Weekly Market Recap


The next WASDE report will be released Tuesday, February 11 at 11am CT. The USDA says they will not use details from the Phase 1 trade deal in the supply and demand data. China announced they will cut the tariff increases imposed in September by half on $75 billion in U.S. goods starting February 14. Tariffs on crude oil and soybeans will be reduced from 5% to 2.5%. The trade war tariff that still remains on US soybeans is still 27.50%. Even with the cutbacks in tariffs, the Chinese government still needs to give out tariff quotas to waive the remaining tariffs on U.S. beans, but there is no interest due to the U.S. being uncompetitive in prices. U.S. Trade Representatives said they will also halve some tariffs on Chinese goods. The phase one trade agreement officially begins February 15.


BAGE estimates Argentine corn planting is 98.8% complete vs a 96.4% 5 year average, with conditions down 1 pt to 59% good-to-excellent. EMATER estimates Rio Grande do Sul corn harvest is 33% complete vs a 28% 5 year average. Brazil’s Trade Ministry reported January corn exports at 2.293 MMT vs 4.368 MMT in December and 3.866 MMT a year ago. Brazil’s ethanol exports totaled 78.1 million liters vs 146.6 million in December and 104.7 million in January 2019.

The RFA says E15 sales in Minnesota are up 32% from last year, after seasonal sales restrictions were lifted. MN is the only state that tracks monthly blend sales. Weekly ethanol production was up 52,000 barrels per day to 1,081,000 bpd, the biggest increase of the year. Ethanol stocks were down 0.7 million to 23.5 million barrels. Ethanol margins are a positive 1 cent, up 5 cents from last week. U.S. ethanol exports in January were 146 million gallons vs 107.2 million in December and 139.9 million in 2019, with India and Korea the largest buyers. USDA December Grain Crush showed corn used for ethanol at 479.2 million bushels vs 456.7 million last month and 461.6 million a year ago. Sorghum used for ethanol was 9.5 million bushels vs 7.2 million in November and 5.5 million in Dec 2018.


The U.S. and Kenya will begin work on a trade deal, as both sides see “enormous potential.” Reuters reports that Kenya will, “adopt standards that will allow U.S. wheat growers access to its markets.” French wheat exports in December totaled 1.2 MMT, a marketing year high. There were rumors this week that China bought 6-11 cargos of French wheat. Stats Canada estimates all wheat stocks at 24.982 MMT, little changed and within estimates of 23.8-25.4 MMT. Durum stocks are 4.516 MMT, down from 5.478 MMT last year but above the 4.2 MMT trade estimate.




Argentina has had perfect weather for their soybeans so far, with 2 week forecasts also looking favorable. Crop conditions are rated 99.9% fair or better. The BAGE said that 96% of the soybean crop has adequate moisture thanks to the rains and that their production estimates are at 53.1 MMT, which is down 2 MMT from 2018/2019. US Ag attaché to Brazil raised their soybean production estimate from 123.5 MMT to 124.5 MMT vs USDA at 123 MMT. EMATER says RGDS beans are 33% flowering and 42% filling. Stats Canada estimated canola stocks at 14.271 MMT vs 14.588 MMT last year. World vegetable oil ending stocks are the lowest in 10 years at 19.58 MMT.

The December NASS Fats and Oils report showed crush at a monthly record 184.7 million bushels vs 183.8 million last year. Soyoil stocks totaled 2.094 billion pounds vs 1.88 billion in November and 1.946 billion last year. Oil yield was 11.43 lbs/bu vs 11.45 in November and 11.62 in Dec 2018. Soybean export sales were ok this week at 704,000 tons but were below the magic 1 million ton mark for the 7th straight week.  Soybean oil sales of 53,000 tons was the 2nd highest total of the year.



Cash trade was around $121 this week.  Feb cattle futures closed the week at 121.325 which is right in line with the cash.  Packer margins have stabilized for the time being and are running near $40 head. Monthly export data on pork painted a much different story than the weekly data.  The monthly data is much more comprehensive of all pork leaving the country.  US pork exports to China were 102,000 tons which is HUGE. Most months prior to this year were between 20,000 and 40,000 tons. 


Refiners in China have scaled back processing of crude through refineries by 2 million bpd over the last week, people familiar told Bloomberg. This could fall further as aviation and transport demand continues to be impacted as entire cities are in lockdown. According to GasBuddy Head of Petroleum Patrick DeHaan, if the coronavirus situation in China continues, prices could fall another 5-15¢. The national average for regular gas in the U.S. is $2.452 per gallon.