Tag Archives: markets

Summary

Friday’s trade closes lower across most of the commodities. Grains did start the day on a fairly positive note. Then traders took notice of USDA’s Outlook Forum calling for US farmers to plant possibly big crops in years to come. Combine that with President Trump’s Tweet hinting at a possible additional round of trade aid payments and the bears started to emerge in the grains.

Friday USDA export sales showed all wheat exports for the week ending Feb 13 at 346,300 MT. Total commitments this year 22,255,100 MT vs 21,483,700 MT last year. Corn exports were at 1,249,200 MT. Total commitments this year 25,008,500 MT vs. 38,316,000 MT last year. Soybeans for the week 494,300 MT. Total commitments 33,446,900 MT vs. 36,762,800 MT last year.

Coming from the USDA Ag Outlook Forum in Washington D.C. USDA expects in the 2020/2021 marketing year US wheat production to drop 4% 1.83 billion bushels on lower yields. USDA expect corn production to increase 13% to 15.5 billion bushels on increased planted acres. USDA expects a record soybean crush at 2.1 billion bushels given a higher demand for soybean meal.

Mid week the Association of American Railroads released their weekly rail car loading numbers. Grain cars dropped 14% week to week to 18,325 grain rail cars loaded. That was the second largest decrease week to week just behind coals 21.4% drop.

Tuesday Australia’s crop agency ABARES estimates the 2019 wheat crop at 15.2 MMT down from 15.85 MMT. If realized this would be the smallest Australian wheat crop since 2008.

Tuesday China announced tariff exemptions on some 697 US goods. The kicker being the exemptions do not go into effect until March 2nd. That is when importers will be able to apply for for exemptions. USDA is still looking for China to purchase up to $36.5 billion in US ag commodities.

Tuesday’s USDA grain inspections were higher for corn and soybeans, but lower for wheat. Corn export inspections showed 795,228 MT vs. last week’s 788,549 MT. Soybeans saw inspections at 992,294 MT vs. 640,240 MT. Wheat inspections were at 501,990 MT vs. 567,349 MT.

The weekly grain barge movement increased the 2020 barge movement for corn 1,635 barges vs. 2019 1,362 barges for wheat 169 barges vs 2019 257 barges, soybeans 1,835 barges vs 2019 1,490 barges. Total 2020 barges 3.645 vs. 2019 3,117.

Last week egg sets have were reported at 238 million. That’s up 3% from a year ago. Chick placements are also up 5% to about 192 million chicks. This safely continues to increase US feed demand. With already lower chicken prices in 2020 though it may continue to pressure beef and pork to stay competitive.

Livestock were weaker most of the day with live cattle seeming to be the leader to the down side. The latest beef and pork exports did not help to feed the bulls. Beef and pork cutouts continue to be weak.

USDA net export sales of beef were up  11% from last week at 19,400 MT. Top buyers included Japan, South Korea, Mexico, and Canada. Beef exports were up 6% from last week at 17,900 MT. Top destinations included Japan, South Korea, Mexico, Taiwan and Canada.

USDA reported net export sales of pork were down 17% with top buyers being Mexico, Japan, Canada, Colombia and Chile. Pork exports were down 2% at 42,200 MT. China was the top destination at 15,000 MT. Other destinations included Mexico, Japan, South Korea, and Canada.

USDA at the Ag Outlook Forum announced they expect a decline in the US cattle inventory in 2020. USDA expects pork exports to increase 7.38 billion pounds in 2020 due to rising Asian demand.

The country trade started light on Wednesday. By Thursday afternoon 2,800 head has sold in Nebraska, Colorado and Kansas at $119-$120. Which is fully steady to a dollar higher than last week’s weighted average. Iowa saw 200 trade at a $190 on the rail. That is fully steady with last week’s weighted average. Asking prices from the remaining feeders are at $122 live $195 dressed.

Friday afernoon there was just one bid in Iowa at $119 live. It appears most of the trade occurred earlier in the week.

The USDA released its weekly National Retail Meat Price sheet on Tuesday. The 15 cut beef average came in at $5.19 down from last weeks $5.31 and higher than a year ago $5.02. Pork 4 cut average was higher at $3.29 compared to a week ago $3.11 and a year ago $2.98. Chicken 3 cut average was equal to a week ago at $1.59 and lower than a year ago at $1.64.

