USDA October Supply/Demand Report Seen As Bearish
Good Morning from Allendale, Inc. with the early morning commentary for October 11, 2019.

Grain markets are higher overnight on trade deal optimism after pulling back sharply on higher than expected corn and wheat WASDE numbers. Traders will continue to focus on snow maps, freezing temperatures and progress on U.S. China trade talks.

USDA Supply and Demand report showed corn production at 13.779 billion bu. (expecting 13.684 billion bushels) with a yield of 168.4 bpa (expecting 167.5 bpa). Soybean production was seen at 3.550 billion bu. (expecting 3.583 billion bu.) with a yield of 46.9 bpa (expecting 47.3 bpa). Total corn ending stocks seen at 1.929 billion bu. (expecting 1.784 billion bu.), soybeans .460 bb (expecting .521 bb), and wheat at 1.043 bb (expecting 1.014 bb).

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Weekly export sales showed corn sales of 285,000 tonnes (expecting 500,000 to 800,000 tonnes), soybean sales of 2,092,000 tonnes (expecting 1,300,000 to 1,800,000), wheat sales of 522,000 tonnes (expecting 300,000 to 600,000), soymeal of 350,000 (expecting 100,000 to 400,000), and soyoil of 2,000 tonnes (expecting 5,000 to 35,000 tonnes).

President Trump said he will meet with Chinese Vice Premier Liu He at the White House today, the second of two-days of high-level U.S. China trade talks aimed at averting scheduled increases in U.S. tariffs on Chinese goods. "Big day of negotiations with China. They want to make a deal, but do I?" Trump tweeted.

Top U.S. and Chinese negotiators are working towards an "early harvest" of confidence-building agreements that could forestall further U.S. tariffs, including an agreement to avoid currency manipulation, a senior U.S. Chamber of Commerce official said.

Private exporters reported to the USDA export sales of 398,000 metric tons of soybeans for delivery to China during the 2019-20 marketing year.

Argentina's wheat harvest is expected at 19.8 million tonnes, the Buenos Aires Grains Exchange said in its weekly crop report, citing bad weather as the reason for cutting its previous 21 million-tonne forecast.

U.S. beef export sales showed a net cancellation of previous orders yesterday. With Hong Kong cancelling 36,000 metric tonnes bringing the total net cancellations to 29,079 tonnes. Year-to-date beef export sales is 754,842 tonnes (4.1% under last year). Pork export sales were at 31,324 tonnes, with 18,810 tonnes to China. This was 87% over last year in the same week with year-to-date sales at 1,216,355 tonnes (17% over last year).

Dressed beef values were higher with choice up 1.03 and select up .54. The CME feeder index is 144.65. Pork cut-out values were up 0.90.