Share via Email

* Email To: (Separate multiple addresses with a semicolon)
* Your Name:
* Email From: (Your IP Address is
* Email Subject: (personalize your subject)

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



Corn and soybean trading was inert this past week attributed to:-


  • Declining optimism over the as yet non-documented outcome of the October 10/11th Ministerial-level trade negotiations between the U.S. and China.
  • Prospects of exports of soybeans to China are dampened by the absence of specific details on quantities and prices or an expressed commitment from state-controlled brokers in China.


Uncertainties still exist:-


  • Traders are waiting to see the rate of harvesting of both corn and soybeans and the effect of two bouts of severe weather in the upper Midwest.
  • Quality and yield of 2019 corn and soybeans planted late this season
  • Brexit and the U.S. relationship with the U.K and the E.U.
  • Unpredictable political situation delaying ratification of the USMCA .


Compared with close of trading on October 25th, on November 1st the quotation for December corn was unchanged. The November soybean quotation, vulnerable to trade conflicts with China was up 1 cent per bushel despite orders in September amounting to 4 percent of projected 2019 exports. The October 11th negotiations apparently elicited an intention by China to import an unspecified quantity of "U.S. agricultural commodities" over a non-disclosed time period but no deliveries have been made. December soybean meal was up $1 per ton from the October 25th quotation.

The promise of successful negotiations to resolve the trade dispute with China is glowing, but very dimly, despite White House spin. There is no confirmation from China of their intentions following Ministerial-level talks on October 10th and 11th in Washington. No date or venue has been set to sign a predicted Phase 1 agreement after cancellation of the Asia-Pacific Meeting in Chile this month. Beijing has indicated that orders will be placed in accordance with the nation's needs and at prevailing prices. Current consensus is that there will not be a comprehensive resolution of the trade dispute before the 2020 U.S. election. The mid-October portion of additional tariffs announced in August was deferred before the October negotiations. No further decision on when and if the proposed second round of escalations scheduled for mid-December will occur. If the U.S. imposes additional tariffs at this time any consideration of a settlement can be abandoned.

The continuous stream of statements by the White House and to a lesser extent, the Government of China is intensifying. Spokespersons have issued conflicted verbal reports over the months since the dispute began. This is disconcerting to the commodities market and has contributed to price fluctuation. The absence of a post-negotiation written communiqué after the October negotiations was characterized by Michael Pillsbury, interviewed on CNBC on Monday October 14th as, "It is hard to say what was agreed".

The following quotations were posted by the CME at 14H00 on November 1 st compared with values for October 25th (in parentheses).



Corn (cents per bushel)

Dec. 388 (388)

March '20 397 (398)

Soybeans (cents per bushel)

Nov. 924 (923)

Jan. '20 937 (937)

Soybean meal ($ per ton)

Dec. 305 (304)

Jan. '20 307 (306)

Changes in the price of corn, soybeans and soybean meal over five trading days were:-


Corn: Dec. quotation unchanged                 ( 0 )

Soybeans: Nov. quotation up 1 cent per Bu (+0.1 percent)

Soybean Meal: Dec. quotation up $1 per ton. (+0.3 percent)

  • 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:-

The cost of egg production would change by 0.44 cent per dozen

The cost of broiler production would change by 0.25 cent per pound live weight


Subscribers are referred to the comments on the weekly USDACrop Progress Report in this edition and the October 10th WASDE #593 posted under the Statistics tab .

Prices of commodities will be determined by estimates of ending stocks as influenced by the 2019 harvest, exports and domestic use.

The corn price was influenced by the October 4th decision by the EPA to establish a level of 15 billion gallons of ethanol to be blended into the gasoline consumed in 2020. Existing restraints to sale of E15 will be lifted. Future waivers to "small" refineries will be restrained and the RIN process will be streamlined. Ethanol price trades in a narrow range reflecting declining domestic and export demand and was set at $1.41 per gallon on November 1st. ($1.34 per gallon on August 30 th; $1.47 on October 15th.)

Unless shipments of corn and especially soybeans to China resume in volume, which is unlikely in 2019, the financial future for row-crop farmers for the upcoming harvest appears bleak despite the release of two tranches of support funding in 2018 amounting to $12 billion as "short-term" compensation for disruption in trade.

On July 25th the USDA announced an additional $16 million package to support agriculture with Market Facilitation funds to be distributed in three tranches. The first payment of $2.5 billion was made with the remainder for the third quarter disbursed through the Farm Services Agency under authority of the Commodity Credit Corporation. A total of $5.4 billion was distributed in September Payments will be based on a value corresponding to 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 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. One million applications were received for the initial round in 2018 with 420,000 applications since July 2019 to date.

Copyright 2019 Simon M. Shane