10 minute read

Marketing

Next Article
Table Talk

Table Talk

Grain Outlook Corn export sales hit market year high

Livestock Angles Livestock market strong as long as dollar is weak

Advertisement

The following marketing under the “policy in place” Over the past few months month of September. However, analysis is for the week end- scenario. Since China has not the livestock markets have if cattle prices continue to ing Nov. 6. officially raised their 7.2 mmt been extremely choppy and strengthen, the demand for CORN — As noted last week, the uptrend was bent but not broken. This week’s action confirmed that outlook in post-election trading when corn held the previous week’s low tariff import quota, the USDA has held their estimate at 7 mmt. How the USDA may handle this on the Nov. 10 WASDE report will be interesting. very erratic. This is not that new in the livestock markets. However, at this juncture, it appears this condition is likely to endure into the near future. replacement cattle will increase. The bottom line is, it appears the cattle market is in the process of finding a bottom and could improve in the weeks ahead. low and rebounded. The week PHYLLIS NYSTROM China has been rebuilding The American economy is JOE TEALE The hog market has seen began with a new 8 million CHS Hedging inC. their state reserves as well as continuing to recover; while Broker prices come under a little bushel sale announcement to unknown, but closed slightly St. Paul satisfying domestic demand in light of high domestic pricinternationally, other world economies are still trying to Great Plains Commodity Afton, Minn. pressure the past several weeks. The demand for pork weaker. The market then pro- es. In Mexico, they lowered recover. This will continue to has slowed somewhat and ceeded to close higher for the next their 2020 corn import outlook to 16.75 leave the export of beef and pork ques- numbers of live inventory have three sessions. This pushed the mmt from 17.2 mmt citing lower feed tionable if the dollar strengthens in the remained more than adequate to meet December contract to fill the overhead demand. They expect to originate 93 near future. So far, the dollar has the weakening demand. At present, the gap left from Oct. 28 and closer to the percent of their corn import needs from remained weak which has made market has seen a decline in price since $4.24 contract high. the United States and the balance from American meat products very attrac- mid-October and could possibly find The high this week in December corn was $4.17.25 per bushel. The weekly high in the March contract was $4.22.25 per bushel vs. the contract high of $4.33 per bushel. The demand outlook Brazil. Weekly ethanol production increased 20,000 barrels per day to 961,000 bpd. This is the highest production number since March. Gasoline demand fell to tive. But if other countries stay with weakened economies, the U.S. dollar could strengthen and disrupt our improved meat exports. As for the cattle market, beef movesome recovery in live prices in the near term. However, technically the market appears weak at this juncture; and if funds begin to liquidate further, this could pressure prices even further. with expectations for a smaller carry- 8.33 million bpd from 8.54 million bpd ment has been improved over the past One thing looking as if it may stand out number on the November World and down 8.8 percent from the same several months which has helped cattle in the way of a rally would be that Agriculture Supply and Demand week last year. The four-week gasoline prices as we muddled through the China has been effectively been rebuildEstimates report, less-than-ideal rain- demand is down 10.8 percent from last heavy cattle. It now appears that ing its hog herd. This would put into fall in Argentina and southern Brazil, year. Ethanol stocks were up 100,000 weights are now topping and if demand question the likelihood exports to and managed money adding to length, barrels to 19.7 million barrels. Margins remains the same or increases, this China could rapidly decline. In any all combined to keep this market well improved 4 cents to 16 cents per gallon. would be a positive for price apprecia- event, the outlook for the hog market is supported. Weekly export sales were higher than expectations at 102.8 million bushels — a marketing year high! Total sales See NYSTROM, pg. 21 The average trade guesses for the tion in the months ahead. Grain prices have slowed the upward surge in replacement cattle since the at a crossroads and the next several weeks are likely to set the tone of the market through the remainder of the year. v commitments of 1.3 billion bushels are running 179 percent ahead of last year. This is a record for this point of the Cash Grain Markets For marketing marketing year. Total sales account for 56 percent of the U.S. Department of Agriculture’s 2.325-billion-bushel export forecast. China has purchased 425 million bushels of U.S. corn for the 2020-21 marketing year. The USDA attaché to China is expecting China to import 22 million metric Stewartville Edgerton Jackson Janesville Cannon Falls Sleepy Eye corn/change* $3.78 +.09 $3.86 +.12 $3.89 +.07 $3.83 +.11 $3.66 -.10 $3.78 +.12 soybeans/change* $10.71 +.66 $10.76 +.65 $10.88 +.75 $10.76 +.75 $10.36 +.09 $10.81 +.75 news between issues ... visit www.TheLand tons of corn this marketing year, a distinct difference from the USDA’s refusal to move off their 7 mmt outlook. In Average: Year Ago Average: $3.80 $3.53 $10.71 $8.47 Online.com defending their stance on this, the Grain prices are effective cash close on Nov. 10. USDA last week said they operated *Cash grain price change represents a two-week period.

