Good Morning from Allendale, Inc. with the early morning commentary for October 9, 2019.
Grain markets were mixed overnight as traders position for the next round of USDA data in the last full trading day before the October WASDE report. Big snows forecast for the US Plains are also receiving a lot of attention as corn maturity in some of those regions are cause for concern.
USDA Supply and Demand report will be released tomorrow at 11:00 AM CDT. Analysts expect to see corn production at 13.684 billion bushels on a yield of 167.5 bushels per acre. Soybean production is expected at 3.583 bb on a yield of 47.3 bpa. Total corn ending stocks are estimated at 1.784 billion bushels, soybeans .521 bb, and wheat 1.015 bb.
An early season snow storm is expected in the US and, "the Dakotas, Minnesota and Manitoba, Canada will be impacted by multiple days of rain and snow that will evolve into a raging blizzard. The blizzard may lodge some corn and sunseed crops and a huge accumulation of snow will keep soybeans and some other crops buried in snow long enough to raise some quality issues," according to World Weather, Inc. As of Sunday, South Dakota was only 36% mature. North Dakota was 22% mature.
FranceAgriMer estimates the French soft wheat stocks at the end of this season were cut to 2.9 million tonnes from 3.3 million seen last month but would be 32% above 2018/19. They are estimated to have harvested its second-largest soft wheat crop on record, with production at 39.7 million tonnes, nearly 17% above last year's level. (Reuters)
ProAgro agriculture estimates the 2019 grain harvest in Ukraine at 76.51 million tonnes, up from their previous estimate of 74.33 million tonnes. Of that estimate, they see 37.37 million tonnes of corn and 28.2 million tonnes of wheat. Their wheat estimate is just under USDAs 28.7 mt.
Unnamed sources report that China has offered to increase annual ag product purchases of US goods by $10 billion in an attempt to secure an interim deal. Given yesterday's headlines, however, the major deal the US is looking for would be surprising this week.
The coming snow storm was given partial credit for yesterday's near expanded-limit trade. As of September 1 South Dakota held 1.850 million head of hogs, both for market and breeding. That was 2.5% of the 75.086 million head nationwide total on that date. North Dakota only holds about 0.2% of the nation's hogs, but Minnesota is the nation's #3 hog state with 8.8 million hogs, 11.7% of the nation's total. Rich Nelson reminds us, however, that 98% of all hogs are raised indoors.
It's interesting to note that cattle futures are completely ignoring the coming blizzard in the Northern Plains. From a feedlot discussion it is understandable. South Dakota handles only 2% of our cattle feeding. North Dakota is not on the register. Even if you throw in Minnesota it's not that big at 1%. Only if the storm significantly reaches down into Nebraska can we make an argument on that front. Nebraska is currently our #2 feedlot state at 21% of the total.
Dressed beef values were higher with choice up 2.51 and select up 1.15. The CME feeder index is 144.38. Pork cut-out values were down .30.