The day of enlightenment has arrived. The messenger is walking through the corridors of the temple located at the corner of Independence Avenue and Southwest Street in Washington DC, holding in hand the most current Word of Gov. that will ultimately be delivered to we commoners later this morning. Will they offer us a blessing or a curse? Only time will tell, and for now, all we can do is wait patiently. Maybe I should not make light of the reports this way as they can certainly create an impact, at least short-term, on many of our livelihoods. That said, it seems that many in the trade have forgotten that these are still estimates, and as with all estimates, are prone to errors and revisions. It is not the final word from some deity that processes knowledge unavailable to we mere mortals and should be treated as such when it is released. All that said, once again, here are the trade survey estimates;
Corn production is estimated to come through at 13.623 billion bushels coming from 81.39 million harvested acres and a yield of 167.4 bpa. This compares with 13.779, 81.815, and 168.4 last month. For beans, we find an average trade production estimate of 3.512 billion bushels from harvested acreage of 75.36 million and a yield of 46.6 bpa. 2019/20 corn ending stocks are estimated to come in at 1.808 billion, compared with 1.929 last month, beans at 430 million versus 460 in October, and wheat at 1.032 billion instead of 1.043.
We do have a couple of nice sales reported in the daily system this morning. 270,000 MT of beans and 217,040 MT of corn have been sold to unknown destinations.
Looking around the rest of the world as we wait, we have been informed by France’s AgriMer that corn harvest increased another 14% this week and has now reached 79% complete. Soft winter wheat planting is 67% complete, up 13%, and winter barley now 81% complete. Not unlike us here, much of the fall has been quite wet across Europe, so harvest/planting has been slower than usual. Further east, ProAgro lowered its estimate for the Ukraine corn crop from 37.37 MMT to 35.68 MMT. In the southern hemisphere, ABIOVE is now projecting a Brazilian bean crop of 122.8 MMT, which would be up 5 MMT from last year and would be a new record. Needless to say, Brazil has the rest of the growing season, let alone planting to get through, before these become anything more than possibilities. In Argentina, farmers have significantly increased forward sales of corn and beans, attempting to get ahead of what could be higher taxes once the new President Fernandez takes over on the 10th of December. If you recall when Christina Kirchner was president between 2007 and 2015, she had raised taxes on corn exports to as high as 20% and beans 35%. She is now the vice-president-elect.
Tell-tale signs of the AFS disaster continue to be reflected in China as bean imports for October were 6.18 MMT, down nearly 25% from September. Rabo Bank now estimates that China will import 4.6 MMT of pork in 2020, which would be up from 3.2 MMT in 2019 and 2.1 MMT in 2018. Food consultant group Gira predicts that China’s import demand for pork will not peak until 2022, and its hog industry will not have fully recovered until 2027. Still, even then, it will not reach back to 2018 levels as consumer habits will have shifted.
If we were to have wrapped up the week at the morning break, December corn would be down 14-cents and suffered the largest weekly break in two months. December wheat would be down 5-cents and January beans down less than 2-cents. By the way, the S&P 500 is on track to record a new high weekly close for the second week in a row. At least some are encouraged with the U.S./China news.