December 14, 2020
Good Morning,
Markets are quiet this morning with corn unchanged, soybeans up 5 and wheat down 10. Coming into this morning the thought was that markets would trade higher with the US administering Covid-19 vaccines starting this week.
The U.S. Food and Drug Administration gave emergency approval to Pfizer’s Covid-19 vaccine late last week, with CDC giving its rubber stamp on Sunday. The first of the supplies have already been shipped around the country, with medical teams expected to start administering doses of it today. Covid-19 will likely continue to make headlines until our society reaches herd immunity. That means that enough people have antibodies from having contracted the illness, combined with those who have antibodies from the vaccine, to slow the spread of the virus and it starts to disappear. Health authorities believe that could happen by June. The vaccine will first be given to healthcare workers and to high risk individuals – such as the elderly. This should further reduce the death rate from the virus as one of the first indications of progress, along with reducing pressure on hospital ICU bed utilization.
China is fixated on a zero-tolerance policy for Covid-19. It locks down large population centers if it finds a few cases of the virus. Most concerning to U.S. producers are the steps it is taking against imported meat. The central government gave responsibility for managing the risk of Covid on imported meat to local provinces and cities. Nobody wants to be held responsible for an outbreak, so they’re going overboard with restrictions. Today’s China Direct newsletter from our Shanghai office describes a story that went viral in China about how consumers in Hubei were being fined for buying imported pork from a common online delivery platform. The city had previously banned the sale, purchase or storage of imported frozen products. Furthermore, a sample from that batch of Brazilian pork had tested positive for the coronavirus, leading authorities to require citizens of that city to pay to be tested, in addition to the fine for possessing the imported meat, while being confined to home isolation for the quarantine period. These obstacles are creating fear among consumers, making them wary of buying imported pork.
Have a Safe Day!
Garry Gard
920-348-6844
December 11, 2020
Good Morning,
Markets are quiet this morning with corn and soybeans trading 1 lower and 1 higher respectively. This will probably be the case moving forward until we get updated supply estimates for the United States in January. In yesterday’s report the USDA left the U.S. corn balance sheet completely unchanged this month as was expected. Weekly ethanol production and exports have been good enough to justify current estimates and feed/residual won’t be updated until December 1 stocks data can be incorporated. On the global front, the USDA cut the Argentine corn crop to 49.0 million metric tons (mmt) vs. 50.0 mmt last month and 51.0 mmt last year. The USDA left their estimate of the Brazilian corn crop unchanged at 110.0 mmt even though Brazil’s state forecaster CONAB is at 102.6 mmt. It was encouraging to see the USDA raise their estimate of Chinese corn imports to 16.5 mmt from 13.0 mmt last month. Considering China already has 11.3 mmt worth of corn imports on the books, the USDA’s estimate of 16.5 mmt could still prove too small.
The December WASDE wasn’t much of a feature for soybeans either, although carryout and the stocks/use ratio tightened further. In general, soybeans remain in a consolidative mode much like corn, making day-to-day price action difficult to manage. South American weather remains the largest factor, at least until the focus can be brought back to the United States in January.
As I have been saying for the last few weeks, South American weather and Chinese sales/cancellations are going to be the market movers for the foreseeable future. While I believe China will continue to buy US soybeans with the later supply from South America expected, I have heard from some very reliable sources that they expect China will cancel some of the purchases currently on the books.
With corn and soybean cash prices at profitable levels for both old and new crop corn, producers should be making sales. We may see a late winter/early spring acreage push, but nothing is guaranteed. As the saying goes “A bird in the hand is worth 2 in the bush”! Let’s take the bird and make sure we can farm another year.
Have a Safe Day!
Garry Gard
920-348-6844
December 10, 2020
December 10, 2020
Good Morning,
Markets are quiet after the release of todays USDA report. Corn is currently unchanged and soybeans are up 8. Here are todays numbers.
USDA 2020/21 US grain ending stocks (Billion bu.)
| December Est. | November Est. | |
| Wheat | .862 | .877 |
| Corn | 1.702 | 1.702 |
| Soybeans | .175 | .190 |
USDA 2020/21 World ending stocks (Billion bu.)
| December Est. | November Est. | |
| Wheat | 316.50 | 320.45 |
| Corn | 288.96 | 291.43 |
| Soybeans | 85.64 | 86.52 |
As expected no real surprises. South American weather and Chinese purchases or cancelations will move the market either direction until the January report.
Have a Safe Day!
Garry Gard
920-348-6844
December 9, 2020
Good Morning,
Stronger markets this morning with corn up 3 and soybeans up 10.
The Trump Administration offered a $916 billion dollar stimulus pact to potentially be settled by year end. Pelosi and Schumer said in a joint statement that it marked progress because it brought McConnell closer to the $908 billion framework unveiled last week by the group of Democrats and Republican lawmakers. But they said its omission of supplementary jobless benefits was unacceptable and backed the continuing bipartisan effort at crafting a compromise. The plan differs from the alternative that Pelosi and Schumer endorsed as a basis for fresh talks. It includes $600 stimulus payments to individuals, which could win support from both Democrats and Republicans, but it pays for that part by cutting the bipartisan proposal for $300 a week in supplemental unemployment aid.
No different than any other time there continue to be rumors of Chinese cancelations and rumors that China is looking for a whole host of ag and energy to purchase into year end. Ethanol and US meats look to be big potential purchases. Until the sales are made and the ships unloaded on their docs its all up in the air.
Tomorrow the USDA will release its December S&D report at 11am. Ending stocks for corn and soybeans are expected to drop slightly.
Have a Safe Day!
Garry Gard
920-348-6844
December 8, 2020
Good Morning,
Markets opened lower again this morning with corn down 3 and soybeans down 14. Yesterday the markets recovered from the early selloff with corn posting a 4 cent gain while soybeans closed 5 lower.
USDA report Thursday. Traders do not look for any big changes to US corn, soybean or wheat 2020 balance sheets. Conab SA crop estimate is also out Thursday. Trade estimates have Brazil corn at 109 mmt vs USDA 110. Soy 132 vs 133.
Scattered showers are falling across the Northern 2/3rds of Mato Grosso. Rainfall totals are from .5-1.5 inches. These rains are much less than normal, this is a time when Mato Grosso sees triple that amount of rain. The coverage of this rain event is disappointing. There will be another chance in a couple days for another .5-2.5 inches. Southern Brazil and Argentina will remain in a dry trend all the way out till Christmas.
Look for more days of trading like yesterday leading up to Thursdays report. The market should be supported ahead of the crop report, and the continued dryness in Southern Brazil and Argentina.
Have a Safe Day!
Garry Gard
920-348-6844
