Tag Archives: soybeans

Summary

Tuesday may see the Federal Government move one step closer to another round of Federal Stimulus. However that may take the backseat as the Senate takes up the second charge of impeachment on former President Trump.

On Monday Janet Yellen was sworn in as the first female Secretary of the United States Treasury.  She so far has been lockstep and a promoter of increased fiscal stimulus. That coincides well with the FOMC starting their two day meeting likely centered around the proposed $1.95 trillion dollar stimulus plan from the Biden Administration.

Arlan Suderman Chief Economist for Stone X highlighted why another round of stimulus that equates to 10% of the US’s GDP may not be the best idea even if interest rates are cheap. Suderman said, “The problem is, debt never gets paid back while the rates are still low, and the Fed can only influence medium and long-term rates – it can’t actually control them. It will do all it can to hold them down, but eventually it will fail, rates will rise, and the federal budget will collapse under the weight of interest payments. There are segments that need assistance due to what we’ve already done to them with Covid-related restrictions over the past year, but this economy is poised to come back if we would open things up and allow people to work.”

Grains kicked the afterburners on in the open follow a strong flash sale of US corn to China. USDA announced the sale of 1,360,000 MT or 53.54 million bushels of corn sold to China and102,800 MT of corn sold to unknown destinations all for the 20/21 marketing year. ADM via Reuters also announced that they sold China 200 million gallons of ethanol. Delivery is expected to take place some time in the first half of the year. 

Argentina is still contending with a trucker strike that started almost immediately after it was able to settle the oilseed worker strike. Stone X’s Argentina team reported that there was just 10% of normal truck traffic into Argentina ports last week. That does not help get the crop to the ports and may keep China taking delivery of US soybeans. USDA did not announce any flash sales Monday morning.

There was rumor that China may be trying to change some cargoes from the US to Brazil to capture the first part of the harvest, but that has not been validated. Either way the US only needs to export about 15 million bushels per week through the end of August to meet the USDA’s export goals. That means the likelihood of the US actually burning through it’s current carryover supply of soybeans could actually occur. John Payne noted in his afternoon commentary that the grain market is now a sellers market with producers needing to worry less about aggressive marketing and end users stepping up their marketing plans.

As for the Black Sea. Ukraine’s Economy Ministry upped their corn estimates for 2020/21 from 29.3 MMT to 30.3 MMT and corn exports from 22.3 MMT to 23.5 MMT. Russia also moved forward with increasing it’s wheat exports to try and curb domestic inflation. This has caused frustration to the point of civil unrest in parts of Russia.

Livestock were mixed with the higher grain market. Feeder cattle took the brunt of the selling as traders placed the grain feeder spread back on. Feeder cattle were not helped with last week’s higher placements. You can check out the cattle on feed report here:

https://ruralradio.com/agricultural/audio-january-cattle-on-feed-report/ 

As for live cattle and lean hogs they moved slightly higher despite grain pressure. Lean hogs took note of the sharply lower stocks of pork in cold storage on Monday afternoon. Several analysts pointed out that pork belly levels are down to their lowest levels since the early 2000’s. With slaughter levels continuing to stay steady hogs are expected to become more current. That continues to fuel bullish sentiment. As for live cattle the choice and select cutouts continue to add modest gains day after day. The cold storage report wasn’t as friendly with stocks actually increasing 1% month to month, but still sitting about 10% below a year ago.

There was a lot of social media chatter over the weekend from meat whole sellers that supplies continue to tighten and that cattle may be finally coming current from the two major disruptions in 2019 and 2020. With covid practices in place slaughter rates have been about 98% of what they were a year ago.

As expected cash cattle has been slow to establish so far this week. Southern asking prices seem to be at $114-$115 live. The North has not established asking prices. Packers have yet to place any publicly known bids.

For the week ending January 16, 2021, Imported Beef Passed for Entry in the U.S. totaled 37,856, 110.43% of the previous week and 124.93% of the 4-week average.

