Grains and most of the broader commodity sector traded risk off Wednesday. Kansas City wheat was the leader to the down side with the March contract closing ten cents lower. Corona Virus selling seems to be back in full force as traders look for how much demand the virus could destroy.
According to Bloomberg the US is now the cheapest market in the world for corn and may be the only market with ample and market ready supplies.
The latest news points to the Corona Virus killing 130 worldwide and has more than 50 million people under travel bans in China. Chinese government is extending the Lunar New Year holiday to try an curb the spread of the virus. With the holiday extended Chinese markets will remain closed and the possibilities of China making any US commodity purchases are low. Mike Zuzolo, Global Commodity Analytics, believes the seriousness of the Corona Virus is emerging as China announced the virus may impact their GDP growth in the near term. You can hear Zuzolo’s full comments below.
USDA is reported a sale of 124,355 MT of corn sold to Mexico Tuesday morning.
USDA is reported sales of 142,428 MT of corn sold to unknown on Monday.
USDA also reported a sale of 111,252 MT of corn sold to Japan for the 2020-2021 marketing year on Monday.
USDA-NASS announced dropping conditions of hard red winter wheat. Kansas went from 40% good to excellent last month to just 34% good to excellent this week.
USDA-NASS are reporting that North Dakota has only harvested 49% of their corn crop. Based of FSA acreage numbers that would leave nearly 1,747,000 acres of corn in North Dakota unharvested.
The Association of American Railroads released the latest the weekly rail car loading numbers on Wednesday. The report showed all rail traffic down 7.1%. Coal again took the brunt of the downside dropping 17.4% weekly rail traffic. From a negative last week grain car rail traffic tipped up 1.3% to nearly 22,000 rail cars loaded.
Livestock once again turned red on Wednesday. Early in the trade live cattle and feeder cattle futures tried to mount a rally, but it was short lived. Lean hogs were the leader to the down side nearing a limit lower move on the April contract.
Bids and asks are starting to emerge in the country. Packers are bidding $121 live in Nebraska, Kansas, and Texas. Dressed bids are at $194 in Nebraska and $195 in Colorado. Feeders are currently asking $125 live and $201 dressed.
The pork carcass is nearing it’s resistance point of $80 and bellies are back above $100 this could help lend more support to the lean hog complex.
Retail meat prices are mixed this week. According to USDA data the top 15 cut average for beef is $5.01/lbs compared to $5.44/lbs last week and $4.96/lbs a year ago. Pork 4 cut average is $3.15/lb compared to $3.00/lb last week and $3.14/lb last year. Bacon prices are $4.79/lbs compared to $4.73/lbs a week ago and $4.90/lbs a year ago. Chicken 3 cut average was $1.56/lbs compared to $1.69/lbs last week and $1.78/lbs a year ago.
The USDA cattle on feed numbers for January were closely aligned with pre-report expectations. Jerry Stowell, Country Futures, said, “If you were looking for a surprising USDA report you are going to have to look else where this report is very neutral.” Listen to Jerry’s full comments below.
|USDA Actual||Average Estimate||Range|
|On Feed Jan. 1||102%||102.2%||101.6-102.5%|
|Placed in December||103%||103.2%||100.5-105.3%|
|Marketed in December||105%||105.2%||103.9-105.8%|
Beef Cutout at Midday Wednesday
Choice up 0.98 213.83
Select dn 0.13 212.03
C/S Spread 1.80
121,000 hd today 123,000 hd wk ago 112,060 hd yr ago
498,000 hd today 498,000 hd wk ago 112,060 hd yr ago
- Corn dn 2- 2 3/4
- Soybeans dn 3/4 – 2
- Chicago Wheat dn 6 1/4 – 7 1/2
- Kansas City Wheat dn 8 1/2 – 10
- Live Cattle dn 0.40 – 0.55
- Feeder Cattle dn 0.42 – 0.90
- Lean Hogs dn 1.37 – 2.47
- Class III Milk up 0.02 – 0.25
Pre-opening Market Broker Commentary
Mark Gold, Top Third Ag Marketing, discusses overnight grains and what the trade may see today. The US Dollar is near multi year highs on Corona Virus buying, but Gold says there is some fund money looking for a new home and it very well could be commodities.
Jerry Stowell, Country Futures, discusses factors influencing the livestock trade today. With the recent weakness in cattle futures Stowell is concerned feeders may be willing to sell at lower cash.
Mike Zuzolo, Global Commodity Analytics, shares his thoughts on the midday trade factors.
Closing commentary with John Payne, Daniels Ag Marketing, and Jack Fenske, York Commodities.
Jerry Stowell, Country Futures, breaks down the cattle on feed report.