Tag Archives: Market Commentary

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