The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
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The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
Paul Georgy serves as president/CEO of Allendale, Inc., a worldwide agricultural advisory and research firm that provides agricultural commodity price research and risk management alternatives for producers, major food companies, international corporations, foreign governments, and major news vendors.
Good Morning from Allendale, Inc. with the early morning commentary for April 8, 2019.
Grain markets closed sharply lower on trade agreement uncertainty, profit taking, and technical selling. Traders over the next few weeks will increasingly focus on U.S. weather, large managed fund short position in corn and at what degree to which South American row crop estimates edge higher.
Last week, May soybean futures were up 14.75 cents, May corn futures up 5.75 cents, while May wheat futures up 10 cents. Soyoil futures up 79 and soymeal up $1.50.
U.S. – China trade deal is unlikely to occur before mid-May. China's lengthy approval process for GMO crops remains a sticking point in talks to end the trade war, according to two sources with knowledge of the talks. Seed companies cannot fully commercialize sales of new strains without these approvals. The two sides had appeared to make some progress on this issue in January, when China approved a handful of GMO crops for import. They were the first approvals in 18 months.
Weather forecasters are predicting a storm, bringing significant rain and perhaps even snow in some places, will hit the Midwest this week, further delaying corn planting. Some analysts believe the US average preventive planted area of 3.8 million acres could swell this season to 5-6 million acres if weather patterns of above normal precipitation continue into May.
CFTC Commitments of Traders report (as of 4/2/19) showed funds new net positions short 246,735 corn contracts, short 74,169 soybean contracts, short 56,439 wheat contracts, long 148,237 live cattle contracts and long 36,791 lean hog contracts.
USDA April WASDE report will be released tomorrow at 11 a.m. CST. Average trade estimates show corn ending stocks at 1.991 billion bushels (1.835 billion bushels on March report), soybean ending stocks at 898 million bushels (900 million bushels on March report) and wheat ending stocks at 1.072 billion bushels (1.055 billion bushels on March report).
Weekly crop progress report will be updated this afternoon at 2 p.m. CST with traders looking for U.S. corn planting at 1-2% complete (2% last year, 3% in 2017).
Conab will update Brazil’s soybean crop this Thursday (prior estimate of 113.5 million mt). Safrs pegs Brazil’s soybean harvest at 83.1% (77.4% five-year average).
Chinese news sources reported reductions in Chinese swine inventories of 20% or more in many regions creating tighter supplies and rising prices in the coming months.
China's agriculture ministry confirmed the first outbreak of African swine fever in the country's Tibet Autonomous Region. The disease was found in two counties and one district of the city of Linzhi. Linzhi is in southeastern Tibet near the border with India. A total of 55 pigs have been killed in the Tibet outbreak so far.
Dressed Beef Values were higher with choice up .19 and select up 1.92. The CME feeder index is 144.01. Pork cut-out values were down .38.
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