THE LAND — NOVEMBER 13/NOVEMBER 20, 2020
www.thelandonline.com — “Where Farm and Family Meet”
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MARKETING
Grain Outlook USDA cuts corn yield estimates, price remains healthy
Livestock Angles Livestock market strong as long as dollar is weak
The following marketing The feed category was cut Over the past few months month of September. However, analysis is for the week end75 million bushels to 5.7 bil- the livestock markets have if cattle prices continue to ing Nov. 13. lion bushels and exports were been extremely choppy and strengthen, the demand for bumped 325 million bushels very erratic. This is not that replacement cattle will CORN — Let’s get right to to a record 2.65 billion bushnew in the livestock markets. increase. The bottom line is, it the bottom line for this week’s els. This flowed into a decline However, at this juncture, it appears the cattle market is action: A bullish November in ending stocks of 465 mil- appears this condition is likein the process of finding a botWorld Agriculture Supply lion bushels to 1.702 billion ly to endure into the near tom and could improve in the and Demand Estimates bushels, the lowest in seven future. weeks ahead. report which cut U.S. corn JOE TEALE ending stocks to 1.7 billion PHYLLIS NYSTROM years. The trade was anticiThe American economy is The hog market has seen pating ending stocks of 2.033 continuing to recover; while Broker CHS Hedging Inc. bushels! prices come under a little billion bushels. The ending internationally, other world Great Plains Commodity pressure the past several St. Paul New contract highs in the Afton, Minn. stocks-to-use ratio came in at economies are still trying to weeks. The demand for pork December and March con11.5 percent compared to 14.4 recover. This will continue to has slowed somewhat and tracts were seen on report day and the percent for 2019-20. The average farm next day, but prices faded into the price jumped from $3.60 to $4.00 per leave the export of beef and pork ques- numbers of live inventory have weekend. We only saw one daily export bushel. The 2019-20 average farm price tionable if the dollar strengthens in the remained more than adequate to meet sales flash this week — on Nov. 10 with was $3.56 per bushel. The December near future. So far, the dollar has the weakening demand. At present, the 5 million bushels sold to South Korea. contract soared 15.5 cents on report remained weak which has made market has seen a decline in price since American meat products very attrac- mid-October and could possibly find The U.S. Department of Agriculture day, setting new contract highs on the tive. But if other countries stay with some recovery in live prices in the near also finally recognized an increase in way. weakened economies, the U.S. dollar term. However, technically the market China’s corn import line — jumping it World ending stocks were 291.43 could strengthen and disrupt our appears weak at this juncture; and if from 7 million metric tons to 13 mmt! mmt, below the 296.37 mmt estimate improved meat exports. funds begin to liquidate further, this Many in the market believe this num- and compared to 300.45 mmt last As for the cattle market, beef move- could pressure prices even further. ber could be closer to 22 mmt, as the month. This will be the smallest world ment has been improved over the past One thing looking as if it may stand USDA attaché in China expects. China ending stocks number since 2014-15. several months which has helped cattle in the way of a rally would be that has bought 10.76 mmt or 423.6 million The USDA woke up to reality and prices as we muddled through the China has been effectively been rebuildbushels of U.S. corn so far for this marraised China’s corn import line to 13 heavy cattle. It now appears that ing its hog herd. This would put into keting year. China may be on pace to mmt from their stubbornly held 7 mmt. weights are now topping and if demand question the likelihood exports to replace Mexico as the world’s largest corn importer this year. The report They had just recently defended their remains the same or increases, this China could rapidly decline. In any didn’t give existing long positions a decision not to increase China’s corn would be a positive for price apprecia- event, the outlook for the hog market is at a crossroads and the next several reason to vacate that stance. But as imports on the October report citing tion in the months ahead. their adherence to “policy in place.” with every bullish market, corrections, Grain prices have slowed the upward weeks are likely to set the tone of the consolidation and profit-taking will See NYSTROM, pg. 24 surge in replacement cattle since the market through the remainder of the year. v occur — which is what we also saw this week. The November WASDE report breakdown brought down ending stocks corn/change* soybeans/change* through a couple of avenues. The yield St. Cloud $3.75 +.19 $11.00 +1.06 was dropped 2.6 bushels per acre from Madison $3.83 +.19 $11.17 +1.03 last month to 175.8 bu./acre and vs. the Redwood Falls No report available this week 177.7 bu./acre expectation. North Dakota’s yield was slashed 15 bu./acre Fergus Falls $3.77 +.19 $11.00 +1.06 to 45 bu./acre. Illinois corn yield was Morris $3.82 +.16 $11.10 +1.06 cut 5 bu./acre to 195 bu./acre and Iowa Tracy $3.79 +.23 $11.03 +1.03 was lowered 2 bu./acre. Production fell Average: $3.79 $11.06 215 million bushels to 14.507 billion bushels vs. the trade estimate of 14.659 Year Ago Average: $3.44 $8.34 billion bushels. Corn production has Grain prices are effective cash close on Nov. 17. declined from the November report to the January report in six of the last *Cash grain price change represents a two-week period. seven years.
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.