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Weekly Commodity Report.

06/06/2019

Prices Retreat on Improved Planting Data but Concerns Over Yields and Ingredient Costs Prevail.

The following quotations for July and September 2019, as indicated below were posted by the CME at 15H00 June 6th together with values for Tuesday June 4th in parentheses. Over the past week the commodities market recorded a moderate decrease in the futures prices of corn, soybeans and soybean meal. The run up in mid-May was due to slow progress in planting, reduced acreage and the prospect of diminished yields.

The absence of any definitive news regarding finalization of the trade dispute with China and previous conflicting statements by White House spokespersons over the months since the dispute began is disconcerting to the commodities market and

Has contributed to fluctuation in prices.

COMMODITY

 

Corn (cents per bushel)

July 421 (425)

Sept. 430 (434)

Soybeans (cents per bushel)

July 868 (880)

Sept. 882 (880)

Soybean meal ($ per ton)

July 316 (320)

Sept. 319 (322)

Changes in the price of corn, soybeans and soybean meal this past week were:-

COMMODITY CHANGE OVER 3 DAYS

Corn: July quotation down 4 cents per Bu           (-0.9 percent)

Soybeans: July quotation down 12 cents per Bu (-1.4 percent)

Soybean Meal: July quotation down $4 per ton.   (-1.3 percent)

  • For each 10 cent per bushel change in corn:-

The cost of egg production would change by 0.45 cent per dozen

The cost of broiler production would change by 0.25 cent per pound live weight

  • For each $10 per ton change in the price of soybean meal:-

The cost of egg production would change by 0.40 cent per dozen

The cost of broiler production would change by 0.25 cent per pound live weight

This week egg producers will benefit by a reduction of 1.1 cent per dozen in feed cost based on futures prices prevailing during the third week of May.

COMMENTS

Please review the Crop Progress Report in this edition documenting the rate of planting and emergence of corn and soybeans compared to the five-year average.

Negotiations with China are apparently at a standstill following shuttles between Beijing and Washington in Late April. Some concessions were promised by China to reducing coercive trade practices and clarify dispute resolution as amplified by President Xi addressing participants in a Belt and Road Conference in early May. From an agricultural perspective the question of delays by China in approving new GM cultivars has yet to be settled. No date has been set for a summit to sign a trade deal that is as elusive. Prices will be influenced by the trend in stock levels, area actually planted in 2019 and early crop progress in the face of flooding.

According to the May 10th 2018 WASDE Report #588, 85.4 million acres of corn will be harvested in 2019 to produce 15.0 Billion bushels. The soybean crop is projected to attain 4.2 Billion bushels from 87.8 million acres harvested. The levels of production for the two commodities are based on current planting, projections of yield and acreage. The WASDE to be published in June will confirm the acreage actually sown to corn and soybeans respectively.

See the WASDE posting summarizing the May 9th USDA-WASDE Report #588 under the STATISTICS tab documenting price projections and quantities of commodities to be produced, used and exported from the 2019 harvest.

Unless shipments of soybeans to China resume in volume, now a distant hope, the financial future for row-crop farmers appears bleak despite the release of two tranches in 2018 amounting to $8 billion as "short-term" compensation for producers of commodities. A further allocation of $14.5 billion to producers under the Market Facilitation Program was announced on May 23rd for the 2019 crop.