Morning Comments; Thursday, September 12th, 2019

All attention in the market is on the USDA reports that will be released this morning. Trade has anticipated this report ever since the August numbers were released as many disagreed with the data that report contained. The main area if interest is on corn production, as this years corn crop is projected to be higher than what privates had believed it should be. Since then, several private reports have been released that indicate the corn crop may not be as small as earlier thought. While most attention this morning will be on production, we also need to keep the demand figures in sight. It is quite possible that any reduction to production today may be offset with lower demand. This is not just on corn, but on all commodities. Aside from the WASDE report, trade will focus on weather as conditions are expected to be quite favorable for the remainder of the month. A few long-range models are showing above normal temperatures through early October which will greatly reduce frost chances.

Highlights

* WASDE report at 11:00 CT, Noon ET

* China/US relax some tariffs on products

* Most products seeing tariff relief are industrial

* China continues to look elsewhere for commodities

* Ethanol reserves down 1.3 million barrels last week

* Rail traffic down 6.2% last week

* US temps turn above normal, minimal chance of frost

Corn

* Yield est at 166.5 bpa, -2 bpa from August

* Crop at 13.6 bbu, was 13.9 bbu in August

* 2019/20 carryout at 1.93 bbu, down from 2.18 bbu

* Global corn supply to shrink 5 mmt

* Buyers taking feed wheat over corn

Soybeans

* Yield est 47.1 bpa, 48.5 bpa in August

* Crop at 3.56 bbu, 3.68 bbu in August

* 2019/20 carryout to decline from 755 mbu to 655 mbu

* World stocks to decline 1 mmt

* China approves Argentine soy meal imports

Wheat

* New crop c/o estimated at 1.02 bbu

* Global wheat stocks nearly unchanged

* Wheat/Corn spread favors wheat feeding

* French exports to reach 4 year high

* Quality may deter US export interest

Livestock

* China does not remove pork tariff

* China claims to have adequate pork reserves

* Markets oversold, due for correction

* High hog slaughter numbers

* Cattle traders expect higher beef demand




 

Market Commentary provided by:

Karl Setzer Grain Commentary