- Input cost worries?
- Tough day in the grains with lower prices
- Huge news week in the U.S. & globally
- With all this outside influence how is that effecting our markets
- What goes up has to come down once & awhile
- Mixed livestock cattle trade
- Lower hogs
- Crop report
- Trying to find levels to ration
- South American weather
- Harvest progress in South America
- Russia trying to slow down quotas
- Livestock structure is changing due to high prices grain
- Contract highs on the livestock
- Markets are closed Monday…but the rest of the world is trading
- How did today’s trade surprise?
- Strong farmer selling…lines at the elevators
- How has the basis changed in the past couple of days?
- Could we continue to go up?
- South American weather
- Ethanol demand?
- Are the grain markets overbought?
- Cattle…where are things at & why not a better run?
The market gets started with a shortened trading week. There was no trade on Monday in the US in observance of Martin Luther King Jr. Day.
The outside equities may have to trade on more stimulus hopes rather than hard data. Tuesday offers no major data releases and President Elect Biden’s Treasury pick, Janet Yellen is expected to make her pitch for the $1.9 trillion dollar stimulus plan to the Senate during her confirmation hearing. President Elect Biden will also be sworn into office on Wednesday.
As for the grain market the Monday overnight trade saw significant pullback in the soybean complex. Meal, oil and soybeans were down nearly 1.5% on most contracts. The pullback comes as weather patterns temporarily improve over parts of Argentina and Brazil. Although a La Nina pattern still seems to be in place over equatorial pacific waters the moisture may be short lived. Harvest is getting underway on the early planted soybeans in Mato Grasso, but the pace is extremely slow. The five year average has harvest pace around 5% complete however it’s estimated only 1% of harvest is complete. Still Stone X analysts believe that Brazil can have 1 MMT of new crop beans to the port for shipment by the end of the month.
Cash trade in the country last week developed on Wednesday following the Fed Cattle Exchange. The South saw trade at $110 to $111, the $111 was early but has been backed down to $110, $1 to $2 lower than last week’s weighted averages.
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 Tuesay
118,000 hd today 118,000 hd wk ago 124,288 hd yr ago
495,000 hd today 496,000 hd wk ago 496,032 hd yr ago
Midday Carcass Value Tuesday
Choice up 2.60 217.64
Select up 0.12 205.96
C/S Spread 11.68
Carcass up 0.07 78.59
Bellies dn 11.33 108.05
- Kansas City
- Livestock Settlements
- Live Cattle
- Feeder Cattle
- Lean Hogs
- Class III Milk
Pre-Opening Market Broker Commentary
Mark Gold, Top Third Ag Marketing, believes grains are due a pullback and it could be happening now.
Jerry Stowell, Country Futures, looks at what may impact the livestock futures today. Livestock will try to rally buyers to create follow through from last Friday.
Mike Zuzolo, Global Commodity Analytics, takes a look at the midday trade. Grains continue to selloff as the market realizes possible demand issues.
John Payne, Daniel’s Ag Marketing, takes a closer look at today’s grain close. Payne is not concerned with the recent pullback in grains. The long term picture is still inflationary and bullish.
Jack Fenske, York Commodities, looks at the closing market numbers.
Higher priced corn early in the week brought some emotion into the trade. Will we see cattle sell quicker? Demand for meat both in home & at restaurants has been good. This weeks Cattle Call looks at this and more with Brad Kooima.
- Return of the emotions of the markets yesterday
- Wheat still dealing with Russia
- Is there a big reversal in the weather pattern at the end of this month for South America?
- USDA numbers pretty close to StoneX numbers
- Sept 1 corn stalk numbers were adjusted as well this week
- Higher corn-how have cattle been reacting?
- WASDE Report
- How did the USDA get to those USDA numbers?
- What will the overnight & Wednesday trade be like?
- Corn/Bean/Wheat info
- How will livestock continue to react?
