Weekly Market Recap


The USDA has issued a statement saying that next week’s WASDE report will not be released on schedule.  Even if government funding is restored the report will not be released on January 11th. There was no indication given if the report would be delayed or skipped if funding was restored. China has confirmed that trade officials from the US will meet in Beijing on January 7-8 to hold discussions on the current tariff situation. Both countries will be represented by mid-level officials.  Main US trade rep Lighthizer is expected to meet with the Chinese Vice Premier later this month.   


Argentina’s corn plantings are estimated at 79% complete. This compares to 73% last week, 70% last year and 75% on average. Traders are closely watching the weather situation in Brazil to see if it will affect the planting of the Safrinha corn crop. The crop was last rated at 57% good/excellent. Ethanol data is one of the few reports that is still being released.  This week production dropped off sharply and is now tied for the lowest level of the marketing year.  Margins did improve by a penny and are now at negative 4 cents.  Margins have been negative for 15 straight weeks. Corn export inspection were ok this week at 914,000 tons.  The inspection numbers need to be higher each week as the total is starting to drift below the USDA mark.


The global wheat market is quiet as Ethiopia is the only country to currently have a tender for wheat. US wheat is competitively priced at current levels and exports are expected to pick up. Russia is still on holiday until the middle of next week. Japan, Egypt, Algeria, Saudi Arabia are all expected to be in the market for wheat next week. Argentina’s wheat harvest is estimated at 91% complete. The Buenos Aires Grain Exchange pegs their total production at 19.0 mmt. There are quality concerns from rain events. Wheat export inspections were poor at just 376,000 tons.  Inspections are well off the USDA pace by 134 million bushels. 


We started the new year with a soybean production outlook for Brazil in the 115 to 120 million ton range.  This is down from the high point about a month ago of record crop of 125 million tons or better! We closed out this week with a couple of private forecasters sharply lowering their estimates.  A US research firm pegs the crop at 116 million tons.  The Brazilian farmers corn and soybean producer’s association, Aprosoja, says the crop will be between 110 and 115 million tons and that if the rains don’t return it could be catastrophic for this year’s crop.  CONAB is scheduled to release their updated production numbers for Brazil corn and beans on January 10th. US and Chinese officials are set to meet face to face starting January 7th with the market speculating China could purchase US soybeans prior to the meeting. Due to the government shutdown, no flash sales are being reported so it is hard to tell if any business has been done. So far, the cash markets do not show indications of any substantial Chinese buying.  Export inspection data is still being released by the government.  Soybean export inspections were pretty weak falling below expectations.  They were only 678,000 tons and have fallen below the million ton mark now for the 2nd straight week. 



Not to sound like a broken record, but in spite of the massive efforts by the Chinese government, African swine Fever continues to spread in China. The number of cases continues to rise with most people believing that the story is being vastly under reported. This is becoming a bigger story as the number of cases grows and because pork demand increases around the Chinese New Year. China is stepping up the investigation of and punishment of illegal activities as dead infected pigs have washed up on shore in Taiwan. The Chinese government is reportedly paying farmers $175 per each culled pig as an incentive to report the disease. Cash cattle trade in the US has occurred in the $123 area which is steady with last week. Futures put in a key reversal on Monday and have followed through with lower trade.  February live cattle fell for the fifth consecutive day, remaining just slightly above the 50-day moving average of $121.46. Nearby feeders dropped to a low of $144.67½, which hasn’t traded that level since December 10th. Live and feeder cattle lost $2.25 and $4.17½ on the week. Margins have dropped off from $115 last week to $75/head currently.


OPEC cuts continue to support prices as WTI futures head toward $50.00 per barrel. Optimism over the upcoming trade talks with China which begin on Monday is also pushing front month futures toward the $50.00 mark. AAA reports that the national average for a gallon of gasoline is $2.249, which is slightly lower than a week ago at $2.289.  Last year’s price was $2.489.