Expected Slaughter numbers Tuesday

118,000 hd today 118,000 hd wk ago  117,791 hd yr ago

Hogs

493,000 hd today 495,000 ago 492,978 hd yr ago

Midday Carcass Value  Tuesday

Beef

Choice up 2.40 229.13

Select up 0.65 216.86

C/S Spread 12.27

Loads 58

Pork

Carcass dn 0.77 81.36

Bellies up 3.10  128.25

Loads 239

Grain Settlements

  • Corn up 9 3/4 – 20 3/4
  • Soybeans up 18 1/4 – 26 3/4
  • Chicago up 12 1/2 – 16 3/4
  • Kansas City up 11 1/2 – 13 3/4
  • Livestock Settlements
  • Live Cattle up 0.15 -0.65
  • Feeder Cattle dn 0.90 – 2.37
  • Lean Hogs dn 0.17 up 0.42
  • Class III Milk dn 0.49 – 0.57

 

Pre-Opening Market Broker Commentary

Mark Gold, Top Third Ag Marketing, reports the USDA announced a massive sale of corn to China.


Jerry Stowell, Country Futures,  looks at what may impact the livestock futures today. Stowell comments that 23% of the boxed beef business last week went into the export market.


Mike Zuzolo, Global Commodity Analytics, takes a look at the midday trade. The demand bull is taking charge again in the grain market.


John Payne, Daniel’s Ag Marketing, takes a closer look at today’s grain close. Payne highlights how the market has went from a sellers market to a buyers market.


Jack Fenske, York Commodities, looks at the closing market numbers. Fenske is watching for new highs in the corn market.

The first overnight trading session of 2021 was on fire for the grains. Unfortunately the day trade brought a cooling to the market with grains ending the day mixed. Sue Martin with Ag and Investment joined the Fontanelle Final Bell on Monday to highlight some of the reasons why there may have been pull back after the strong overnight session. At the top of the list it may have simply been profit it taking with overnight traders running the corn market to nearly $5 and soybean market to $13.50.

Martin is also closely watching the weather and labor situations in South America. Temps in Argentina and Brazil continue to be hot and dry, but some area’s have seen mixed precipitation. As for the labor side the port strike may not actually be over in Argentina. Martin will be watching the loading of ready ships to see if that offers any idea of where labor stands in Argentine ports.

You can catch the full episode here:

The newest grain export sales report from the USDA for the week ending on December 24 shows that 2020 is ending on a positive note.

Soybean export sales for the 2020-2021 crop surpassed analyst expectations. The trade was looking for sales ranging between 7–25 million bushels. However, the new figure passed those estimates as sales jumped 74 percent from the previous week to 33.7 million bushels. Export sales cancellations also rose 23 percent to 7.9 million bushels. However, a Farm Futures article says that’s not surprising because a recent run-up in the price of soybeans likely caused some price resistance among smaller buyers.

Weekly export sales for 2020-2021 corn also surpassed market expectations in last week’s report. Forecasters were looking in a range of 19-39 million bushels, but USDA reported a 55 percent increase in week-over-week sales to 43.1 million bushels. Rallying corn prices caused cancellations to increase to 5.1 million bushels.

Wheat sales weren’t as strong as those of corn and soybeans. However, they were strong because of a weaker dollar and limited exportable supplies in the Black Sea region. The weekly total was up one-third from the previous week to 19.2 million bushels.

$14 soybeans and $5 always sound nice, but what is the reality the US market could ever get there? On the last trading Friday in 2020 Brian Splitt with Ag Market.Net highlights how technical indicators are poised to take a run at those prices. This comes as soybeans settle firmly above $12 and corn is once again aiming at $4.50.

Splitt also looks at improving fundamentals that continue to support the market. Including South American weather and demand. Above all else is the macro or broader market and there Splitt is closely watching currencies, including the US dollar.

Hear Splitt’s comments for your self right here: