Risk off was the main sentiment felt by traders all week. The risk off was given momentum by the Corona Virus which continues to spread around the globe with it’s first community spread case in the US. The World Health Organization has officially increased it’s risk assessment of the disease to “very high”. Commodities were not immune to the selling. Crude oil broke through all levels of support and dipped below $45/barrel. Which is big given there is usually bottom buying around the $50/barrel mark. On the week the May corn contract loss 12 1/4 cents. May soybeans lost 5 1/2 cents on the week. May Chicago wheat shed 27 cents over the week. May Kansas City wheat like Chicago wheat fell 23 cents on the week.
At current price levels many analysts wonder what will happen come spring planting. John Payne, Daniels Ag Marketing, believes that bankers will be slow to lend money on corn or soybeans at current prices and this could encourage those acres to other small grains. You can hear his full comments below.
The weather story in Australia may finally be turning. The Australian Bureau of Meteorology is predicting a 70% chance of normal to above normal precipitation over major wheat growing areas from March to May.
Friday was first notice day for the expiring March futures. There were no reported deliveries of corn, Chicago wheat or soybeans.
Wednesday Argentina’s Ag Ministry halted the registration of ag exports. Analysts believe this signals a big rise in export taxes is about to hit the country. The US Dollar is also sinking with the equities and have backed the Dollar down from it’s April 2017 highs.
Not helping the grain bulls was wheat and soybean export sales missed analysts expectations. Wheat came in at 381,000 MT and soybeans 339,000 MT. Soybeans missed the most frugal analysts by about 200,000 MT and China was only 71,000 MT of the sales. Corn export sales were in line at 864,000 MT. Sorghum also hit a marketing year high at 444,500 MT with 324,200 MT bought by an unknown destination.
USDA announced Friday the third flash sale of the month with 135,000 MT of soybean meal being sold to the Philippines.
USDA announced just prior to the open on Wednesday that South Korea is in for 12,300 MT of option origin corn.
Ukraine’s grains exports are up 23.1% for the current marketing year.
It’s common for live cattle prices to be somewhat tied to US Stock Market Equity prices. When the stock market is performing well there is more disposable income which encourages consumers to buy beef. When the DOW saw big daily drops cattle did as well. With the cattle cratering lean hogs were also pulled lower. End of the week cutouts are trying to help get the livestock contracts off the mat as select beef is back above $200 and pork bellies are above $70.
Beef net export sales were at 13,900 MT dn 28% from last week and the 4 week wtd avg. Top buyers included Japan, South Korea, Mexico, and Canada. Beef exports were at 17,800 MT down 1% from the last week and up 2% from the 4 week average. Japan, South Korea, Mexico, Taiwan and Canada were the top destinations.
Pork net export sales were 38,900 MT up 64% from last week and 34% above the 4 week weighted average. Top buyers included Mexico, South Korea and China. Pork exports were at 42,500 MT up 1% from last week and the 4 week weighted average. Top destinations were again China, Mexico, Japan, South Korea and Canada.
Tuesday saw the cattle trade kick off. In the North dressed trade ranged from $185 to $187, mostly $187, roughly $3 lower than last week’s weighted average basis Nebraska. Southern live deals were at $115, generally $5 lower than the prior week’s weighted averages.
Midday Carcass Value Friday
Choice dn 0.24 205.30
Select up 0.86 200.55
C/S Spread 4.75
Carcass up 1.01 65.30
Bellies up 11.72 75.66
- Corn dn 1/2 up 2
- Soybeans dn 2 1/4 – 5 1/2
- Chicago Wht dn 1/4 – 3
- Kansas City Wht up 1 1/4 – 2 1/4
- Live Cattle dn 2.90 up 0.07
- Feeder Cattle dn 1.30 -2.02
- Lean Hogs dn 0.27 -1.30
- Class III Milk dn 0.01 up 0.15
Pre-opening Market Broker Commentary
Dan Obrien, Top Third Ag Marketing, discusses overnight grains and what the trade may see today.
Jerry Stowell, Country Futures, looks at what may impact the livestock futures today.
Mike Zuzolo, Global Commodity Analytics, takes a look at the midday trade. Zuzolo see’s the current market trade as a possible buyers market.
John Payne, Daniels Ag Marketing, looks at the grain settlements.
Jack Fenske, York Commodities, looks at the closing market numbers.