Good Morning from Allendale, Inc. with the early morning commentary for August 16, 2019.
Grain markets are steady as the market looks oversold following sharp declines and export sales were within expectations. Weather forecasts continue to look good for crop development across much of the Midwest during the next few weeks also leave a bearish tone across the grain markets.
China vowed to counter the latest U.S. tariffs on $300 billion of Chinese goods but called on the U.S. to meet it halfway on a potential trade deal, as President Trump said any pact would have to be on America's terms. The Chinese finance ministry said the new U.S. tariffs, violated a consensus reached between President Trump and Chinese President Xi Jinping at Junes summit in Japan to resolve their disputes.
NOPA Crush numbers showed July crush at 168.093 (estimated 155.826, 148.8 last month, 167.7 last year). Soyoil stocks came in at 1.467 billion lbs. (1.530 billion lbs. estimated, 1.536 last month, 1.764 last year).
Export sales showed corn sales of 363,800 tonnes (expecting 200,000 to 700,000 tonnes), soybean sales of 707,600 tonnes (expecting 150,000 to 700,000 tonnes), wheat sales of 474,500 tonnes (expecting 200,000 to 500,000), soymeal of 274,300 tonnes (expecting 175,000 to 400,000), and soyoil sales of 1,000 tonnes (expecting 8,000 to 32,000 tonnes).
Midwest bankers reported the percentage of farm loans their customers are having problems repaying hit a 20-year high in the second quarter of this year, according to the Federal Reserve Bank of Chicago. "The portion of the Districts agricultural loan portfolio reported as having 'major' or 'severe' repayment problems (6.2%) had not been higher in the second quarter of a year since 1999," the report said.
Managed money funds continued selling an estimated 5,000 soybean contracts, 3,000 wheat, 3,000 soymeal. They were thought to be buyers of 2,000 corn contracts and 1,250 soyoil.
Strategie Grains has made a sharp increase to its forecasts for European Union production and exports of wheat this season due to strong harvest expectations in France and Britain along with competitive EU export prices. They now see 2019/20 soft wheat production in the EU at 142.9 million tonnes (140.6 million tonnes last month).
Tyson officials say a spark from welding during maintenance is the likely cause of a fire that damaged the company's plant in Holcomb. Company officials said the fire damaged a small area but affected critical operating systems. Tyson's president and CEO, Noel White, told officials work will begin immediately on structural damage. Other repairs, primarily electrical, will take more time.
China made its largest purchases of U.S. pork in seven weeks last week after the Chinese government said Chinese companies have suspended purchases of American agricultural products, according to USDA data.
Dressed beef values were higher with choice up 3.78 and select up 4.75. The CME feeder index is 139.15. Pork cut-out values were down 0.67.