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COMMODITY REPORT: January 10th 2020.


Corn and soybean prices were relatively unchanged in wait-and-see mode for the third consecutive week awaiting details on the Phase-1 Agreement with China. The market was ho-hum over the release of the January 2020 WASDE #596. ( see item in this edition).


Uncertainties still include:-

  • The extent and timing of soybean purchases by China in 2020. The U.S and China have apparently reached an understanding on U.S. tariff rescission, concessions on some structural issues by China and enforcement provisions
  • Exports of soybeans to China have resumed with 7.7 percent of projected shipments for 2019/2020 consigned during October and November. Notwithstanding the soybean exports, markets apparently do not sure the same optimism expressed by the White House.
  • Fallout from uncertainty in the Middle East.


Questions still exist:-

· Traders are reviewing projected ending stocks and taking into account the relative sizes of both corn and soybean harvests in 2019

· Brexit is now a certainty after the Conservative Party plan was approved by the House of Commons on Thursday 20th December.

· A U.S. trade agreement with the U.K. will be concluded in 2020 but trade with the U.S. will be conditioned by commitments to the E.U. by the departing nation.

· The relationship with the E.U. is tenuous especially with the threat of retaliatory tariffs by the U.S. on food products from France and auto imports from Germany.

· An unpredictable political situation is delaying ratification of the USMCA by the Senate hopefully in early 2020.

Compared with the January 3rd 2020 close, the CME quotation for March corn posted at close of trading on January 10th 2020 was unchanged at 386 cents per bushel. During mid-December corn rose 6.0 percent and soybeans 2.8 percent based on prospects for commodity exports to China.

The signing ceremony for the recently concluded Phase-1 agreement on January 15th in Washington will be a muted affair. Vice Premier Liu He will represent China.

The following quotations were posted by the CME at close of trading on January 10th. 2020 compared with values for January 3 rd 2020 (in parentheses).



Corn (cents per bushel)

March 386 (386)

May 393 (393)

Soybeans (cents per bushel)

Jan. 935 (930)

May 958 (954)

Soybean meal ($ per ton)

Jan. 299 (297)

May 308 (306)

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


Corn: March quotation unchanged                ( 0 percent)

Soybeans: Jan. quotation up 5 cent per Bu    (+0.5 percent)

Soybean Meal: Jan. quotation up $2 per ton  (+0.7 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 0.44 cent per dozen

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



Subscribers are referred to the January 10th WASDE #596 in this edition.

Prices of commodities are influenced by projections of ending stocks as influenced by the 2019 harvest, 2020 exports and domestic use.

Two tranches of support funding were advanced in 2018 amounting to $12 billion as "short-term" compensation for disruption in trade.

On July 25th the USDA announced an additional $16 million package to support agriculture with Market Facilitation Payment (MFP) funds to be distributed in three tranches. The first payment of $2.5 billion was made with the remainder for the third quarter disbursed through the Farm Services Agency under authority of the Commodity Credit Corporation. A total of $9.6 billion was distributed in September. Payments will be based on a value corresponding to the higher of 50 percent of the producer's calculated payment or $15 per acre, provided a cover crop is planted.

The second MFP payment (November 2019) was $3.6 billion. The third (January 2020) payment, presumed to be $3.6 billion, will in all probability be paid given political and trade considerations. Regulations framed in terms of the Additional Supplementation Appropriations for Disaster Relief Act of 2019 enacted in June will determine eligibility. One million applications were received for the initial round in 2018 with 420,000 applications since July 2019. Additional request are being made by industry groups for 2020 MFP payments and will probably be justified by lower imports by China than previously announced by the White House.