Soybeans, U.S. dollar took off in opposite directions

NYSTROM, from pg. 20 week, soybeans surged higher through mid-week as November WASDE report are as follows: yield at 177.7 bushels per acre vs. 178.4 bu./acre in October; production 14.659 billion bushels vs. 14.722 previously; ending stocks 2.033 billion bushels vs. 2.167 billion bushels on the last report. the U.S. dollar tumbled. New contract highs were set in soybeans and meal throughout the week. The contract high in January soybeans is now $11.12.75 per bushel and in December meal $393.40 per ton. On the continuous soybean chart, beans pushed through $11.00 for the first time since 2016. Soyoil also was

Brazil’s corn production is pegged at 110.1 mmt, sharply higher as palm oil hit eight-year highs and unchanged from last month. Argentina’s corn produc- pushed importers to book U.S. soyoil. India bought tion at 49.6 mmt would be down .4 mmt from last 33,000 metric tons — their largest purchase since month. World ending stocks are estimated at 296.4 2012. mmt compared to 300.5 mmt previously. Put this in the “unusual stuff” category: the Census

The USDA released their early 10-year baseline Bureau put U.S. September soybean exports at 286 projections on Nov. 6. This report is usually used for million bushels much higher than the weekly inspecbudgetary reasons. The full report will be released in tions report of 234.6 million bushels. The USDA uses February along with commentary. This report sug- the Census Bureau numbers for their reports. This is gests 2021-22 planted corn acreage at 90 million an unusually large discrepancy based on the last four acres, 180.5 bu./acre, production 14.89 billion bush- years. This could mean an even lower carryout numels, and ending stocks at 2.257 billion bushels. For ber on this month’s WASDE report. Be aware, this soybeans, 89 million planted acres, 50.6 bu./acre, doesn’t change sales, just what has been shipped. It’s production 4.465 billion bushels, and ending stocks possible heavy early sales may curb worries about at 255 million bushels. later cancellations.

Outlook: Factors having the greatest influence on Weekly export sales were at the high end of estishort-term direction haven’t changed: South mates at 56.2 million bushels. Total commitments American weather, export demand, weaker U.S. dol- stand at 1.78 billion or 81 percent of the USDA’s lar, and how small the carryout will fall on Nov. 10. 2.2-billion-bushel outlook. China has bought approxAdding to uncertainty is no resolution to the presi- imately 988 million bushels of U.S. soybeans so far in dential election. Basis levels were mixed this week as the 2020-21 marketing year. This includes the 4.8 the December/March corn carry eased back out to 7 million bushels they purchased this week — their cents. Next resistance in the December contract is first direct buy since Oct. 15. The U.S. attaché in the contract high at $4.24 per bushel. China pegged their 2020-21 soybean imports at 95

