Trade Negotiations Progress as Deadlines Quickly Approach
Good Morning from Allendale, Inc. with the early morning commentary for December 10, 2019.

Grain markets pushed higher lead by soybean futures once again. Soybean futures gained for a sixth session as Chinese purchases boosted hopes of a Phase One trade deal soon. Funds also were buyers as they lightened up on short positions before this mornings monthly WASDE report.

USDA weekly crop progress report showed corn harvest rating at 92% complete (94% expected, 89% complete last week, 99% 5-year average).

Senior U.S. and Canadian officials were set to fly to Mexico City today to work on the final changes to a North American trade pact with Canada and Mexico that could clear the way for a vote in the U.S. Congress before the end of the year. U.S. Trade Representative Robert Lighthizer and White House senior adviser Jared Kushner are due to fly to Mexico City for meetings to try to pin down final details, an administration official told Reuters. Mexican President Andres Manuel Lopez Obrador said yesterday Mexican senators had endorsed changes to USMCA that had been accepted by Mexico. He urged Pelosi to move forward with a vote on the trade deal.

Chinese soybean importers bought at least five bulk cargo shipments of U.S. soybeans (about 300,000 tonnes) for shipment in January and February of 2020. This is just after the Chinese government offered buyers at least 1 million tonnes in new tariff waivers, U.S. exporters said. China said it hoped to make a trade deal with the United States as soon as possible, before the new tariffs kick in.

President Trump does not want to implement the next round of scheduled tariffs against Chinese goods on Dec. 15, but he wants "movement" from China to avoid them, U.S. Ag. Secretary, Sonny Perdue said. "And hopefully the signal they sent over soy and pork reductions might be that signal," he added.

USDA December Supply and Demand report will be released this morning at 11 a.m. CDT. The average analysts guess for corn ending stocks is 1.919 billion bushels. Soybean ending stocks are seen at 476 million bushels, and wheat is seen at 1.010 billion bushels.

China raised its soybean output forecast for this coming year from last months estimates, after farmers planted larger-than-expected acres, the Ministry of Ag and Rural Affairs said. Soybean output is estimated to reach 18.1 million tonnes (17.2 million tonnes last month, 17.23 million tonnes last year).

INTL FCStone projected this year's Australian wheat production to come in 5.6% lower than official estimates, as a devastating drought is showing no signs of easing. They forecast Australian wheat production at 14.97 million tonnes (below Australia's last official estimate of 15.85 million tonnes).

Feedlots in Brazil finishing beef cows will likely grow, a survey by DSM showed. "When using feedlots to finish fattening the animal before termination, farmers do in 90 days what would take them a year in the pasture," said Marcos Baruselli, DSM manager for feedlot businesses.

Dressed beef values were lower with choice down 0.92 and select down 0.81. The CME feeder index is 143.33. Pork cut-out values were down 0.10.