Weekly Market Recap


Trade relations are front and center right now. President Trump is hoping to have a summit with President Xi by Mid-March, “there had been Substantial Progress made in talks with China.” according to Trump.  There are growing concerns that the new NAFTA agreement is in trouble. Mexico, Canada, and members of Congress want tariffs on metals eliminated as part of the deal. The next WASDE report is scheduled for next Friday, March 8th.  The trade isn’t expecting any big surprises in this report.  We could further adjustments to production and exports for other parts of the world.


The spring insurance price for corn is $4.00 which is up 4 cents from last year.  Export inspections were pretty weak.  The gap behind the USDA export pace continues to widen and now stands at 147 million bushels. Ethanol production increase this week continuing the choppy pattern we’ve seen over the past month. Ethanol margins are right at the break even level.  Export sales were strong this week at 1.2 million tons.  Mexico was the best buyer this week and they continue to be the leading buyer overall. 


The Russian wheat crop is now pegged at 78.5 million tons for 2019.20. The previous estimate was 77.6 million tons.  This is almost a 10% increase from last years crop but not at record levels. Some US crop conditions for wheat are being released on a state by state basis. Those conditions are compared to December 3rd. In Kansas G/E was 51% up from 45%, Colorado was 50% G/E vs 54%, Nebraska was 60% vs 66% and Oklahoma 43% vs 46%.  Wheat export inspection were outstanding posting the biggest total of the marketing year.


The spring insurance price for soybeans is $9.54 which is down 62 cents from last year.  A new bill was introduced in the Senate that would reinstate a $1/gallon biodiesel tax credit. The bill would make the credit retroactive to last year. Export inspections were very good at 1.3 million tons.  Inspections have gone above the 1 million ton mark in 6 of the last 7 weeks. China was the biggest destination this week taking nearly 60% of all shipments. Export sales were huge this week blowing away expectations at 2.2 million tons.  China was the leading buyer of 1.8 million tons with a huge drop off to the 2nd biggest buyer at 160,000 tons.


The US/China trade talks have turned to poultry. The US wants to ship chicken wings, legs, thighs, and paws to China, and China wants to sell chicken breast to the US. However, China must first remove restrictions from 2015 when the US had an Avian Flu outbreak. China’s breeding sows are off 15% since January, so China should be looking for more pork imports by the second half of this year. Cash cattle trade has been sluggish again this week with some early trade taking place between $122 and $125 which was lower than last week by a couple bucks. Late week trade jumped up sharply to $128-129.  Packer margins are slowly improving from $62/head last week to $78/head currently. 


WTI futures are trading near of top end of the range. U.S. production remains at record levels and retail prices continue to move higher.  This week’s EIA report showed U.S. crude imports fell to their lowest level in 23 years as production in the U.S. continues to climb to a record 12.1 million barrels per day. AAA is reporting the national average for a gallon of gasoline at the pump at $2.423 compared to $2.387 last week. Last year during the same period the average price was $2.540.