Tag Archives: soybeans

Summary

The future has finally come to fruition this week as the Biden Administration takes the oath and officially assumes the Presidency.

It’s Inauguration day and the markets are mixed. The incoming Biden Administration is appearing hawkish against China. This comes as the departing Trump Administration places a strong denouncement of China.

The outside equities are excited for today as President Biden is expected to quickly rollout a strong stimulus plan. All the information around the stimulus plan to this point has been that it will be around 10% of the US GDP or 1.95 trillion dollars. Even with this strong shot into the economy there is no plan for the Federal Reserve to back down from their current stimulus plans. The Fed is  currently pumping $120 billion per month into the economy. That makes the Fed balance sheet $7.3 billion, up 77% over the past year. M1 money supply is at $6.7 billion, up 70% year-on-year. The nation’s fiscal debt sits at $27.8 trillion. It’s that fear of debt overload that is keeping equities in check.

In the grain market the current strong sentiment against China and a slowly starting South American harvest have the bulls pairing gains and taking profits. The Tuesday overnight trade saw strong volume with the March corn contract trading 48,000 contracts and March soybeans traded 67,000 contracts. Unfortunately it was to the downside. The recent downturn has taken much of the gain away that was created following the January WASDE report.

The Biden Administration is starting off hawkish with Treasury Secretary pick Janet Yellen saying she would take a stiff stance against China in her senate confirmation hearing. The Trump Administration also had one strong outgoing message for China as the State Department labeled the Chinese government’s policies targeting ethnic Uighur Muslims and other minorities in the northwest region of Xinjiang as “genocide.” China’s foreign ministry has already fired back telling AP, “Outgoing U.S. Secretary of State Mike Pompeo is a “doomsday clown” and his designation of China as a perpetrator of genocide and crimes against humanity was merely “a piece of wastepaper.”

All of this rhetoric though may sour China from continuing purchases of US commodities in the near term. China did purchase 132,000 MT of soybeans on Tuesday in a USDA flash sale. China was also the destination for 46.8 million bushels of US soybeans last week. Not helping China stop buying from the US is the South American supply is still slow in coming to the ports. Mato Grasso Brazil’s soybean harvest as of Monday was estimated to only be 1% complete. That was 4% behind the 5 year average. Argentina is now experiencing a truck driver strike and Stone X is reporting that only 10% of the normal truck traffic is moving commodities to the ports in Argentina.

Cash cattle started to trade in Kansas and Texas after the Fed cattle exchange with live cattle trading at $110.

The Fed Cattle Exchange Auction today listed a total of 1,547 head, of which 567 actually sold, 980 head were listed as unsold, as they did not meet the reserve prices, that ranged from $110 to $112. Opening prices ranged from $108 to $109, high bids ranged from $110.50 to $111. The state by state breakdown looks like this: KS 299 total head, all 299 head sold at $110.75(grid based); TX 1,248 total head, with 268 head sold at $110.50-$111.00(live), 980 head went unsold.

For the week ending January 09, 2021, Imported Beef Passed for Entry in the U.S. totaled 34,280, 133.91% of the previous week and 109.63% of the 4-week average.

Expected Slaughter numbers Thursday

120,000 hd today 115,000 hd wk ago 122,229 hd yr ago

Hogs

497,000 hd today 496,000 hd wk ago 491,081 hd yr ago

Midday Carcass Value  Thursday

Beef

Choice up 2.48 221.39

Select up 3.01 210.29

C/S Spread 11.10

Loads 70

Pork

Carcass up 4.96 83.98

Bellies up 17.42 130.63

Loads 156

Grain Settlements

  • Corn dn 1/4 up 3
  • Soybeans dn 3 1/4 up 2 3/4
  • Chicago dn 2 – 7
  • Kansas City dn 3/4 – 1 1/4
  • Livestock Settlements
  • Live Cattle up 0.37 -1.07
  • Feeder Cattle up 0.40- 1.62
  • Lean Hogs dn 0.32 up 0.82
  • Class III Milk dn 0.33 – 0.63

 

Pre-Opening Market Broker Commentary

Mark Gold, Top Third Ag Marketing, highlights that grains were able to find buyer support after several down days.


Jerry Stowell, Country Futures,  looks at what may impact the livestock futures today. Cattle could hit another round of selling as cash develops steady with last week.


Mike Zuzolo, Global Commodity Analytics, takes a look at the midday trade. Grains are trying to come back at the midday, but wheat is leading the market lower.


John Payne, Daniel’s Ag Marketing, takes a closer look at today’s grain close. Grains end mixed, but with long term friendliness.


Jack Fenske, York Commodities, looks at the closing market numbers. Corn finally makes small gains in the day trade.

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:

 

Arlan Suderman, Chief Economist for Stone X, joins the Fontanelle Final Bell midweek just ahead of the December WASDE report. Suderman highlights that the December report from USDA and World Outlook Board is usually a boring report. Being 2020 though December has the possibility to hold both bullish and bearish surprises. Ending stocks will be key to the report. Especially for soybeans with most analyst estimates ahead of the report showing soybeans below 170 million bushels.

Outside of the WASDE report traders continue to closely watch South American weather. Suderman brings to date the latest weather patterns over Brazil and Argentina. Along with the reality of what a dry pattern actually looks like in South America.

Suderman briefly touches on why the US Dollar Index is climbing with the Euro falling. Brexit is about to go from nice to messy and it’s not good for the Euro.

The final topic lands in livestock with Suderman highlighting China’s latest high rise hog farms. On the outside these hog farms appear to be a solid step in increasing Chinese pork production. However this system could have an Achilles heel given the tight concentration of hogs and the high pathological movement of African Swine Fever.

You can listen to the entire Fontanelle Final Bell here: