The Allendale Wake-Up Call

Signs of Good Demand as US Plantings Loom

Good Morning! From Allendale, Inc. with the early morning commentary for March 16, 2018.  

Grain market traders weigh recent demand news with a shrinking Argentine crop vs. the prospects of the coming US plantings. Concerns over trade disputes continue to swirl markets.

2018 Acreage is being decided now. If you missed the results of our annual acreage survey, check out the recording of the results webinar. There is no cost to view it.

The Rosario Grains Exchange cut its estimate of the Argentine soy crop to 40 million tonnes, down from their previous estimate of 46.5 MT due to ongoing dryness. The corn crop was cut from 35 MT to 32 MT.

NOPA Crush was reported at 153.719 million bushels, better than the trade’s 149.443 estimate. February crush was 7.7% over last year. The year to date pace is now 3.1% over last year.

Weekly export sales for the week of March 2nd - March 8th had corn sales totaling 2,605,029 metric tonnes (2,505,077 for 2017/18), well over the 1,300,000 - 1,600,000 trade estimate, as well as a record sale for this particular week. We have now sold 77% of USDA's whole-year goal, right on the five year average.

Soybean sales were reported at 1,346,931 metric tonnes, within the 900,000 - 1,400,000 trade expectation. Sales so far total 88% of USDA's whole-year goal. That is under the five year average pace of 93% that is normally seen by this point.

Wheat sales were a bit disappointing at 219,552 tonnes, under the 250,000 - 650,000 expectation. Year to date sales are 89% of USDA's whole-year goal. That is under the 96% normal sales rate. Remember the wheat marketing year ends May 31st.

The weekly Drought Monitor maps showed only minor changes from last week. The area in stage 4 Extreme Drought in the Texas Panhandle was further moved West into New Mexico. The area in stage 3 Severe Drought was widened in Kansas.

Brazilian farmers in top soy state Mato Grosso signed a memorandum of understanding with the Panama Canal Authority to evaluate ways to cut transportation costs and boost Brazilian grain volumes using the waterway, the authority's chief administrator said. The canal's administration is looking to increase its participation in rising Brazilian grain exports, since a large part of grain trade expansion in Brazil is via new terminals in the northern part of the country, which are closer to the canal. (Reuters)

Funds were estimated sellers of 8,000 corn contracts, 7,000 contracts of wheat, and 1,000 soymeal in yesterday's trade. They were buyers of 9,000 soybeans, and 4,000 soyoil.

The White House announced the appointment of Larry Kudlow to lead the National Economic Council, yesterday. Kudlow, a former Reagan administration economist and host on CNBC, had been a vocal critic of the president’s steel and aluminum tariffs, but has since, “come to an understanding on the issue”.

Economic reports out today including Housing Starts and Building Permits at 7:30 CDT, Industrial Production at 8:15, JOLTS Job openings, and University of Michigan Consumer Sentiment at 9:00.

Actual Slaughter detailed the hog production numbers for the week ending March 3. The average barrow/gilt carcass was unchanged in the latest week at 212 lbs per head. They are 1.0% higher than last year, unchanged from the previous week.