President Trump said that the U.S.-China trade deal would now be of secondary importance to coronavirus and has threatened new tariffs on China. Jobless claims for the week ending April 25th were 3.84 million, which brings the 6-week total to 30.3 million. The May WASDE report will be released May 12th and will include the first supply/demand sheets for the 2020/2021 crop year.
APK lowered its Ukrainian corn crop forecast from 36 million tonnes to 35.1 million tonnes. The International Grains Council (IGC) released their monthly “Grain Market Report” and showed corn production rose 1 million tonnes to 1158 million tonnes
Ethanol production decreased by 26,000 bpd this week to 537,000 bpd. This is the 8th straight week of production declines. Production is at the lowest levels since the infancy of the US ethanol program. Ethanol inventories decreased by 1.4 million to 26.3 million barrels, dropping back from the highest level ever. The FDA has become stricter on the use of ethanol in hand sanitizer and has notified several companies that their ethanol does not meet the standard needed to produce hand sanitizer. Weekly export sales were 1,356,700 tonnes, which was above estimates of 700,000 to 1,200,000 tonnes. Corn planting is expected to be near 50% on next Monday’s weekly crop progress report. Hearing some acres are shifting from corn into soybeans, HRS, and sunflowers. At this period last year corn planting was 15%. The 2014-2018 average is 27%.
APK lowered its forecast for the Ukrainian 2020 wheat crop from 26.7 million tonnes to 24.5 million tonnes. The International Grains Council (IGC) released their monthly “Grain Market Report” and showed world wheat production fell 4 million tonnes to 764 million tonnes.
Weekly export sales were 467,400 tonnes, which was above estimates of 100,000 to 300,000 tonnes. The latest drought monitor has dry areas spread into Kansas and Oklahoma which is adding concern to areas hit by the late spring freezes.
The Buenos Aires Grain Exchange reported that the Argentine soybean harvest is 68.2% completed with production at 49.5 mmt (the USDA is currently at 52.0 mmt).
Weekly export sales for soybeans were 1,078,300 tonnes, which was within estimates of 700,000 to 1,200,000 tonnes; soymeal sales were 163,600 tonnes, which was near the middle of estimates of 100,000 to 250,000 tonnes; soyoil sales were 29,800 tonnes, which was near the upper end of estimates of estimates of 8,000 to 30,000 tonnes. Two morning export sales announcements occurred this week with both being soybeans heading to China and Mexico.
The JBS beef plant in Greeley, CO has reportedly had a surge in coronavirus cases after the plant reopened last week. According to the US Meat export Federation through February one-third of pork and pork variety meat exports went to China. The USDA reported 50,300 MT of pork was exported from April 17-23 of that total, 35,100 MT or 69.7% went to China. Smithfield Foods, Inc is the largest pig and pork producer in the world and a wholly owned subsidiary of WH Group of China. Boxed beef values are record high which is keep packer margins also at stunningly high levels. Packer margins are well above $700/head.
The new OPEC+ agreement goes into effect today. The cartel will remove 9.7 million bpd of crude oil from the market, amounting to nearly a 10% decrease in global production. Despite the planned draw-down in production from the cartel, global inventories continue to surge. Total oil products held in the ARA refining and storage hub rose by nearly 12% last week, according to data from Reuters. The U.S. is working on ways to expand crude storage space, with the potential to add several hundred million barrels to it, according to Treasury Secretary Steven Mnuchin. The current national average price of retail gasoline is $1.777, up slightly from the $1.772 reported on Thursday. Prices a month ago at this time were $1.984.