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THE LAND — SEPTEMBER 18/SEPTEMBER 25, 2020
MARKETING
Grain Outlook Chinese corn imports exceeding early estimates
Livestock Angles Livestock markets overbought, short-term correction looming
The following marketing Watch South American The overall trend in liveappreciation. Therefore, the analysis is for the week ending weather. Dryness in stock futures over the past short-term outlook is for corSept. 18. Argentina may push some several months has been rective action with the longer growers to plant later corn in higher since April. The recovterm outlook still indicating CORN — Demand and November and December ery has been methodical and positive price appreciation. money, money and demand. instead of beans in October. fairly persistent during this This would indicate a roller That pretty well summarizes This gives them longer to push to higher prices in all coaster outlook for the next what has been occurring in wait for rain before making a livestock contracts. It now few months in the cattle marboth the corn and soybean final planting decision. looks as if this recovery periket. markets for the last few JOE TEALE However, rains are expected od is beginning to meet some PHYLLIS NYSTROM weeks. Corn followed soyLately the hog market has Broker in the driest areas of resistance as markets appear CHS Hedging Inc. beans higher this week as we been on rampage to higher Argentina late next week. to be at levels where these Great Plains Commodity levels as demand for pork has St. Paul push toward harvest. Some Afton, Minn. Argentina’s corn planting markets are technically overareas have begun, and early elevated the prices the packhas gotten off to a quick start bought. Therefore, some correports are a little better than ers are willing to pay. This has brought expected. It’s too early to have confi- with planting 10 percent complete vs. 5 rective type action maybe in the offing the lean index over the $60 cwt. for the in the near future in all of these mar- first time in months. dence if this will persist. The forecast percent average. looks favorable for harvest through the Weekly export sales were large, as kets. The good news is that the correcAnother interesting event was the end of the month. December corn expected. Sales were 63.4 million bush- tive action is not likely to be very fact that the lean index went from a teased participants early in the week els, bringing total commitments to severe and not long in duration at this premium to the futures to a discount in with a small decline, but the next ses- 805.3 million bushels just two weeks time. recent weeks. This would indicate that sion posted a key reversal higher as into the marketing year. This is 34.6 As far as the cattle market is con- a positive outlook by the trade is optimanaged money added to their net percent of the total USDA 2.325-bil- cerned, the recent rally appears to be mistic for future price appreciation. long position. lion-bushel outlook. meeting some resistance as beef cutThe last segment of this rally has The Federal Reserve this week indiWeekly ethanol production was down outs have been easing lower and the been extremely quick. This type of cash trade has slipped back to near the cated they will keep interest rates low 15,000 barrels per day to 926,000 bpd. action usually ends a move rather for a few years. Could this be attract- Stocks were down 195,000 barrels at a $100 per hundredweight level. Also, the abruptly. ing money to commodities? Demand five-week low of 19.8 million barrels. feeder market has fallen off during the Short term, the market is overbought marches on with another 35.7 million The U.S. Grains Council doesn’t expect past several weeks as auctions have and a corrective move is likely in the bushels sold this week, with 62 percent world ethanol production to return to seen prices dip since mid-August. of the total going to China. It’s esti- pre-Covid levels until 2022. Weights have been on the rise which days ahead. However, the longer term outlook would still be fairly positive mated China has purchased 386 milA Farm Futures survey conducted in will increase the amount total beef pro- since the relationship between cattle lion bushels or 9.8 million metric tons late July indicated 2021-22 corn acres duction which is likely to counter-bal- and hogs is still weighted toward the of U.S. corn. This contradicts both the ance the supply to the demand which U.S. Department of Agriculture and See NYSTROM, pg. 11 would be another negative to price cattle. Eventually this disparity in price between hogs and cattle will corChinese forecasts for China to import 7 rect sometime in the future. mmt this year. A massive understatement by both countries? China’s ag Another factor which is a bit worriministry is estimating three typhoons some is the amount of pork in cold storthis year may have cut their corn proage. The next U.S. Department of corn/change* soybeans/change* duction 5 to 10 mmt. A Chinese firm is Agriculture Cold Storage Report is due St. Cloud $3.15 +.09 $9.50 +.52 predicting China’s corn imports could Sept. 24; and this could set the tone for Madison $3.14 +.07 $9.53 +.52 reach 16 mmt this year. price direction into the fall. v Redwood Falls $3.22 +.14 $9.55 +.51 The government announced a new Fergus Falls $3.04 +.12 $9.40 +.47 $13 billion aid package for growers this Morris $3.12 +.15 $9.50 +.53 week. The CFAP payment for growers Tracy $3.15 +.10 $9.51 +.52 will be direct payments. Sign-up began on Sept. 21. The estimated payment is Average: $3.14 $9.50 23 cents for corn, 31 cents for soybeans, Year Ago Average: $3.42 $7.90 and 39 cents for all wheat classes. This added payment may result in fewer Grain prices are effective cash close on Sept. 22. forced sales for cash this fall. *Cash grain price change represents a two-week period.
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.
