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Email Content: Poultry Industry News, Comments and more by Simon M. Shane



Price of corn down 5.2 percent at close of CME trading following release of the August WASDE. Soybeans up 1.4 percent.

Corn responded to the mid-session release of the August WASDE on Monday 12 th with a 5.2 downward turn by close of trading. The WASDE documented higher yield and an 8.6 percent increase in ending stocks of corn. Soybeans gained 1.4 percent on 5.0 percent lower ending stocks. The market was indifferent to the August 8th announcement concerning imposition of a 10 percent tariff on the remaining $300 billion in annual imports from China not subject to previous tariffs.

The absence of any substantial news regarding the latest round of talks in Shanghai and a resumption scheduled only for September in Washington suggests intractability by both the U.S. and China. Current consensus is that there will be no resolution of the trade dispute before the end of 2019. In the interim China has retaliated by banning all imports of agricultural products from the U.S.

The continuous stream of conflicting statements by White House spokespersons over the months since the dispute began is disconcerting to the commodities market and has contributed to price fluctuation.

The following quotations were posted by the CME at close of trading on Monday 12th August compared with values for Thursday 8 th August (in parentheses).



Corn (cents per bushel)

Sept. 385 (406)

Dec. 393 (415)

Soybeans (cents per bushel)

Aug. 862 (850)

Sept. 866 (854)

Soybean meal ($ per ton)

Aug. 293 (293)

Sept. 293 (296)

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


Corn: Sept. quotation down 21 cents per Bu     (-5.2 percent)

Soybeans: Aug. quotation up 12 cents per Bu   (+1.4 percent)

Soybean Meal: Aug. quotation unchanged.        ( - )

  • 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:-


Subscribers are referred to the weekly USDA Crop Progress Report and the August 12th WASDE posted in this edition.

In June some concessions were promised by China to reduce coercive trade practices and clarify dispute resolution. Subsequently U.S. negotiators claim that China has backtracked on structural issues hence the threat of more stringent tariffs and embargos on trade with tech. companies in China.

Prices will be determined by the trend in levels of ending stocks as influenced by the 2019 harvest, exports and domestic use.

For comparison the values below are commodity prices posted by the Dalian Mercantile Exchange in $US per short ton* at market open on August 13 th 2019 (local time) with comparable August 12th closing CME values in parentheses:-

Corn $244 ($140)

Soybeans $410 ($287)

Soybean meal $365 ($293)

*(conversion Rmb7.14=$US1 prevailing August 12th)

The August 12th 2019 WASDE Report #591, projected that 82.0 million acres of corn would be harvested in 2019 to produce 13.90 Billion bushels. The WASDE projected a harvest of 3.68 Billion bushels of soybeans from 75.9 million acres. The levels of production and ending stocks for the two commodities are based on completion of planting in June, projections of harvest area and yield. The WASDE to be published in mid-September will confirm the projected yields and ending stocks of corn and soybeans respectively.

Unless shipments of corn and especially soybeans to China resume in volume, which is highly unlikely, the financial future for row-crop farmers in 2019 appears bleak despite the release of two tranches of support funding in 2018 amounting to $8 billion as "short-term" compensation for disruption in trade. On July 25th the USDA announced a $16 million package to support agriculture with Market Facilitation funds to be distributed in three tranches. The first will take place in August through the Farm Services Agency under authority of the Commodity Credit Corporation. Payments will be based on the higher of 50 percent of the Producer's calculated payment or $15 per acre provided a cover crop is planted.

The magnitude of the second (November 2019) and third (January 2020) payments will be decided on according to prevailing conditions. Regulations framed in terms of the Additional Supplementation Appropriations for Disaster Relief Act of 2019 enacted in June will determine eligibility.

Copyright 2019 Simon M. Shane