If your feeling like a steak this week check out bone in Rib Eye’s nationwide the steak averaged $7.26/lb vs. last week’s $8.03 and lower than a year ago $7.92.

Cattle carcass weights last week had steers at 897 lbs up from a year ago of 885 lbs. Hfr carcass weights were 883lbs up from a year ago 820lbs.

The cattle on feed report came in fairly close to analyst estimates. Jerry Stowell of Country Futures shares his thoughts on the report below.

USDA Actual Average Estimate Range
On Feed Feb. 1   102% 102.3% 101.8-103.0%
Placed in December    99% 101.5% 97.8-103.5%
Marketed in December   101% 101.0% 97.6-101.6%

 

Beef Cutout at Midday Friday

Choice up 0.25 204.75

Select unch 201.60

C/S Sperad 3.15

Loads 63

 

Pork

Carcass dn 0.48 62.81

Bellies dn 1.35 67.83

Loads 150

Cattle Slaughter Friday

122,000 hd today  118,000 hd wk ago  115,648 hd yr ago

Saturday

31,000 hd Sat. 28,000 hd wk ago 25,999 yr ago

Hog Slaughter

471,000 hd today 485,000 hd wk ago  474,440 hd yr ago

Saturday

192,000 hd Sat 150,000 hd wk ago 132,861 hd yr ago

 

Grain Settlements 

  • Corn   dn 1/2 – 2 3/4
  • Soybeans dn 1/4 – 2 1/2
  • Chicago Wheat dn 6 1/2 – 9
  • Kansas City Wheat dn 5 1/4 – 6

Livestock Settlements 

  • Live Cattle dn 0.20 – 0.90
  • Feeder Cattle dn 0.42 – 1.37
  • Lean Hogs dn 0.45 +0.15
  • Class III Milk dn 0.16 – up 0.06

 Pre-opening Market Broker  Commentary

Mark Gold, Top Third Ag Marketing, discusses overnight grains and what the trade may see today. Gold likes to see USDA help demand at the Ag Outlook Forum in DC.


Jerry Stowell, Country Futures,  looks at what may impact the livestock futures today. Stowell relays that cash cattle look stronger this week. The lean hog index is also firming.


Mike Zuzolo, Global Commodity Analytics, shares his thoughts on the midday trade factors. The trade has been disrupted by the possibility of a 3rd round of trade aid to farmers.


Closing commentary with John Payne, Daniels Ag Marketing, and Jack Fenske, York Commodities, recaps the days trade.
Payne looks to USDA data as the possible reason for the turning of the bullish mid morning trade.


Cattle on Feed Report February

Kansas Corn is partnering with Renew Kansas to host the Kansas Corn-Fed Ethanol Seminar. Happening on March 4 at American Ag Credit, 4105 N. Ridge Rd., Wichita, this seminar will provide attendees with updates and learning opportunities covering a broad view of the ethanol industry.

 

“With nearly one-third of Kansas corn going directly into ethanol production,” said Kansas Corn Director of Industry Relations Stacy Mayo-Martinez. “It is important for those in the corn and agriculture industry to understand the market, the opportunities and the hurdles to better grasp how it affects Kansas corn prices. This is a unique learning opportunity and we are proud to partner with Renew Kansas.”

 

The seminar will explore ethanol export opportunities; barriers to increased ethanol use and connecting consumers with ethanol blends. A fuel retailer panel and an expert panel on economic impact and plant innovation will round out the seminar.

 

Kansas is a significant ethanol producing state producing about 500 million gallons of ethanol per year and represents a significant market for corn producers. About one-third of Kansas corn is used to make ethanol and DDGS feed, the co-product of ethanol production.

 

Those interested in the event can find more information and register online at https://kscorn.com/cornfedethanol/.

 

Kansas Corn represents corn farmers in Kansas, while Renew Kansas represents the state’s ethanol industry. For more information, visit kscorn.com and renewkansas.com

 

The Livestock Marketing Information Center released Analysis and Comments on the American sheep flock this week and said two “unusual developments could factor into the lamb market calculus during the next 12 to 24 months.”

 

“First, the growth rate of American lamb and mutton imports might moderate significantly as the Australian flock has downsized due to drought, and China imports more-and-more of all animal-based proteins driven by the African Swine Fever epidemic inducing reductions in their pork production,” read the report. “However, in the near-term, the China story has a new dimension of uncertainty with the Novel coronavirus epicenter in Wuhan, China. Second, 2020 brings on line both opportunities and potential disruptions to the sector – the opening of a modern, federally inspected lamb packing plant in Colorado (Colorado Lamb Processors near the town of Brush). That state-of-the-art plant is scheduled to begin harvesting animals late in the first quarter of the year, or early in the second.”

