The Hueber Report

Does another else find irony in this?  China kicked off its New Year yesterday, and they are celebrating the year of the “Pig.”  This, after battling an outbreak of African Swine fever during the last year with an “official” death loss (culling) estimate of around 915,000 head.  None of will know how large the unofficial number may have been.  Needless to say, they could use a little Pig Fortune this year, which would be a welcome shift for bean demand as well.  These are very rough, and I think conservative calculations, but if they culled 1 million hogs last year, that potentially would amount to at least a 2-million-bushel reduction in demand for soybeans.  Granted, that is basically one vessel, but lower demand is lower demand. Take note as well that a different strain of African Swine fever has shown up in Japan and so far around 15,000 hogs have been culled.  Certainly not comparable to the number in China, but as I said, lower demand is lower demand.  

 

All that said, more exports sales were announced this morning. Another 586,000 MT were sold to China, with 523k for the current crop year and 63k for next and 182,000 MT were reported sold to unknown destinations for this crop year.  Beans may have bounced ¼-cent on the news but have remained under pressure for the session and continue to act lethargic.

Even though prices have yet to make much headway, our wheat market has been supported by a slowing of exports from Russia.  Keep in mind that they began the year very aggressively moving wheat but that has resulted in dwindling supplies, and rising prices and farmers are holding inventories.  As such, U.S. origin wheat has become competitive on the world stage.  

 

More and more survey results are filtering in for Friday’s estimates and here is an average of the averages; Total US corn production of 14.523 billion bushels from a yield of 177.8 bpa.  Ending stocks for this crop year are expected to fall in at 1.711 billion bushels.  Domestic bean production is expected to come through at 4.566 billion from a yield of 51.75 bpa.  Ending stocks at 926.5 million bushels.  Wheat ending stock are estimated to be 991.5 million.  We also missed the December 1st grain stock estimate, and the average estimates have corn inventory at that date at 12.079 billion, beans at 3.754 billion and wheat at 1.960 billion.  Looking at wheat acreage, the trade surveys look for 32.05 million. Of this 22.55 million would be HRW, 5.94 SRW, and 3.499 White.  Looking now to South America, the average estimate for Brazilian bean production is 116.75 MMT and corn 93.16 MMT. For Argentina, the estimate calls for 55.17 MMT of beans and 43 MMT corn.  Last but not least, global ending stock for corn are expected to come through at 307 MMT for corn, 112.8 MMT for beans and 268.3 MMT of wheat.

 

It is difficult to imagine we will see much action between now and Friday.