Weekly Market Recap


Over the weekend the USDA said they will NOT release the January WASDE report but instead incorporate that data in the February numbers.  The USDA officially confirmed the quarterly Grain Stocks report, Annual Crop Production report and Winter Wheat Seedings report, all initially slated for release on January 11 and postponed due to the government shutdown, will be released on February 8 along with WASDE supply/demand balance sheet report. Commitment of Traders reports from the CFTC will play catchup by issuing old data every Tuesday and Friday until caught up. The reports will finally be in sync on March 8th.  Yep, almost 6 weeks to catch up. The USDA outlook forum is scheduled to take place on Feb 21-22.  The temporary funding measure goes until Feb 15th, so the outlook forum is not a certainty. World Trade Organization (WTO) expected to launch an inquiry into whether the U.S. duties on Chinese goods break a requirement that WTO members give the same tariff treatment to other countries. This could become an issue as China has sent key people to the US to continue negotiations on the tariff war. The U.S. Justice Department unsealed criminal charges Monday against Chinese tech company Huawei and several subsidiaries, alleging the company stole trade secrets, lied to banks about its business and violated U.S. sanctions. Not encouraging for trade negotiations. Huawei is the second largest manufacturer of smart phones behind Samsung, then Apple is 3rd.  According to the Congressional Budget Office, Producer payment are expected to reach $17.2 billion for the 2019 fiscal year. The highest level since 2005, when payments totaled $18.8 billion. The total could be higher if Congress includes $3 billion in Ag disaster aid.


IMEA says Mato Grosso safrinha corn planting is well ahead of normal at 15% complete vs. 7% on average and 7% last year. With the USDA back up and running we saw the first flash sale announcement in a while on Tuesday with 138,000 tons of corn to South Korea.  The export sales data for this week is dated 12/20.  The corn numbers were very good with the 3rd best sales total of the year with big sales to Mexico.


SovEcon raised their 2019 wheat production estimate to 80 million tons up from 77.3 million tons. However, Russia’s ag ministry cut their wheat export forecast to 36 mmt, down 1 mmt from their previous estimate.  Their total grain export outlook was left unchanged at 42 mmt. Egypt issued a new wheat tender with US SRW coming in with the cheapest FOB value at $243/ton.  However, when freight is added in, at least 7 other offers from France, Romania, and Russia were cheaper then the US.  Egypt ended up buying 360,000 tons split evenly between France and Romania. The delayed export sales data this week was just ok for wheat, but it did have the wheat business we did with Egypt factored in.



The soybean market continues to be very reactionary to any possible changes in the trade war with China. With a trade delegation from China in Washington this week, the market was very focused on any comments from the meeting. A statement from a Chinese negotiator on how many beans they would buy stirred up the market. The comment was first reported as China will buy 5 million tons a day.  That was corrected to China will buy 5 million tons today.  And that was corrected to China has bought 5 million tons to date.  It’s all in the translation I guess, but the market was left to wonder whether new sales were coming or if they statements were made in hindsight. The trade was ripe with talk of new buying of about a million tons on Friday and the market jumped up 16 cents.  The rally was met with aggressive selling from the farmer both in the US and Brazil and that really knocked the wind out of beans as they ended up only 2 cents higher on the day. For the week, March soybeans lost 7 ½ cents.

Soybean inspections were good at just over 34 million bushels. So far soybean inspections are right on pace with the USDA export target. The delayed export sales data we saw for 12/20/18 was really good but it included the goodwill soybean purchases that China used to soften trade negotiations.  

In Brazil, the Mato Grosso bean harvest is 25.6% complete vs 12.4% last year.  AgRural puts all of Brazil’s bean harvest at 13% complete vs. 3.8% last year. The hot and dry weather is pushing the beans to an even master maturity and harvest is in full swing. The vessel lineup at Brazilian ports are huge and ready to ship the newly harvested beans.   

The African Swine Fever in China continues to spread and is still a major issue for them.  There has been a major drop in the soybean meal price in China and the disease is being blamed for lower hog numbers.  This could also have a material impact on the soybean import forecast if the disease continues to roll through the country.



South Korea detects first case of foot and mouth disease since March of 2018. Livestock disease issues are a huge issue in Asia right now. Packer margins are holding steady with values from last week about $65/head. While the US government tries to get funding to build a wall, Denmark is actually building on the German border.  This wall is designed to keep out wild boar bearing the African Swine Fever disease. The Danes are hoping to protect their large hog heard as Denmark is a large pork exporter.



EIA shocked the market with a report of record US crude production in November. Underlying support remains from Venezuela and Iran sanctions, and OPEC+ cuts. Gasoline inventories declined by 2.2 million barrels, the first weekly draw in the past 9-weeks as gasoline demand jumped to its highest level since. AAA is reporting a national average gasoline price of $2.259, down from $2.274 last week and compared to $2.594 at this time last year.