Tag Archives: soybeans

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.

China’s purchases of U.S. pork and soybeans rebounded in November and December, ahead of today’s (Wednesday’s) signing of the phase one trade agreement between the two nations.

Reuters reports that Chinese agricultural imports from the United States were at 14.1 billion yuan, or $2 billion, in December. A Chinese customs spokesperson says the increase in imports of soybeans and pork comes as “positive U.S.-China trade sentiment has boosted companies’ confidence in December.” African swine fever has severely reduced China’s hog herd, the world’s largest producer and consumer of pork.

China has since increased exports of U.S. pork to record levels. Pork exports to China and Hong Kong were up 49 percent in value at $1.18 billion from January to November 2019. Consumer prices for pork in China nearly doubled since the initial outbreak of African swine fever, and efforts to rebuild the hog herd in China are slow going. China has also released frozen pork from state-owned reserves to help ease the situation for consumers.

President Donald Trump says he’ll sign the first phase of a trade deal with China at the White House on Jan. 15.

Trump says Tuesday on Twitter that he’ll then travel to Beijing at a later date for talks aimed at reaching agreement on outstanding sticking points in the U.S.-China trade relationship.

In the deal reached earlier in December, the U.S. agreed to reduce tariffs on China and China agreed to buy larger quantities of U.S. farm products, such as soybeans. Remaining sticking points would be worked out during a second round of trade talks.

What do U.S. soybean farmers and global aquaculture have in common? Quite a bit, actually, especially in helping to make fish farming more sustainable and scalable.

Working towards Sustainability in Global Fish Farming

For nearly 30 years, the U.S. Soybean Export Council’s (USSEC) aquaculture program, funded by the soybean checkoff, has provided critical training and technical knowledge for global aquaculture — ranging from small family fish farms in Asia to large international operations that provide fish for your local supermarket and large global retailers like Costco and Walmart.

Beginning in the 1990s, the program worked to transition Chinese fish farms from manure-based feed to formulated pellet feed, and over the years has provided training to improve feed and farming methods that improve food safety and sustainability, while lessening environmental impact.

Four Areas of Focus Help to Shape Sustainable Aquaculture

In aquaculture, USSEC focuses on four areas: feed, technology advancements, aquaculture investment, and sustainability. USSEC works to optimize and demonstrate the value of U.S. Soy through all of these efforts. Let’s take a look at each.

Feed: USSEC’s technical experts work with feed mills and farmers to develop feed formulations, feed demonstrations, and best feed practices. USSEC’s partnership with business and academia on the International Aquaculture Feed Formulation Database provides valuable training for feed formulators. And aquafeed formulation research made possible by soy industry support is archived for public use.

Technology Advancements:  Hatchery improvements, genetic/breeding advancements, and the In-pond Raceway System (IPRS) technology transfer ensure better fish health and safety, water conservation, less environmental impact and higher yields. USSEC holds educational field trips and seminars to share best practices of successful farms.

Aquaculture Investment:  U.S. Soy’s renowned Aquaculture Investment Workshops promote investment in aquaculture infrastructure in Latin America so that industry can expand to meet global demand.

Sustainability:  All of the U.S. Soy aquaculture program’s initiatives are based on making global aquaculture more sustainable. The U.S. Soy Sustainability Assurance Protocol (SSAP) allows for soy feed ingredients to be certified sustainable, and USSEC works closely with aquaculture sustainability certification programs such as BAP and ASC so that the SSAP is accepted as a standard for sustainable soy.

U.S. Soy: A Sustainable Alternative

High quality U.S. soybeans help to increase the affordability and sustainability of the world’s supply of healthy, farm-raised seafood and can replace much of the fishmeal in feeds for many farmed species, thus reducing the pressure on wild fish resources.