Good Morning from Allendale, Inc. with the early morning commentary for May 20, 2020.
Grain Markets were mixed with wheat and corn futures lower on improved weather in key exporting countries, lower domestic energy prices and slow global demand due to the coronavirus. Soybean futures edged higher on optimism for higher export demand.
U.S. farmers who grow crops including corn and soybeans will receive coronavirus assistance payments based on either half of their 2019 production or the supplies they had on hand as of Jan. 15, the government said. The payments were set at 45 cents per bushel for soybeans, 32 cents per bushel for corn and 18 cents per bushel for hard red spring wheat, the USDA said. Other crops such as barley, canola, cotton and oats are also eligible for payment under the plan.
Crop scouts on the first day of a three-day tour of Kansas hard red winter wheat fields projected an average yield of 41.1 bushels per acre (bpa) for wheat in the north-central portion of the state and 51.7 bpa for wheat in northwest Kansas. (Reuters)
Trump administration awarded a contract worth up to $812 million for a new U.S. company to manufacture drugs and drug ingredients to fight COVID-19 on American soil, aiming to end dependence on other countries. “For far too long, we’ve relied on foreign manufacturing and supply chains for our most important medicines and active pharmaceutical ingredients while placing America’s health, safety, and national security at grave risk,” said Peter Navarro, director of the White House Office of Trade and Manufacturing Policy.
The U.K. announced a new post-Brexit tariff regime to give it leverage in upcoming trade talks. “Our new Global Tariff regime will benefit U.K. consumers and households by cutting red tape and reducing the cost of thousands of everyday products,” International Trade Secretary Liz Truss said.
USDA Cold Storage report will be released this Thursday at 2 p.m. CDT. Allendale sees end of April pork stocks at 604.588 million lbs. (17 million lbs. less than last month). The five-year average for April is a 12 million lb. increase.
Allendale estimates Thursday’s Cold Storage report for beef around 469.277 million lbs. (33 million under last month). The five-year average is a 6 million lbs. decline.
USDA Cattle on Feed Report (end of April) will be released this Friday at 2 p.m. Allendale sees feedlot placements at 13.3% under last year. This is after seeing -22.7% under last year in March and -7.6% year/year in February. With packers still down last month, Allendale estimates marketings at 15.3% under last year and May 1 Cattle on Feed at 4.9% under last year.
President Trump said the U.S. should consider terminating trade deals in which it imports cattle. “I read yesterday where we take some cattle in from other countries, we have trade deals. I think you should look at terminating those deals,” Trump said. “We have a lot of cattle in this country,” he added.
USDA released details about the livestock portion of the Coronavirus Food Assistance Program with producers getting paid for already sold livestock between January 15 to April 15, plus they will receive a payment for the highest inventory level between April 16 and May 14. The payment rate is $35 for hogs weighing over 120 lbs. or $45 for hogs weighing under 120 lbs. The payment rates for cattle are $125 for mature cattle, $135 for calves, $172 for feeders (+600 lbs.) and $247 for fed cattle.
Dressed beef values were lower with choice down 5.48 and select down 6.00. The Feeder cattle index is 126.84. Pork cut-out values were down 9.76.