 

“In the face of the developments listed above, for the next two years, annual changes in the supply of American lambs are expected to be rather modest. Importantly, the two unusual developments described above, provide uncertainty regarding how much U.S. prices increase and how volatile markets are.”

 

However, the report concludes with some promising news.

 

“Overall, for the first three quarters of 2020, look for lamb prices (slaughter and feeder) to be at or above 2019. For slaughter lambs, the largest percentage year-over-year gain is expected to be in the first quarter. The second quarter might bring the biggest gain from 2019 for feeder lambs. Note that the first quarter of 2019 had very low slaughter lamb prices compared to the balance of that year. Even though lamb supplies should remain tight during the fourth quarter, the LMIC price forecast incorporates some pressure from competing meats, especially huge pork supplies. Still, lamb prices that quarter might be very close to 2019.”

 

USDA on Tuesday boosted exports for soybeans 50 million bushels (mb) but lowered corn exports 50 mb, despite high sales expectations because of recent trade deals.

USDA increased its forecast for soybean exports by 50 mb to 1.825 billion bushels (bb). Ending stocks, at 425 mb, declined from last month by a corresponding amount and fell within the range of pre-report expectations.

Corn exports were projected at 1.725 bb, down 50 mb from January.

USDA did bump up wheat exports up 25 mb from the January report, to 1 bb

USDA released its February World Agricultural Supply and Demand Estimates on Tuesday as well as its monthly Crop Production report. Traders were closely watching just how USDA might integrate projected exports to China for a few key commodities following the announcement last month of the phase-one trade deal with China that is meant, in part, to boost U.S. agricultural sales to China.

According to DTN Lead Analyst Todd Hultman, Tuesday’s U.S. ending stocks estimates were neutral for corn and slightly bullish for soybeans and wheat; world ending stocks estimates were neutral for corn and wheat, but somewhat bearish for soybeans.

You can access the full reports here:

— Crop Production: https://www.nass.usda.gov/…

— World Agricultural Supply and Demand Estimates (WASDE): http://www.usda.gov/…

CORN

The monthly corn production estimate for the 2019-20 crop was projected at 13.69 bb, the same as January, with a national average yield of 168 bushels per acre, also unchanged.

Exports were lowered 50 mb to 1.725 bb with USDA citing “the slow pace of shipments through January.” USDA increased domestic ethanol use by 50 mb as well, increasing use to 5.425 bb for ethanol for the 2019-20 crop.

Total corn use was projected at 14.07 bb, the same as January, and ending stocks were projected at 1.892 bb, also the same as January. That brings the stocks-to-use ration for the 2019-20 crop at 13.4%.

The average farm-gate price for the 2019-20 crop was pegged at $3.85 a bushel, also unchanged for January.

Globally, USDA slightly lowered global production by a fractional number, but increased global domestic demand by 1.81 million metric tons (mmt). Global ending stocks, less China, were dropped by 970,000 metric tons.

The corn stocks-to-use ratio for the 2019-20 crop year was 13.4%, unchanged from last month.

SOYBEANS

USDA forecast 2019-20 domestic ending stocks at 425 mb, a 50 mb decline from last month based on forecasts for corresponding increase in exports. The agency left production and other demand forecasts unchanged.

The national average farm gate price was lowered by a quarter to $8.75 per bushel.

Globally, USDA revised ending stocks upwards to 98.86 mmt a 2.19 mmt increase. Brazilian production forecasts climbed by 2 mmt to 125 mmt while Argentine production was left unchanged at 53 mmt.

Domestic soybean stocks-to-use for 2019-20 declined to 10.5% from last month’s 11.8% estimate.

WHEAT

Domestic 2019-20 wheat ending stocks were trimmed by 25 mb to 940 mb, a five-year low that came within analysts’ pre-report expectations. That change was driven entirely by an increase of 25 mb in wheat exports, from 975 mb in January to 1 bb in the February report. The agency cited “growing competitiveness in international markets” for that adjustment.

The average farmgate price for wheat was pegged at $4.55 per bushel, unchanged from the January report.

USDA tweaked global ending stocks to 288.03 mmt, just under last month’s estimate of 288.08 mmt and within analysts’ pre-report estimates.