The December corn contract was 8.25 cents higher mmt compared to the USDA’s most recent forecast this week at $4.06.75, March was up 10.5 cents at for 100 mmt. The USDA announced the sale of $4.13.75, July rallied 13 cents to $4.20.25, and 33,000 metric tons of soyoil to India. India is the December 2021 jumped 8.25 cents to $3.95.5 per largest importer of oil, but normally doesn’t buy bushel. much from the United States and is their first U.S. The next WASDE report was released Nov. 10. The USDA released early long-term 10-year baseline balance sheets only on Nov. 6. They will follow up the purchase since 2016-17. South Korea also stepped in to buy 30,000 metric tons of U.S. soyoil late in the week. full report at their February Outlook meeting. A small soybean boat (38,000 metric tons) was also

SOYBEANS — After a slight setback to begin the headed to Brazil this week with U.S. soybeans. Brazil had earlier lowered their import tariff on soybeans Soil Management Summit moves online Dec. 15-16

WORTHINGTON, Minn. — Like many annual events, this year’s Soil Management Summit, formerly known as the Conservation Tillage Conference or CTC, has had to make the transition from in-person to online.

The Soil Management Summit emphasizes proven farmer experience and applied science. Straight from the fields, learn how heavier, colder soils aren’t necessarily the challenge they’re made out to be. Hear from long-time no-till, reduced tillage and cover crop farmers as they share their experiences.

Some of this year’s topics include tillage erosion, soil organic matter and water dynamics, and the conference staple - a panel of farmers sharing their own personal experiences with soil management.

For more information and to register, visit z.umn. edu/SMS2020

This article was submitted by University of Minnesota Extension. v coming from outside the Mercosur trading block through the end of the year. Brazil’s ag ministry this week said imports of U.S. GMO soybeans were allowed, easing concern about varieties of soybeans which were approved in the United States but not in Brazil.

Brazil’s crusher association Abiove estimates Brazil may import 1 mmt of soybeans this year, the highest since 2008. Logistical issues likely limit huge imports since they are not set up to have a big import program and the soybeans would have to move inland to crushers.

The Buenos Aires Grain Exchange lowered their Argentine soybean production 2.5 mmt to 46.5 mmt with 4 percent of the crop planted. The USDA in October was carrying Argentina’s soybean crop at 53.5 mmt.

China imported $3.13 billion of agricultural products in September, the highest monthly total since November 2017. Soybeans accounted for 62 percent of the total and corn 5 percent of the total. The September National Agricultural Statistics Service Crush report was spot-on with estimates at 171.1 million bushels — a new record for the month. Soyoil stocks were 1.849 billion pounds.

The average guesses for the November WASDE report: U.S. soybean yield at 51.6 bu./acre vs. 51.9 bu./acre last month; production 4.251 billion bushels vs 4.268 billion bushels in October; and ending stocks at 235 million bushels (the lowest since 2015-16 if accurate), down from 290 million last month. In 2018-19 ending stocks were 909 million bushels! Brazil’s soybean production unchanged at 133 mmt. Argentina’s soybean production down to 52.9 mmt from 53.5 mmt. World ending stocks at 87.4 mmt compared to 88.7 mmt in October.

Outlook: Demand from exporters and crushers continues to provide excellent support. This combines with uncertainty over long-term weather prospects in South America and ongoing managed money buying, and giving limited reasons to reverse direction beyond correction-type action.

Argentina and southern Brazil are the areas suffering the most from lack of rain and their outlook is dry for the next two weeks. Will La Niña be worse or better than expected?

How low the USDA cuts U.S. ending stocks on Nov. 10 will be of special interest to managed money that holds huge long positions. The uptrend remains intact, but corrections are usually healthy.

Price changes for the week: January soybeans rocketed 45.25 cents higher at $11.01.5, July rallied 51.5 cents to $10.94.75, and November 2021 was 35 cents higher at $10.06 per bushel.

Nystrom’s notes: Contract changes for the week as of the close on Nov. 6: Chicago December wheat was 3.5 cents higher at $6.02, Kansas City rallied 14 cents at $5.55.25, and Minneapolis was a nickel higher at $5.57.25 per bushel. v

This article is from: