Afternoon Market Highlights


Highlights

  • Reports indicated that the U.S. and China had concrete discussions over their three-day session in Beijing with no current news transpiring today. Monday talks indicated that roughly 180,000 mt and rumors of up to 900,000 mt of U.S. soybeans were bought from China but is difficult to pinpoint with the on-going partial government shutdown. There is no set date on when the next meetings between U.S. and Chinese officials will reconvene.
  • As of 2:05pm, the U.S. $ index is up 30 pts. at 95.53, the Argentine Peso is down 0.74% at 37.04 and the Brazil Real rose 0.82% at 3.71.
  • There will be no January 11th Supply and Demand report tomorrow and will be delayed until sometimes after the partial government shutdown is resolved.

Corn

  • The corn market followed pursuit with soybeans on a lack of additional news from trade discussions.
  • The average estimates of U.S. corn carryout for the January 11th report are pegged at 1.694 billion bushels, down from December at 1.781 billion bushels. The world corn carryout ranges from 305.50-310.00 mmt compared to December at 308.80 mmt. Last month’s report showed corn yield at 178.9 bu/acre on 81.8 million harvested acres.
  • Average estimates for Argentina and Brazil corn are at 42.39 and 94.31 mmt respectively.
  • CONAB raised their Brazil corn estimate to 91.19 mmt, up 90,000 mt from the prior month.
  • South Korea bought 69,000 mt of optional origin corn ($209.90/ton c&f).
  • Nearby corn was rangebound from $3.76 to $3.82¾. March corn fell back below the 100 and 50-day moving averages of $3.77½ and $3.79¼ respectively.
  • March corn closed down 5¾c at $3.76¼, July closed down 5¼c at $3.92¼ and December 2019 closed down 5c at $3.99.
  • Spreads: H/K 8½c carry, H/N 16c carry, H/Z 22¾c carry. 

Oilseeds

  • Soybean prices took a beating with the market disappointed by the reports from both U.S. and China regarding their trade discussions.
  • The projected U.S. soybean carryout for the January report is estimated at 904 million bushels, down from last month’s release of 955 million bushels. The world soybean carryout is estimated from 111.80 to 117.00 mmt. Last month’s report showed soybean yield at 52.1 bu/acre on 88.3 million harvested acres.
  • Average estimates for Argentina and Brazil soybeans are at 55.29 and 120.13 mmt respectively. Brazil’s estimates have backed off from the prior month 122 mmt due to dryness concerns across southern growing regions.
  • CONAB estimated the Brazilian soybean crop at 118.80 mmt, down 1.266 mmt from last month’s estimates but higher than market expectations.
  • March soybeans lost all the gains from the buildup of the trade discussions in Beijing over the past six sessions. March beans hit a low of $9.05¾, with the next level of support at the 50-day moving average of $9.04 and again at $9.00.
  • March soybeans closed down 17¼c at $9.06¾, July closed down 16¾c at $9.32¼ and November 2019 closed down 14½c at $9.48.
  • Spreads: H/K 13½c carry, H/N 25¾c carry, H/X 40¾c carry. 

Wheat

  • The wheat market edged lower on falling short of export sales and fund index selling.
  • South Korea purchased 65,000 mt of optional origin feed wheat ($2.55.50/ton c&f).
  • Jordan tenders for 120,000 mt of optional origin wheat.
  • The estimated U.S. wheat carryout for the January report is at 987 million bushels, up from the December value of 974 million bushels. The world wheat carryout average estimates are at 268.22 mmt. Last month’s report showed wheat yield at 58.6 bu/acre on 39.6 million harvested acres.
  • U.S. winter wheat 2019-20 seedings are estimated between 31.513 to 33.3000 million acres. Hard red winter, soft red winter and white winter wheat are estimated at 22.727, 6.019 and 3.486 million acres respectively for 2019-20 seedings.
  • March Chicago wheat fell back below the 50-day moving average of $5.17¾. March Minneapolis wheat was rangebound from $5.62¾ to $5.72½. Nearby KC wheat fell back below $5.00 with the 50-day moving average sitting at $5.06¼.
  • March Chicago wheat fell 6¼c at $5.13¾, Minneapolis March wheat decreased 6½c at $5.64, and Kansas March wheat settled 6¾c lower at $4.98¾.
  • Spreads: MWE H/K 5½c carry, KW H/K 11c carry, W H/K 5¾c carry. 

Livestock

  • Hog prices were mixed on the day. February hogs hit a high of $64.22½, finishing slightly above the 50 and 100-day moving averages of $64.02 and $64.03.
  • Pork bellies increased $7.13 to $145.08/cwt. Carcass prices rose while picnic ham’s fell in the morning report to $71.75 and $35.77/cwt, respectively, on 172 loads. Pork margins fell $3.35 to $29.10.
  • February lean hogs rose 30c to $64.07½ and April increased 30c to $67.85.
  • Live cattle rose while feeders were mixed throughout the day. February live cattle held strong, trading from a low of $124.57½ to $125.15. Nearby feeders tested the 200-day moving average of $146.96 but failed to remain above that level. The last trading day for January feeders is January 31st.
  • The USDA morning boxed beef highlights showed choice cutouts rose 61c to $214.45/cwt, while selects increased 58c to $207.05/cwt. Beef margins decreased $2.95 to $46.50.
  • February live cattle closed up 7½c at $124.87½, while January feeder cattle closed down 7½c at $146.75.
  • Today’s estimated hog and cattle slaughter is 477,000 and 120,000 respectively. This week’s estimated total hog and cattle slaughter is 1.906 million and 477,000 respectively.