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Traders Prepare for Friday’s WASDE Report

Grain markets are quiet once again with some harvest pressure on light overnight volume. Weather maps are providing some market support by showing well below average temperatures throughout the north and central Midwest over the next 10 days with some heavy snow fall expected later next week.

USDA weekly crop progress report showed corn conditions at 58% GTE (58% GTE expected, 58% last week), corn harvest rating at 52% complete (54% expected, 41% complete last week, 74% last year, 77% 5-year average).  Soybean harvest rating at 75% complete (75% expected, 62% last week, 81% last year, 87% 5-year average).  Winter wheat conditions at 57% GTE (56% GTE expected, 56% last week and 51% last year).  Winter wheat planting at 89% complete (91% expected, 85% last week, 83% last year).

China is reportedly pushing for more concessions from the U.S. in return for its phase-one promises, aside from scrapping the December 15 tariff.  Specifically, Politico reported China is making a full-court press to convince President Trump to scrap the 15% tariff on about $110 billion of Chinese goods that went into effect on Sep 1.  The Financial Times then reported the Trump administration is in fact discussing whether to scrap the Sep 1 tariff, according to "five people briefed on the discussions."

President Trump seems eager to get a phase one deal signed and have the signing ceremony somewhere in the U.S.  However, it remains unclear whether he wants a deal badly enough to scrap the September 1 tariff.  If Mr. Trump agrees to scrap the September 1 and December 15 tariffs, he would still have in place the 25% tariff on $250 billion of Chinese goods as leverage to use in phase two of the trade negotiations.

Analyst estimates for this Friday’s USDA November WASDE report showed an average estimate for corn harvest at 81.3 million acres (81.8 million on last report), average corn yield at 167.2 bu./acre (168.4 bu./acre last report) with corn production at 13.604 (13.779 last report).  Soybean harvest analyst average was 75.5 million acres (75.6 million acres last report), average soybean yield at 46.6 bu./acre (46.9 bu./acre last report) with soybean production at 3,513 (3,550 last report). 

Brazilian soybean growers have planted 46% of the estimated area in the 2019/20 crop, which they started sowing around September, this is below the level of 60% seen last year, AgRural said, citing scarce rains.  Brazil will collect an estimated record of 121 million tonnes of soybeans this season after increasing the area to 36.4 million hectares (90 million acres), AgRural said.

China's ag ministry said it will reduce the number of small-scale slaughterhouses to better prevent and control African swine fever.  There are too many small slaughterhouses in some places in China, equipped with old facilities and backward production techniques, and checks on the pork quality are not done properly, the Ministry of Ag and Rural Affairs said.

Brazilian government said China has approved seven meatpacking plants in the state of Santa Catarina for the export of pork innards.  Exports can begin immediately, Ag Minister Tereza Cristina Dias said, adding that the approvals came as a result of talks held during President Jair Bolsonaro's visit to China last month.

USDA reported last week’s cash cattle for 35% - 65% choice grading cattle at $111.98 ($109.79 last week). The All Grades section ran at $113.03 ($113.03 average last week, $110.13 two weeks ago).

Published on AgWeb: 11/5/2019 by Paul Georgy

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