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THE LAND — SEPTEMBER 4/SEPTEMBER 11, 2020
MARKETING
Grain Outlook Corn sale to China boosts price, but it didn’t last
Livestock Angles Glut of animals holding down livestock prices
The following marketing weekly 4 mmt offered at aucAs the month of August The export market has been analysis is for the week endtion was not fully subscribed. comes to a close, the livestock a bit busier; which has helped ing Sept. 3. Only one-third of the amount markets appear to be changprices of beef advance in was sold, but this may be ing their current upward recent weeks. However, with CORN — An exciting start because no cheaper 2015 corn price trends. Fundamental schools not opening because to the week as we closed out was included. Higher priced changes in supplies in all facof the Covid virus, the school August; and December corn 2016-2018 corn was in the ets — for both cattle and hogs lunch demand for meat is soared to take out the July auction. China has sold 56.8 — halted the recent rallies likely to drop off to some double top at $3.63 and surmmt of reserve corn this year experienced over the past 30 degree. At this time it doesn’t passed the 200-day moving appear to be much more than JOE TEALE average for the first time PHYLLIS NYSTROM compared to 21.1 mmt last days. year by this time. a correction after a couple of CHS H edging Inc. Broker since October. December ran The supplies beef — and months of increased prices in S t. Paul Great Plains Commodity to a high of $3.64.25 — its Weather talk has already particularly the supplies of all areas of the trade. Afton, Minn. highest since March. begun to turn toward frost pork — have cast a negative Disappointing weekend rain prospects. Current forecasts shadow over the futures and The hog market appears to inspired the jump which was then for Sept. 8-12 suggest the potential for a cash markets during the last part of have a similar fate as the cattle maraided by a 23.5 million bushel corn sale hard frost in parts of Minnesota, North the month of August. Also, the recent ket: lower prices in the weeks ahead. to China. However, the surge didn’t Dakota and western Nebraska (subject supply numbers of either cattle on feed The pork cutout seems to be struggling last, and we closed near the day’s low. to change). Along with the cold front or the hog inventory reports have indi- at the present time as prices have gone Sept. 1 brought an identical sale to will come higher chances for rain, that cated bigger numbers available for sideways recently. The futures market China, but even that wasn’t enough to may delay harvest starts in Nebraska. slaughter for both. Unless we see an suffered a weekly reversal during the bring buyers into the market. Through At this point, additional rainfall will be increase in demand for either beef or last full week of August which normalpork, one might conclude that weaker ly signals an end to the trend — which Sept. 3, China has purchased approxi- of small use to maturing crops. mately 343.7 million bushels for the Brazil did not renew their zero-tariff prices for both cattle and hogs might be had been up. Therefore, at minimum, there should be a short-term correction 2020-21 crop year and is likely higher quota for ethanol imports. The 198 mil- imminent. depending on how many sales to lion gallon zero-tariff quota was used The cattle market has seen a slow- in both cash and futures over the next unknown will eventually end up being nearly exclusively for U.S. ethanol down in the movement of beef the past week or so. to China. imports. They are considering re-imple- several weeks and the futures market If demand for pork remains strong menting the zero-tariff quota for three has reacted with a sell-off in the past during that period it should help keep Is China facing a corn shortage? A months, but all U.S. ethanol imports are couple of weeks. The sluggish action in the correction in prices to a minimum. Reuters survey of analysts feels China could experience a corn deficit in the currently subject to a 20 percent tariff. the futures trade and the packers back- The real negative to the market at the coming year of up to 30 million metric Brazil reportedly is wanting to renego- ing down their bids for live inventory present time is the amount of pork in tons (1.18 billion bushels). China’s low- tiate trade terms with the United States seem to have cast a slightly negative cold storage. There will have to be a attitude as we move into the month of decrease in that cold storage number to tariff quota for corn is 7.2 mmt (283.5 on imports of Brazilian sugar. September. halt the negative outlook for hog prices million bushels) but is expected to be See NYSTROM, pg. 9 and to end the current push toward exceeded for the first time. There are lower levels. v estimates China could import up to 15 mmt of U.S. corn (590 million) with 9 to 10 mmt already on the books to either China or unknown destinations. corn/change* soybeans/change* St. Cloud $3.06 +.11 $8.98 +.48 Food inflation is the highest in the 10 Madison $3.07 +.14 $9.01 +.53 years and state reserve stocks are Redwood Falls $3.08 -.01 $9.04 +.54 believed to be minimal as corn prices in China’s breadbasket hit five-year highs Fergus Falls $2.92 +.09 $8.93 +.53 in late August. China’s agriculture min Morris $2.97 +.10 $8.97 +.52 ister projects 2020-21 corn production Tracy $3.05 +.14 $8.99 +.53 of 266.5 mmt with ending stocks at a Average: $3.03 $8.99 negative 16.7 mmt. Other grains could fill part of any feed shortfall, including Year Ago Average: $3.27 $7.64 barley, sorghum or feed wheat. China is Grain prices are effective cash close on Sept. 8. urging citizens to limit food waste. *Cash grain price change represents a two-week period. For only the second time ever, China’s
Cash Grain Markets
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Information in the above columns is the writer’s opinion. It is no way guaranteed and should not be interpreted as buy/sell advice. Futures trading always involves a certain degree of risk.