USDA today released its January Crop Production, World Agricultural Supply and Demand Estimates (WASDE), Quarterly Stocks and Winter Wheat Seedings reports.
WHEAT: The outlook for 2020/21 U.S. wheat this month is for stable supplies, higher domestic use, unchanged exports, and lower ending stocks. Feed and residual use is raised 25 million bushels to 125 million on lower-than-expected second-quarter stocks reported in today’s NASS Grain Stocks report. Seed use is up 1 million bushels to 63 million, reflecting 2020/21 wheat planted area released today in the NASS Winter Wheat and Canola Seedings report. Projected 2020/21 ending stocks are reduced 26 million bushels to 836 million, down 19 percent from last year. The season-average farm price is raised $0.15 per bushel to $4.85 based on NASS prices reported to date and expectations for futures and cash prices
for the remainder of the marketing year.
The 2020/21 global wheat outlook is for smaller supplies, increased consumption, higher exports, and reduced stocks. Supplies are lowered 1.6 million tons to 1,072.7 million on reduced production in China and Argentina more than offsetting an increase for Russia.
Corn sent to limit gains following USDA data drop Tuesday | Jeff Peterson – Heartland Farm Partners
China’s production is reduced 1.8 million tons to 134.3 million on the National Bureau of Statistics estimate. Russia’s production is raised 1.3 million tons to a new record of 85.3 million, based on estimates from Russia’s statistical agency Rosstat, surpassing the 2017/18 crop. Argentina’s production is reduced 0.5 million tons to 17.5 million on updated harvest results to date and this would be Argentina’s smallest crop in five years. World 2020/21 consumption is increased 1.8 million tons to 759.5 million, mostly on higher feed and residual use for China and the United States and greater food, seed, and industrial (FSI) use for Russia. Continued high domestic corn prices in China are expected to result in further wheat feed use as projected 2020/21 wheat feed consumption is raised 1.0 million tons to 25.0 million, up 32 percent from last year. Russia’s FSI consumption is raised 500,000 tons to 23.5 million with greater supplies.
COARSE GRAINS: This month’s 2020/21 U.S. corn outlook is for lower production, reduced corn used for ethanol, smaller feed and residual use and exports, and decreased ending stocks. Corn production is estimated at 14.182 billion bushels, down 324 million on a lower yield and slight reduction in harvested area.
Total corn use is down 250 million bushels to 14.575 billion. Exports are down 100 million bushels, reflecting sharply lower supplies and higher expected prices. Corn used for ethanol is lowered, based on data through November from the Grain Crushings and Co-Products Production report and weekly ethanol production during December as indicated by the Energy Information Administration. Feed and residual use is reduced 50 million bushels to 5.650 billion, based on indicated disappearance during the September-November quarter. With supply falling more than use, corn stocks are lowered 150 million bushels to 1.552 billion. The season-average corn price received by producers is raised to $4.20 per bushel.
Sorghum production is estimated 2 million bushels higher as increased harvested area more than offsets a reduction in yield. Food, seed, and industrial use is lowered 10 million bushels on lower sorghum used for ethanol. Exports are raised 15 million bushels reflecting larger exports to China.
Global coarse grain production for 2020/21 is forecast down 9.3 million tons to 1,438.5 million. This month’s foreign coarse grain outlook is for lower production and consumption, and smaller ending stocks. Foreign corn production is reduced with declines for Argentina and Brazil more than offsetting increases for China and India. For Argentina, dryness during December reduces yield prospects for early-planted corn in key central growing areas. Brazil is lowered reflecting reduced yield expectations for first-crop corn in southern Brazil.
OILSEEDS: U.S. oilseed production for 2020/21 is estimated at 122.4 million tons, down 1.25 million from the previous report. Smaller soybean, peanut, and cottonseed crops are partly offset by an increase for canola and sunflower seed. Soybean production is estimated at 4.135 billion bushels, down 35 million led by reductions for Minnesota, Iowa, and Kansas. Harvested area is estimated at 82.3 million acres, up slightly from the previous report. Yield is estimated at 50.2 bushels per acre, down 0.5 bushels. With higher imports and slightly higher beginning stocks, soybean supplies are down 14 million bushels from last month.
