Good Morning from Allendale, Inc. with the early morning commentary for August 13, 2019.
Grain markets dropped sharply after the USDA announced higher-than-expected crop volumes. The government issued a surprise boost to its corn and wheat outlooks despite concerns about a wet spring and dry summer. Traders will now change their focus to yield outlooks while continuing to keep an eye on weather concerns as farmers approach harvest and beyond.
USDA August supply and demand report showed planted corn acres at 90.0 million (expected 87.998 million) and corn yield at 169.5 bushels per acre (expected 164.9 bushels per acre). Total production at 13.901 billion bushels (expected 13.193 billion bushels). Soybean planted acreage at 76.7 million (expected 80.849 million) with a 48.5 bpa yield (expected 47.5 bpa) for a total production of 3,680 billion bushels (expected 3.800 billion bushels).
U.S. ending stocks at 2.181 billion bushels of 2019/20 corn (expected 1.620 billion bushels), .755 billion bushels of soybeans (.821 bb soybeans expected), and 1.014 billion bushels of wheat (.999 bb wheat expected). World numbers showed 307.7 million tonnes of 2019/20 corn ending stocks (290.30 million tonnes expected), 101.70 million tonnes of soybeans (104.77 million tonnes expected), and 285.40 million tonnes of wheat (284.50 million tonnes expected).
USDA weekly crop progress report showed corn condition ratings at 57% GTE (56% GTE estimated, 57% GTE last week, 70% GTE last year, 69.4% 5-year average). Soybean condition rating at 54% GTE (53% GTE expected, 54% GTE last week, 66% last year). Spring wheat condition ratings at 69% GTE (72% GTE expected, 73% last week, 75% last year). Spring wheat harvest at 8% complete (11% expected, 2% last week, 32% last year). Winter wheat harvest 89% complete (90% expected, 82% last week, 93% last year).
China's agriculture ministry said it has revised down its estimate for 2018/19 soybean imports to 83.5 million tonnes (1.5 million tonnes lower than last month's estimate), due to lower-than-expected shipments in July. They also upgraded their 2018/19 corn imports estimates to 4 million tonnes (700,000 tonnes higher than last month). The revised estimate for corn imports was primarily due to a significant reduction in U.S. sorghum imports, the ministry said.
Taiwan Flour Millers' Association issued an international tender to purchase 94,950 tonnes of grade 1 milling wheat to be sourced from the U.S., European traders said. The tender seeks a range of different wheat types in two consignments for shipment from the U.S. Pacific Northwest coast.
Funds were sellers of 60,000 corn contracts, 11,000 soybeans, 13,000 wheat, 5,000 soymeal and buyers of 6,000 soyoil contracts.
Smithfield Foods Inc. launched a line of soy-based meat products, joining an increasing number of companies catering to growing demand for meat alternatives. The Pure Farmland products include soy-based burgers, meat balls, sausages and ground meat, and will be available at Kroger Co., Sprouts Farmers Market Inc. and Target Corp.starting next week, the company said.
Serbia has reported four suspected outbreaks of African swine fever among backyard pigs, the Paris-based World Organization for Animal Health said, prompting neighboring countries to ban hog imports. Bosnia, Montenegro and North Macedonia banned imports of pigs, wild boar and related products from Serbia to prevent the spread of the outbreak, the countries' veterinary authorities said.
Dressed beef values were higher with choice up 2.25 and select up 3.98. The CME feeder index is 141.10. Pork cut-out values were down 0.25.