Weekly Market Recap


Grains

China’s president Xi said on Friday that the Phase One deal is beneficial for both our countries and they will work together to sign the deal as soon as possible.   China’s Ministry of Finance released a list of 859 products that will have their tariffs reduced January 1st for WTO members, including frozen pork. Argentine’s Ag Minister Luis Basterra has reportedly been talking to farmers about the possibility of applying lower grains export taxes to producers located farther from ports. Farmers in that country have not been happy due to the export taxes that were raised from 25 % to 33 % on soybeans and from 7 % to 15 % on corn and wheat nearly two weeks ago. The dow closed at an all-time high.

Corn

Corn exports were 626.2tmt vs. estimates of 500tmt – 1.3mmt in today’s weekly export sales report. Total corn volume traded Thursday was 78,798 contracts, the smallest amount since December 24th, 2015. 

Wheat

Morocco has tendered for 350tmt of Durum wheat from the U.S., along with reports they will be suspending their 35% import duty through the first 4 months of the year; an official announcement is expected today.  A smaller than average wheat crop last year has boosted estimates on their need for imports. Paris Milling Wheat futures gapped higher overnight and are at the highest price since last May. Wheat export sales were 755tmt vs. estimates of 200-900tmt. A strong storm system is forecast to move across most of the middle U.S. the next 3 days, but the question remains whether the exact route will alleviate dryness in western wheat areas. A sharply lower Aussie wheat crop, smaller production in the EU, and heat and dryness in Argentina has pushed wheat values to the highest levels in 6 months. 

Soybeans

China imported 2.6mmt of U.S. soybeans in November, more than double October’s amount and the largest in 20 months. Palm Oil prices continue to rally, now near 2 year highs, on declining production estimates. BAGE estimated Argentina’s soybean crop is 79.1% planted. Both soyoil and palm oil traded to new contract highs in overnight trade.  Nearby soybean oil share at 34.8% is the highest level in over 2 years.

Soybean exports were 747.3tmt vs. estimates of 700tmt – 1.55mmt, soymeal were 138tmt vs. estimates of 100-300tmt and soyoil were 37.4tmt vs. estimates of 5-30tmt. Soybean futures hit their highest level in 7 weeks before setting back on Friday.

Livestock

Last Friday’s Cattle On Feed report estimated November placements up 5% over last year, well above the .9% average guess.  This could cause some analysts to revise their feed usage numbers higher. Monday afternoon’s hog and pig report a/o December 1st was mostly in line with trade expectations. All hogs and pigs were @ 103 % of last year, Hogs kept for breeding was @ 102 % of last year while marketing’s were pegged @ 103 % of last year.    

 

Energies

OPEC cuts have stabilized the world oil market, but cuts can’t last forever, Energy Minister Alexander Novak said. China, Iran and Russia started four days of joint naval drills in the Gulf of Oman and the Indian Ocean. Iran is looking to increase its military ties with China and Russia amid heightened tensions with the United States. About a fifth of the world’s oil passes through the Strait of Hormuz, which connects to the Gulf of Oman.