Carolyn Beatty

Jan 24, 2020


Secretary of Ag Sonny Perdue confirmed the 3rd round of MFP 2.0 payments will be coming, but not to expect an MFP 3.0. The coronavirus outbreak in China is grabbing headlines around the world. Fear about how quickly the disease can spread that has the world watching. News sources confirm that China is locking down two cities at the epicenter of the coronavirus outbreak that has now killed 17 people and affected 600 people. Wuhan (population of 11 million) and Huanggang (7 million people). The first reported case in the U.S. happened this week in Washington state. President Trump is expected to sign the USMCA during a white house ceremony next week Wednesday. Canada still has to ratify the agreement.



China could fulfill its Tariff Rate Quotes in corn as outlined by the WTO by buying US corn. If that were true, that could turn into 7.2 MMT of corn imports (The USDA currently estimates Chinese corn imports at 7.0 MMT). Some concern is growing about dryness in the corn growing areas of Brazil, especially towards the effects it could have on the safrinha crop in Mato Grosso which produces 42% of the total second corn crop. Mato Grosso has seen 57% of its normal precipitation the last two weeks. BAGE put Argentina’s bean planting at 98% complete with conditions up 4% vs. last week at 66% good/excellent.  They put the corn at 95% complete with conditions 59% g/e. The US attaché in Argentina put the corn crop at 48 mmt, down from the USDA’s 50 mmt estimate.

There is continued concern over the quality of the corn crop in the northern plains as west coast exporters struggle to remain competitive. Traders are skeptical China will come to the PNW for U.S. corn given the poor-quality issues. Ethanol production decreased this week by 46k bpd to 1,049,000 bpd. Ethanol inventories increased by 1.0 million to 24.0 million barrels, the highest stocks level since July. Net ethanol margins were 1 cent lower this week and are 12 cents negative. Corn export sales were good at just over 1 million tons, coming in above expectations. This is best sales total in 5 weeks, and the 3rd best sales of the year.



Egypt is looking into the addition of India as an acceptable origin for its international wheat tenders.

SRW deliverable stocks are the lowest in 12 years and export sales have been strong the last 5 weeks.



Early soybean yields in Mato Grosso, Brazil are running 10%-15% higher than last year, according to Agroconsult.  Agroconsult pegged Brazil’s soybean crop at 124.3 mmt in pre-crop tour estimates.  Brazil’s bean harvest was 1.8% complete vs. 2.7% average as of last Thursday.

Soybean sales were ok this week, but below the 1 million ton mark for the 5th straight week. Meal sales were outstanding with the highest total of the marketing year. Soybean oil sales were also really strong with the best tally of the year.



Cash cattle trade has been mostly steady this week between $124-126. Packer margins picked up a little from last week and are around $55/head.  The latest cattle on feed report was pretty neutral.  Placements were 103% slightly below estimates of 103.4%.



Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman has stated that all options are open at the OPEC+ meeting in early March, including further cuts to oil production. Brazilian crude production in 2019 grew 7.78% from the year prior and surpassed 1 billion barrels of annual production for the first time ever. The outbreak of the coronavirus could hit Chinese gasoline demand during their driving season which peaks in late January to early February, as millions of people travel to celebrate the Chinese New Year. Travel warnings due to the outbreak are likely to keep more people at home and off the roadways.