The soybean crush forecast is raised 5 million bushels to 2.2 billion, reflecting improved prospects for soybean meal exports with a lower export forecast for Argentina. The soybean export forecast is raised 30 million to a record 2.23 billion bushels. With lower supplies and increased use, ending stocks are projected at 140 million bushels, down 35 million from the previous forecast.
Soybean and soybean product prices are forecast higher this month. The U.S. seasonal average soybean price for 2020/21 is projected at $11.15 per bushel, up 60 cents as cash prices in Central Illinois reach 6-year highs. The soybean meal price is projected at $390 per short ton, up 20 dollars. The soybean oil price is forecast at 38.5 cents per pound, up 2.5 cents.
Foreign 2020/21 oilseed production is relatively unchanged, with higher sunflower seed mostly offset by lower soybean, cottonseed, peanut, rapeseed, and palm kernel output. Sunflower seed production is increased 0.5 million tons to 13.5 million for Russia based on recent government estimates. Soybean production is lowered 2 million tons to 48 million for Argentina and 0.2 million to 2.2 million for Uruguay, reflecting dry weather conditions in December and early January. Mostly offsetting lower South American soybean production is a 2.1-million-ton increase to 19.6 million for China on recent government data. Global soybean stocks are lowered 1.3 million tons to 84.3 million, with lower stocks for Argentina and the United States that are partly offset by higher stocks for China.
LIVESTOCK, POULTRY, AND DAIRY: The 2020 total red meat and poultry production estimate is reduced from last month. The beef production estimate is reduced on lower cattle slaughter. The pork production estimate is reduced as the slower pace of slaughter in late 2020 more than offset heavier carcass weights. The broiler production estimate is reduced on recent hatchery and slaughter data, while the turkey production estimate is lowered or recent production data. The egg production estimate is unchanged.
For 2021, the total red meat and poultry production forecast is lowered from the previous month as lower expected beef, broiler, and turkey production more than offsets higher pork production. Lower expected placements in late 2020 will impact fed cattle supplies in mid2021. Cattle carcass weights are forecast lighter for 2021. USDA will release its semiannual Cattle report on January 29, providing estimates of heifers held for breeding and an insight into the number of feeder cattle available for placement during 2021.
The pork production forecast for 2021 is raised from the previous month as higher expected hog slaughter more than offsets lighter expected carcass weights. Broiler, turkey, and egg production forecasts are lowered for 2021 as higher feed costs are expected to slow production growth.
The beef import estimate for 2020 is reduced on recent trade data while the 2021 import forecast is reduced primarily due to lower expected imports from Australia. Beef exports for 2020 and 2021 are raised from last month. Pork exports for 2020 and 2021 are lowered from last month on weaker import demand from key trading partners. The 2020 broiler export estimate is raised on recent trade data, but no change is made to the 2021 export forecast.
Livestock and poultry price estimates for 2020 are adjusted to reflect December price data. For 2021, cattle prices are raised on a lower production forecast. The 2021 hog price forecast is raised, reflecting strong domestic demand. Broiler prices are raised as lower forecast production in the second half of the year is expected to support firmer prices.
Mike Zuzolo breaks the report down here:
- Report heading into tomorrow
- Reason for the pullback in the grains today
- What could they tell us?
- Ethanol margins remain soft
- Basis price
- Missouri River levels
- Current but slower on the slaughter
- COVID-19 vaccines
- Broad overview of the grain markets
- Look ahead to the USDA report of Tuesday
- One day lower trade this week
- Where have we gone in the last month of trade?
- Are $14 beans possible?
- Wheat has not had a lot of cold weather scares
- Lower livestock…did the south sell to soon?