COMMODITY REPORT

02/19/2021

WEEKLY COMMODITY REPORT: FEBRUARY 19th 2021.

 

  • The financial and economic policies of the Biden-Harris Administration are emerging with a focus on the vaccination campaign to reduce the impact of the COVID-19 pandemic in order to restore the economy. The commodity market this past week was little changed continuing the trend last week and following the sharp upturn two weeks ago despite export orders and lower ending stocks as forecast in the February 9th WASDE Report and subsequent planting intentions.

 

  • The direction of agricultural and trade policy to be implemented in 2021 will emerge with the confirmation of Tom Vilsack as USDA Secretary, Michael Regan as the Administrator of the EPA and Katharine Tai as U.S. Trade Representative, together with other Cabinet appointments and their subordinates relevant to agriculture.

 

  • S producers are now receiving and conversely livestock producers in the Midwest are paying close to $5.50 per bushel for corn and $13.80 per bushel for soybeans plus transport and basis.

 

  • Corn and soybeans were respectively 0.7 percent and 0.4 percent higher than the previous week although still at notably high levels. Soybean meal lost 0.5 percent.

 

 

  • According to the USDA FAS Export Report for the week ending February 11th 2021 reflecting market year 2020-2021, cumulative placed export orders for corn amounted to 35.58 million metric tons (1,402 million bushels) with 22.97 million metric tons (905 million bushels) actually shipped. During the past week 1.00 million metric tons (39 million bushels) of corn were ordered by China and other nations, sharply down from the previous week, with 1.38 million tons (54 million bushels) shipped.

 

  • Cumulative export orders for soybeans for the 2020-2021 market year attained 9.18 million metric tons (336 million bushels) with 50.68 million metric tons (1,860 million bushels) actually shipped. This past week some previously placed orders from China were cancelled. Weekly sales of soybeans attained 0.46 million metric tons (16.7 million bushels) with 1.00 million metric tons (36.7 million bushels) shipped metric tons shipped.

 

 

The following quotations for delivery in the months as indicated were posted by the CME at 15H00 on February 19th 2021 compared with values posted at 14H00 on February 12th 2021  (in parentheses) reflecting specified months in 2021 for delivery.

 

COMMODITY

 

Corn (cents per bushel)

 March 543     (539)      

May    542       (547)

Soybeans (cents per bushel)

 March 1,377  (1,371)

May  1,380      (1,370)

Soybean meal ($ per ton)

 March  424     (426)

May     424       (426)

 

 

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

 

COMMODITY    CHANGE FROM PAST WEEK

Corn:                  March quotation up 4 cents per bushel         (+0.7 percent)

Soybeans:         March quotation up 6 cents per bushel         (+0.4 percent )

Soybean Meal: March quotation down $2 per ton                  (-0.5 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

 

This week the small changes in the prices of corn and soybean meal would increase nest-run production cost for eggs by 0.3 cent per dozen and for broilers 0.1 cent per live pound. Over the past eight weeks escalations in the price of major ingredients have added 7.8 cents per dozen and 4.4 cents per live-weight lb.

 

According to the February 9th WASDE, corn harvested in calendar 2021 will attain 14,183 million bushels with ending stocks projected at 1,502 million bushels, down 3.2 percent from the January Report. Values will be updated reflecting ongoing export volumes, domestic use and the March WASDE, incorporating recent planting intentions. Compared with February 12th at 14H00, the CME quotation at 14H00 for corn on February 19th was up 4 cents per bushel for March delivery to 543 cents.

 

The social restrictions imposed in the U.S. as a result of COVID-19 will reduce ethanol demand by 1.5 billion gallons or 10 percent of projected 2020-2021 requirement accepting a nominal ten percent addition to gasoline. A significant proportion of the U.S. ethanol fermentation capacity is off-line or operating at lower than capacity at present and the outlook for increased demand is questionable with ten percent exported. According to the U.S. Energy Information Agency the industry produced on average 911,080 barrels per day for the week ending February 11th 2021. Ethanol stocks stood at 24.3 million barrels on February 12th 2021 up 2.1 percent from the previous week. Ethanol was priced at $1.69 per gallon on February 19th unchanged from February 12th and compared with a five-year low of $0.92 per gallon on March 26th 2020. Concurrently RBOB gasoline at $1.81 per gallon (quoted, New York Harbor) was up 16 cents per gallon from the previous week (presumably  due to weather conditions) and is now 12 cents per gallon higher than ethanol but with a 63 percent higher BTU rating.  

 

With more plants among the 201 on January 1st 2021, DDGS is freely available commanded a higher price than in the fourth quarter of 2020. Eastern Corn-belt product was priced at $242 per ton on February 16th 2021, $1 per ton lower than the previous week and $86 per ton more expensive than on February 11th 2020.

 

 Soybeans are the beneficiary of demand by China. The CME price at 14H00 on February 19th rose 6 cents per bushel over the week to 1,377 cents per bushel for current month delivery. The USDA documented a 2021 crop of 4,135 million bushels. Ending stocks according to the February 9th 2021 WASDE projection will attain 120 million bushels, down from the January 2021 projection of 140 million bushels representing a seven-year low.

 

On February 10th 2021 Meat and Bone meal quoted Central U.S. attained $400 per ton, up $10 from the previous week and compared to $170 per ton on February 11th 2020.

 

On February 16th the BRL exchange with the CNY was 0.84, (up CNY 0.01 from the previous week). The conversion of the US$ to the CNY was set at 6.49, up CNY 0.03 from the previous week.

 

For consecutive calendar years 2017 through 2019 the U.S. supplied 34.4 percent of soybean requirements for China amounting to 95.5 million metric tons. This was followed by a decline to 16.9 percent of 88.5 million metric tons in 2018 and 16.6 percent of 88.0 million metric tons in 2019. The USDA anticipates that soybean imports by China will amount to 95 million metric tons during the 2020-2021 market year.

 

For the 2019/2020 market year China imported 2.1 million metric tons of corn from the U.S., 4.8 percent of total exports of 43.3 million tons, but 12 percent less than in the 2018/2019 market year. The U.S. Grains Council documented sales of U.S. corn to China through December 31st 2020 during the 2020/2021 year amounting to 11.7 million metric tons (460 million bushels) with 65 percent yet to be shipped.

 

For the 2019/2020 market year China imported 16.3 million metric tons of soybeans from the U.S., 36.2 percent of total exports of 44.9 million metric tons, but 3.9 percent less than in the 2018/2019 market year.

 

COMMENTS

Subscribers are referred to the February 9th 2021th WASDE #609 under the STATISTICS TAB.

 

Approximately $16 billion was disbursed under the Coronavirus Food Assistance Program (CFAP) in early 2020. An additional $14 Billion relief package was announced by the Administration on September 18th with all of the allotment having been distributed. Additional funds will be included in the proposed Coronavirus Relief Package.










































































































































































































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