Tag Archives: markets

Summary

Friday’s close was a stark difference to Thursday. Corn erased  Thursday’s losses. Wheat and soybeans look to add gains for the week.

The commodity markets started the week with optimism. Wheat was a leader to the top side in the grains. Russia’s ag minister announced early in the week that Russia would put a 20MMT quota on wheat exports through June 30, 2020. That is about 5 MMT lower than what Russia exported in the last six months of 2019. The Black Sea Region is also experiencing high temps and little rainfall. Helping to set up a possible global wheat supply story. With wheat higher corn also gradually made it’s way higher. Soybeans lagged of all three grains and seemed to be the possible sell side of spreads. Soybeans did catch several sales of soybeans and soybean meal throughout the week.

The initial excitement turned to concern and gloom on Thursday in the commodities after the US and China signed the historic Phase One trade deal. The 8 chapter 94 page deal outlines that China will make a series of changes including opening up it’s market to foreign investment, provide stronger protection for intellectual property and not force transfers of technology to access the Chinese market. The Phase One deal also looks to narrow the trade deficit between the US and China with China importing more US goods. Increases include $77 billion in manufactured goods, $32 billion in agricultural goods, $52.4 billion in energy products and $37.9 billion in services.

Thursday equities, energies and currencies all rallied on the trade deal. There were several key points of the deal that agriculture commodities did not like. Including the clause that allows China to buy in a competitive market. Meaning that it is not a captive customer to the US.

Cooler calmer heads came back to the trade on Friday with the thought that China will still need to buy commodities and with the Phase One Deal rolling back some of the tariffs the US should be competitive with other global commodity sources.

There is chatter that USDA  will issue the final round of MFP payments following comments made by Secretary Perdue. There has been no official statement yet from USDA.

NOPA Crush on Wednesday came in above analysts estimates. NOPA December crush was expected to be 171.6 million bushels and came in at 174.812 million bushels. That’s about 3 million bushels higher than a year ago.

Ethanol Production for the week  was up 4.7% to 1.077 mln bbls per day. Ethanol stocks also rose back to the September high of 23 million barrels.

There is some analyst hope that China will buy more US ethanol and DDGS given the country scrapped their own ethanol infrastructure program.

Livestock were mostly mixed on the week as cattle continue to try and push higher. Lean hogs saw limited selling ahead of the trade deal. Friday saw live cattle and lean hogs come back to the green. Feeder cattle attempted several times to make gains, but a strong corn market kept a lid on the feeders.

Traders were disappointed  on the weekly beef and pork export report that showed pork net sales of 38,700 MT only 1,900 MT was bound for China.

Live cattle trade in the country fired up on Thursday in Nebraska, Kansas, Texas, Colorado and Iowa. Over 10,500 head traded at a $124 live. Iowa and Nebraska saw dressed trade at $198-$199. That is mostly steady with a week ago.  For feeders that are still holding cattle asking prices look to remain at $125-$126 live and $205 in the beef.  Bids emerged again on Friday of a $198-$199 in Iowa and Nebraska. No sales were reported

Tight cattle supplies are expected to run through the first quarter of the year and packers will have pay to keep plants at capacity.

Beef cutouts are not helping packer margin or cattle traders as they continue to stay stagnate and the choice select spread narrows.

Beef Cutout at Midday Friday

Choice up 1.09 213.99

Select up 1.98 213.45

Choice Select Spread 0.54

Loads 60

Pork Cutout at Midday Friday

Carcass  dn 2.82 72.63

Bellies dn 10.16 92.49

Loads 234

 

Cattle Slaughter

33,000 Saturday 33,000 wk ago 24,718 yr ago

Hog Slaughter

154,000 Saturday 225,000 wk ago 143,743 yr ago

Grain Settlement

  • Corn up 6 1/4 -13 3/4
  • Soybeans up 3 – 5 3/4
  • Chicago Wheat up 3 – 5 1/4
  • Kansas City Wheat up 8 1/2 – 9 1/2

Livestock Settlement

  • Live Cattle dn 0.05 up 0.82
  • Feeder Cattle dn 0.72 up 0.17
  • Lean Hogs dn 0.02 up 0.82
  • Class III Milk up 0.01 – 0.16

 Pre-opening Market Broker  Commentary

Mark Gold, Top Third Ag Marketing, discusses overnight grains and what the trade may see today.

Jerry Stowell, Country Futures, discusses factors influencing the livestock trade today.


Midday Market Broker Commentary

Mike Zuzolo, Global Commodity Analytics, shares his thoughts on the midday trade factors.

Closing Market Broker Commentary

Closing commentary with John Payne, Daniels Ag Marketing, and Jack Fenske, York Commodities.

Cattle saw a massive amount of fund buying on Friday.  Interesting that beef had the biggest reaction to the news about China.  Already some longs going into Friday.  Fundamentals of the cattle-weights are higher than a year ago.  Producer is asking for higher money.  Could we see some higher money in this last full trading week of 2019?  Is there some bullish feelings in cattle & are hogs too cheap?  Corn to see a rally?   Beans take a jump in the markets.  Wheat is the easiest most exportable item.  Some general comments about China.

 

Arlan Suderman, INTL FCStone, has a lot to discuss on the Fontanelle Final Bell starting in the grains. Suderman looks at the bushels still in the field across the US as 2019 winds down. Then the conversation turns global with a look at South American soybeans and wheat exports.

Suderman also dives into the current diplomatic state between the US and China and the odds of phase one trade deal coming to fruition. The currency markets are keeping a close eye on the progress of the trade talks and it could im