushed up to 422,000 head. A normal summer weekday would be around 488,000.
Another day of a 110,000 cattle head kill posted yesterday. We are near the perceived “maximum kill level during the virus” of 95% capacity. If that is true then we’ll be reaching that 114,000 – 116,000 number soon. How well we can pack the Saturdays ahead is an unknown question.
Cash cattle this week has ranged from $111 – $120. Between Wednesday and yesterday, we’ve seen $113 – $120.
Dressed beef values were lower with choice down 8.21 and select down 6.11. The Feeder cattle index is 127.02. Pork cut-out values were up .64.