More Exports to China?
Good Morning! From Allendale, Inc. with the early morning commentary for May 21, 2018.

Grain markets find support on a positive step in the US/China trade dispute. Hopes for increased agricultural exports to China are especially supportive.

The US/Chinese trade war is, "on hold" according to Treasury Secretary Steven Mnuchin. Representative's from the two countries met over the weekend and agreed to end tariffs on each other's goods while a new trade agreement is worked on. A timetable has yet to be given, but Mnuchin said the US expects to see an increase of between 35% and 40% in Ag exports to China this year alone and a doubling of energy exports over the next several years.

Crop progress - average trade estimates will be out later this morning, but early thoughts are for corn plantings of 75 to 80% from 62% last week. Soybean plantings 50-55% from 35%, and spring wheat 72 to 77% vs 58% last week.

Safras & Mercado estimate Brazil's second corn crop at 48.76 million tonnes, a drop of 16.6% from their previous estimate, and 27.6% lower than last year. Poor weather conditions and smaller acreage were cited for the revision lower. Total 2017/18 corn is now estimated at 79.02 million tonnes. Last year's total was 107.9.

Commitments of Traders, out Friday afternoon, reported that as of Tuesday, May 15th, managed money funds were long 191,672 contracts of corn, a drop of 20,220 contracts vs. the previous week. In soybeans they were sellers of 18,981 to be net-long 108,061, and in wheat they were sellers of 9,848 contracts, and are now net-short 5,522.

Funds on Friday were estimated buyers of 18,000 corn contracts, 4,000 soybeans, and 15,000 wheat. They were estimated sellers of 2,000 soyoil and neutral in soymeal.

President Donald Trump is more interested in striking a good deal with Canada and Mexico than quickly finishing North American Free Trade Agreement talks to get a vote in Congress this year, Treasury Secretary Steven Mnuchin said Sunday. "The president is more determined to have a good deal than he's worried about any deadline," Mnuchin said in an interview on "Fox News Sunday." (Politico)

Cold Storage, due tomorrow at 2:00 PM CDT, is expected to show a 642 million lb. total pork stock level for the end of April according to Allendale's Rich Nelson. Beef stocks are estimated at 472 million lbs., a bit out of line with the five-year average.

Cattle on Feed will be released Friday at 11:00 AM CDT, a little earlier in the day than usual due to the Memorial Day holiday next Monday. Total Cattle on Feed as of April 1st are estimated at 105.4% (of last year), placements of 93.8%, and Marketings of 106.0% according to Allendale research.

Managed money funds were sellers of 6,013 contracts of Live Cattle through Tuesday the 15th and are were long 9,091 (nearing their lowest long position ever of 269 contracts). In Hogs, they were sellers of 1,239 contracts and are now short 7,858.

Dressed beef values were mixed with choice down .47 and select up .22. The CME Feeder Index is 133.66. Pork cutout value is down 1.59.

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