Tag Archives: markets

Summary

Grains, livestock and the general commodity sector turned risk off Friday at the close. The Corona Virus with it’s second confirmed case in the US has traders running for safe havens like the US dollar, Japanese Yen and gold. John Payne, Daniels Ag marketing, believes the hype is somewhat over done and if recent headline trading is any indication markets will return in the coming weeks.

In the grains it has  been one week since the US and China signed the Phase One Trade Deal and there have been no major purchases of commodities from China since the signing. This has the market in slow erosion, but traders are hesitant to build up short positions as the market could quickly come back on news of Chinese purchases.

Thursday saw 3 different sales of corn. USDA reported sales of a 114,000 tons of corn to unknown, 29,724 tons to Guatemala, and 114,224 tons to Guatemala. Many traders hope that the unknown destination was China though some believe it could be South Korea.

Friday morning saw a sale of 142,428 tons of corn sold to unknown.

South American weather is dry and helping soybean harvest. Agroconsult reported earlier in the week that farmers in Mato Grosso are positively surprised with soybean yields this harvest.  Dry conditions though are not helping the corn in Argentina. The Euro model is showing above average dryness for the next 2 weeks in South America.

The outbreak of the corona virus in China and now two confirmed cases in the US has the outside and currency markets spooked. China is trying to stop the spread of the virus by outlawing the selling of live poultry in key provinces. The Chinese government is also canceling public events like the Chinese New Year Temple fairs. This could dampen some of it’s overall Lunar New Year Pork demand. International companies such as McDonald’s and Disney are closing Chinese locations to try and curb the spread of the virus.

On Thursday the weekly ethanol production and stocks were released. Ethanol production fell 4.2% or about 46,000 barrels per day to 1.049 mln b/d. That is a nine week low in US ethanol production. The four week average of ethanol production is 1.068 mln b/d.

Ethanol stocks jumped 4.5% to their highest levels since July 2019 at 24 mln barrels.

Live cattle and feeder cattle prices slowly eroded through midweek, but then saw a sell off start on Thursday with near limit lower losses in live cattle futures. Lean hog futures seemed to catch the buying end of the live cattle spread and steadily moved higher throughout the week. Both the beef cutout and pork cutout strengthened throughout the week. The choice select spread finally opened to more than two dollars. Bellies seem to be the strongest part of the pork cutout nearing $120.

In the country feeders set the asking prices early in the week at $127 live and $202 dressed. Packer inquiry kicked off Wednesday afternoon with 3,000 head trading in Kansas at $124 live. Thursday then saw another 1,500 head trade in Nebraska at a $124. Bids were limited on Thursday with only a few dressed bids in Nebraska at a $199.

Analysts point to packers buying on Wednesday as a possible signal that they are short bought and are needing cattle. That could  mean another week of steady prices. However packer margin has eroded and this could cause packers to not run plants at full capacity.

Hog prices in China are up over 450% compared to US hog prices. The Corona Virus is causing major cities in China to go on lock down and cancel many public events.

The latest cold storage reports show beef, pork, chicken, and turkey in cold storage is up 3.2% compared to the same month last year and is 7.7% higher than the 5 year average.

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 Friday

Choice dn 0.54 214.78

Select dn 0.76 210.44

C/S Spread 4.34

Loads 56

Pork

Carcass dn 1.24 77.60

Bellies up 0.13 115.52

Loads 119

Cattle Slaughter

hd today   hd wk ago   hd yr ago

Hog Slaughter

hd today   hd wk ago    hd yr ago

Grain Settlements

  • Corn  dn 3 1/2 – 6 1/2
  • Soybeans dn 4 1/2 – 8 1/2
  • Chicago Wheat  dn 4 3/4 – 7
  • Kansas City Wheat dn  5 1/4 – 6 1/4

Livestock Settlements

  • Live Cattle dn 0.37  up 0.17
  • Feeder Cattle dn 0.42 – 0.97
  • Lean Hogs dn 0.90 – 1.90
  • Class III Milk dn 0.08  up 0.05

 Pre-opening Market Broker  Commentary

Dan Smith, Top Third Ag Marketing, discusses overnight grains and what the trade may see today.

Jerry Stowell, Country Futures, discusses factors influencing the livestock trade today.


Mike Zuzolo, Global Commodity Analytics, shares his thoughts on the midday trade factors.

Closing Market Broker Commentary

Closing commentary with John Payne, Daniels Ag Marketing, and Jack Fenske, York Commodities.

MANHATTAN, Kan. — Six college students selected for the third class of the Kansas Corn Collegiate Academy kicked-off the first of four learning sessions recently. This session, held in Kansas City was focused on trade, consumer education and agronomy.

The Collegiate Academy program is part of an overall effort by the Kansas Corn Growers Association (KCGA) and Kansas Corn Commission to provide opportunities for college students of all majors to learn more about the corn industry, explore issues facing agriculture and discover how they can impact the industry through their future career paths.

“The Collegiate Academy had the opportunity this weekend to explore various aspects of the corn industry from field to end-user,” says Kansas Corn’s Market Development Coordinator, Emily Koop. “During their session they learned the basics of agriculture policy and corn production in the state of Kansas. In addition, they discovered more about the importance of international trade, the logistics and infrastructure utilized for the movement of agriculture commodities and were exposed to a variety of career opportunities available to them in the agriculture industry.”

Students met with leaders from the U.S. Grains Council, BNSF Railway, John Deere, Compass Minerals, and Guetterman Brothers Family Farms. Students also trained on how to tell their story and educate consumers with help from Roots & Legacies Consulting and Bichelmeyer Meats.

Kansas Corn Board Member and Commissioner, Ken McCauley, had a chance to speak with the Collegiate Academy about his operation and the role associations play in policy.

“I enjoyed the opportunity to explain to students the efforts KCGA is taking a variety of policy issues and raise awareness about the issues Kansas corn growers face,” says McCauley. “It’s exciting to see young people in the Collegiate Academy who are eager to learn about corn issues.”

The academy will spend their next session at the capitol in Topeka where they will learn more about the role government plays in the agriculture industry. The third session will be in conducted in western Kansas where participants will learn about livestock, ethanol and water issues. The Collegiate Academy will have their final session in Washington D.C., during the National Corn Growers Association’s Corn Congress.

Kansas college students enrolled in 2-year or 4-year post-secondary schools are eligible to apply. For more information on the collegiate academy and other collegiate programs visit kscorn.com/corn-on-campus.

Full listing of Collegiate Academy Class 3
Shelby Hattrup, Kinsley; agronomy
Austin Hobbs, Fredonia; agronomy
Ellie Katzer, Louisburg; agribusiness
Reile Meile, Ulysses; agribusiness
Zoe Schultz, Grainfield; agriculture communications and journalism and agronomy
Kourtney Weingartner, Topeka; agriculture economics

Cattle saw a massive amount of fund buying on Friday.  Interesting that beef had the biggest reaction to the news about China.  Already some longs going into Friday.  Fundamentals of the cattle-weights are higher than a year ago.  Producer is asking for higher money.  Could we see some higher money in this last full trading week of 2019?  Is there some bullish feelings in cattle & are hogs too cheap?  Corn to see a rally?   Beans take a jump in the markets.  Wheat is the easiest most exportable item.  Some general comments about China.