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Weekly review

November 20, 2019
By Kristi Guse - Columnist , Farm News

Reports are the signing of an interim trade deal could be delayed until December, due to continued discussion over terms and a new location to meet since the APEC Summit was cancelled. According to a White House official, a trade deal is likely to happen. Reports are that U.S. and Chinese officials are considering rolling back tariffs from September and canceling tariffs in December.

Crop ratings showed the corn crop at 96 percent mature, still 4 percent behind the 5-year average.

Corn harvest made 11 percent progress last week, now at 52 percent complete, but still 23 percent behind average.

Trade was looking for a 14 percent gain for the week.

Soybean harvest improved 13 percent on the week at 75 percent completed, in line with trade estimates. There are several states with over 40 percent of soybeans yet to harvest and all three of the big "I" states of Iowa, Illinois and Indiana have 20 percent or more to complete.

According to the USDA, total farm income for 2019 is expected to total $88 billion, which would be the highest total in the past five years. Despite the increase, chapter 12 bankruptcy filings have increased 24 percent from September 2018 to September 2019. The largest number of filings were reported Wisconsin, Georgia, Nebraska, and Kansas. The third quarter of 2019 showed fillings decreased from the prior year.

Eight weeks into the marketing year, cumulative corn sales are down 48 percent from one year ago, with outstanding sales down almost 40 percent year over year. Both remain well off the suggested pace of the USDA's export estimate of 1.9 billion bushels from last month's Supply and Demand report. September corn exports were at 79.85 million bushels, which is the lowest for that time of year since 1975. That's still lower than the drought year of 2013 by 950,000 bushels. The trade is looking at whether the USDA will reduce the export numbers going forward, which will most likely lead to an increase in ending stocks for the year.

Census soybean exports were at 16.63 percent higher than last September, with China having 24 percent share of the shipments. Brazil's soybean exports were at an all-time high for October, but the overall exports are still behind the record setting pace of 2018.

According to the USDA, global soybean consumption for the 2019/2020 marketing year is estimated at 352.34 MMT. This is an increase over the last year's 345.34 and the prior year's 338.50MMT. Many expected a lower consumption figure due to African swine fever cutting an estimated 30 percent of global hog feeding. The expansion of poultry and aquatic feeding has been attributed to the increased soybean consumption. Expansion in those industries are looking to fill the void of protein caused by spread of the disease.

China has been actively taking steps to increase their access to protein as African swine fever has massively cut supplies. It was announced that China has recently signed a trade deal with France. The deal allows 20 French companies to export beef, pork, and poultry to China. China's foreign ministry also stated they will resume imports of Canadian pork and beef. Months ago, political tensions between the two countries prompted China to ban the products.

For more information, you may contact Kristi Guse at (712)-260-6486, or e-mail at kguse@maxyieldgrain.com. The opinions and views expressed in this commentary are solely those of Kristi Guse. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.

 
 

 

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