Good Morning from Allendale, Inc. with the early morning commentary for February 12, 2019.
Grain markets continued sliding with corn and soybean futures down slightly as they wait for an update on the U.S. - China trade talks and possible government shutdown at the end of the week. Chicago wheat futures eased as well as large global supplies overshadowed lower U.S. acreage estimates. Weekend showers in Brazil have also eased crop concerns after dry weather has led forecasters to cut their production estimates for their ongoing harvest.
Senior U.S. lawmakers said last night they had reached an agreement in principle to fund border security and avoid a partial government shutdown this weekend. The top four lawmakers on the House and Senate Appropriations committees said they had agreed to a framework for all seven spending bills whose funding expires at 12:01 a.m. Saturday. No other details were disclosed.
The E.P.A. said it is considering a release of its draft proposal to expand sales of higher ethanol blends of gasoline without including measures to curb biofuel credit speculation, which was promised to the oil industry, according to several sources familiar with the matter. The agency is working to release its draft rule for E15 by the end of this month and is planning to expedite the rule-making process to finish it by June when seasonal driving demand picks up.
Corn and soybean spot basis bids fell sharply at terminals along the Illinois River, pressured by higher barge shipping costs linked to rising water levels, grain merchants said. Basis bids were steady to higher at inland processors and elevators, supported by minimal farmer sales.
AgRural predicts Brazil's output at 112.5 million tonnes this season (116.9 million last month) due to hot and dry conditions in soybean fields. "If the forecast is confirmed, it will be the country's smallest harvest in three crops," the consultancy said.
Russia's agriculture ministry announced they will set up a new grain exporters' union to better understand the needs of the market, after its routine meeting with local grain traders. The new union will be created by April 2019, when the ministry plans to start discussing grain export plans with traders for the 2019/20 marketing season.
U.S. oil prices were higher amid OPEC-led supply cuts and U.S. sanctions against Iran and Venezuela, although growing U.S. production and concerns over economic growth kept markets quiet.
USDA pegged hog slaughter numbers at 444,000 head as Smithfield's Tar Heel plant intentionally did not run today. The firm plans to make up the numbers this Saturday.
The Cattle Report and Cattle on Feed Report will be listed on February 28th and 22nd respectively. The January Cold Storage report will be issued on February 22. The February Cold Storage report will be released on March 7.
Dressed Beef Values were higher with choice up 1.53 and select up 2.69. The CME feeder index is 141.73. Pork cut-out values were up 0.64.