Markets Wait for Trade Improvements
Good Morning from Allendale, Inc. with the early morning commentary for December 6, 2018.

Grain Markets are mixed, yet steady with low volume and moderate fund activity. In observance of the funeral of President H.W. Bush, all financial markets were closed yesterday, while commodity futures remained open. The closures in outside markets could cause a slight shift in money today, but the real question remains that of the US/Chinese trade deal.

USDA Supply and Demand Report will be released December 11that 11:00 AM CST. Analysts expect US wheat ending stocks of .956 billion bushels, 1.738 bb of corn, and .945 bb soybeans. World numbers are expected to show 266.79 million tonnes of wheat, 307.59 mt corn, and 112.79 mt soybeans.

China has agreed to increase its imports of Argentine soyoil after Argentina begins harvesting in March but talks to reaching a deal to sell soymeal livestock feed to China has hit a dead end. "The Chinese have agreed to buy 300,000 to 400,000 tonnes of soyoil from Argentina," said Santiago del Solar, chief of staff to Argentina's agriculture secretary (120,000 tonnes sent to China over the last three years).

The European Commission raised its estimate for usable soft wheat production to 129.2 million tonnes (127.4 million tonnes previously). The Commission left unchanged its estimate of soft wheat exports at 20.0 million tonnes.

Egypt's state grains buyer, the General Authority for Supply Commodities (GASC), has not issued letters of credit for 16 cargoes (945,000 tonnes) of wheat and is delaying payment to the sellers. The issue goes back to cargoes due for arrival at the end of November.

Grain Trade from Russia's ports on the Azov Sea will fall sharply as winter freezes the bulk of port operations, this will leave the Black Sea as its main shipment route and reduce the potential impact of any export slowdowns that could hit the region amid Russia-Ukraine tensions. Russia has exported more than 40% of its total grain exports from the Azov Sea in recent years, while Ukraine supplies only 3% of its grains from the Azov Sea.

Brazil has potential to expand arable agricultural land on an estimated 43 million hectares (106 million acres) in the vast central Cerrado region. Currently, U.S. farmers plant around 100 million hectares with grains, while Brazil plants around 46 million hectares. This land would be converted into arable land over the next 30 to 40 years.

African Swine Fever has been detected again in the capital Beijing as well as in the provinces of Sichuan and Shaanxi, said the agricultural ministry. A total of 158 pigs were reported killed by the highly contagious disease at farms affected in these regions. This bring the total confirmed AFS cases to 84.

Fed Cattle Exchange had two separate lots offered yesterday with both successfully sold at 117.50 and 118.00.

Dressed Beef Values were lower with choice down 0.60 and select down 0.65. The CME Feeder Index is at 146.39. Pork cutout value was up .82.