Australian wheat production was left unchanged from the January estimate of 15.6 mmt, despite widespread fires and drought in the country. USDA also left Russian wheat exports at 34 mmt, despite reports that the Russian government would soon restrict exports.

Wheat stocks-to-use declined by 1.7 percentage points to 43.4%.

WORLD PRODUCTION (million metric tons) 2019-20
Feb Avg High Low Jan
CORN
Argentina 50.0 49.8 51.0 48.0 50.0
Brazil 101.0 100.8 101.0 99.0 101.0
SOYBEANS
Argentina 53.0 53.1 54.0 52.5 53.0
Brazil 125.0 123.8 125.0 122.5 123.0
U.S. ENDING STOCKS (Million Bushels) 2019-20
Feb Avg High Low Jan 2018-19
Corn 1,892 1,856 2,017 1,667 1,892 2,221
Soybeans 424 448 586 320 475 909
Wheat 940 953 999 900 965 1,080
WORLD ENDING STOCKS (million metric tons) 2019-20
Feb Avg High Low Jan 2018-19
Corn 296.8 297.5 299.5 295.0 297.8 320.4
Soybeans 98.9 97.2 102.9 94.2 96.7 110.3
Wheat 288.0 287.2 288.8 280.0 288.1 278.1

Heather Ramsey, ARC Group, talks China, Corona Virus, flow, and Brazilian soybeans. The Corona Virus kept the entire market space in a fear grip for most of the trading day. China is considering extending is Lunar New Year celebration in an effort to curb the spread of the virus.  Export inspections were not exciting and mostly expected. Except for wheat which came in below analysts expectations. Brazilian soybean harvest is about 9% behind where it was a year ago.

There are plenty of factors currently impacting the market trade Ramsey shows how timing over historical periods are still very important to a farm marketing strategy.

Ramsey says, “As farmers were worried about protecting from lower prices. We can always handle higher prices by selling more.”

MANHATTAN, Kan. — Six college students selected for the third class of the Kansas Corn Collegiate Academy kicked-off the first of four learning sessions recently. This session, held in Kansas City was focused on trade, consumer education and agronomy.

The Collegiate Academy program is part of an overall effort by the Kansas Corn Growers Association (KCGA) and Kansas Corn Commission to provide opportunities for college students of all majors to learn more about the corn industry, explore issues facing agriculture and discover how they can impact the industry through their future career paths.

“The Collegiate Academy had the opportunity this weekend to explore various aspects of the corn industry from field to end-user,” says Kansas Corn’s Market Development Coordinator, Emily Koop. “During their session they learned the basics of agriculture policy and corn production in the state of Kansas. In addition, they discovered more about the importance of international trade, the logistics and infrastructure utilized for the movement of agriculture commodities and were exposed to a variety of career opportunities available to them in the agriculture industry.”

Students met with leaders from the U.S. Grains Council, BNSF Railway, John Deere, Compass Minerals, and Guetterman Brothers Family Farms. Students also trained on how to tell their story and educate consumers with help from Roots & Legacies Consulting and Bichelmeyer Meats.

Kansas Corn Board Member and Commissioner, Ken McCauley, had a chance to speak with the Collegiate Academy about his operation and the role associations play in policy.

“I enjoyed the opportunity to explain to students the efforts KCGA is taking a variety of policy issues and raise awareness about the issues Kansas corn growers face,” says McCauley. “It’s exciting to see young people in the Collegiate Academy who are eager to learn about corn issues.”

The academy will spend their next session at the capitol in Topeka where they will learn more about the role government plays in the agriculture industry. The third session will be in conducted in western Kansas where participants will learn about livestock, ethanol and water issues. The Collegiate Academy will have their final session in Washington D.C., during the National Corn Growers Association’s Corn Congress.

Kansas college students enrolled in 2-year or 4-year post-secondary schools are eligible to apply. For more information on the collegiate academy and other collegiate programs visit kscorn.com/corn-on-campus.

Full listing of Collegiate Academy Class 3
Shelby Hattrup, Kinsley; agronomy
Austin Hobbs, Fredonia; agronomy
Ellie Katzer, Louisburg; agribusiness
Reile Meile, Ulysses; agribusiness
Zoe Schultz, Grainfield; agriculture communications and journalism and agronomy
Kourtney Weingartner, Topeka; agriculture economics