Row crop futures find overnight support.
Row crop futures found stability overnight while wheat futures stayed mixed, as stability from yesterday's large decline came from strong cash markets and end-user pricing. The bulk of yesterday's selling was tied to fears that the US-China rhetoric at their trade meeting in Anchorage, Alaska, was becoming adversarial. There were concerns that the open and viewable confrontation would cause a breakdown in relations and China's withdrawal from its Phase 1 Agreement. It's not likely there is a breakdown, other than both were airing grievances. Phase 1 ag demand from China will continue, but at risk is that the harsh rhetoric could lead to a slower than the desired start of Phase 2 negotiations. The Phase 1 deal was a 2-year pact that will need to be renegotiated by 2022.
As of yesterday, including announced US corn sales to China this past week, the US has now sold more than 2,500 Mil Bu of US corn or 96% of the USDA annual forecast. And with a drought threatening the Mexican corn crop, the US is in a position to export 3,000 Mil Bu of 2020/21 corn for the 1st time in history. The massive US 2020/21 US corn export program makes 2nd quarter feed/residual use highly important. US 1st quarter corn feed/residual use was record large, and this statistical trend will likely be carried forward to the Dec-February quarter and cause WASDE to raise its annual feed/residual use by 150-300 Mil Bu.
South American weather, a high-pressure Ridge, dominates NE Brazil, producing warm/dry weather for most of Central and Eastern Brazil. This is a worrisome long wave pattern for the winter Brazilian corn crop. The NE Brazilian high- pressure ridge is forcing upper-air humidity southward into Argentina and RGDS in Southern Brazil. Mostly dry weather will prevail for the remainder of the week before a new system pulls across Argentina on Sunday/Monday, producing .4-1.50″ of rainfall over the northern 2/3's of the crop area. A second system is evident for late next week is weaker and will only produce .1-.7″ across Southern Argentina. Below normal temps are featured over the next 2 weeks.
After making new contract highs yesterday in every 2021 contract except April, cattle futures fell alongside a host of other commodity and financial markets on Thursday. A mixed outlook is offered for early trade today. On Thursday, cash cattle trade was limited to the N Plains, where dressed trade was quoted $2 higher from last week at $182. Boxed beef prices closed higher on Thursday and are confirming a seasonal low. The choice value on Thursday rose $.14, and select was up $.52.
Weekly beef export sales hit a marketing-year high of 57 Mil Lbs last week, with 20% of the weekly sales figure made to China. Cumulative beef exports are record large at 375 Mil Lbs, with 11% of China's cumulative total. Outstanding sales of 514 Mil Lbs are 50% more than last year, and 16% of the outstanding total has been sold to China. The USDA should start raising its export forecast in the coming months. The monthly Cattle on Feed Report is out at 2 o'clock today.