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Weather Concerns Become Focus


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Good Morningfrom Allendale, Inc. with the early morning commentary for June 3, 2020.

Grain Marketswere mixed with corn and soybean futures slightly higher on Midwest weather concerns and lower than expected planting progress. Wheat slid lower on concerns of higher global demand. Trade will stay focused on weather over the next few weeks as above normal heat and heavy rains hit most of the growing areas.

The U.S.is investigating digital services taxes being adopted or considered by Britain, Italy, Brazil and other countries, the U.S. Trade Representative's office said, a move that could lead to new punitive tariffs and heighten trade tensions. "President Trump is concerned that many of our trading partners are adopting tax schemes designed to unfairly target our companies," U.S. Trade Representative Robert Lighthizer said.

Midwest stateswill see warmer temperatures with light precipitation over the next two weeks. A drier bias across much of the corn belt will be monitored closely. Rain will be needed in some areas and yield estimates could quickly start coming into conversations.

The Trump administrationbelieves ahead of an expected OPEC+ meeting this week that major oil producers such as Saudi Arabia and Russia will honor their pledges to cut crude production and will not damage the global economy by changing course, a senior official said. "We trust that other major oil producers will not revert to policies that impede an orderly and swift recovery from these unprecedented global economic conditions," a senior administration official added.

Chicago wheat futuresremoved more weather premium this week (7.25 cents lower yesterday). Although winter wheat conditions were lower than expected domestically, it wasnt enough to offset the improving wheat crops across the globe.

Ukrainian ProAgro ag consultancyraised its 2020 grain harvest forecast to 74.43 million tonnes (72.52 million tonnes last report) due to better weather. The consultancy also raised its estimates for Ukrainian wheat harvest to 26.65 million tonnes (25.36 million tonnes last report), and corn estimates to 37.58 million tonnes (37.3 million tonnes last month).

JBSis being suedfor alleged violation of indigenous workers' rights afterfiring 40members of the Kaingang tribe from a plant in southern Brazil, according to a court document. "They were dismissed in a critical period, when the return to the labor market is unlikely until the pandemic is controlled,"LaborProsecutorEdson Rodrigues Juniorsaid.

CME Lean Hog Indexpeaked on May 13th at $68.87. Todays quote will fall to $59.23, the lowest since April 30th. USDA slaughter estimates were pegged at 417,000 head and within estimates. Tysons Storm Lake meat plant will likely be running today.

Wholesale beefpricesare falling sharply with more declines expected. Through yesterday morning, choice is down 40.98 so far this week. It has fallen 153.03 (to 322.36) since the peak price set on May 12that 475.39.

Dressed beef valueswere sharply lower again with choice down 22.42 and select down 26.25. The Feeder cattle index is 128.25. Pork cut-out values were down 6.67.



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Allendale Inc. was established in 1984 in a country grain elevator located in Crystal Lake, Illinois. The first-hand experience with agricultural and financial markets has worked with Allendale’s combined foresight, ingenuity and expertise to make it the successful firm that it is today. Allendale’s goal is to provide its customers the expertise and service they need to grow their agricultural businesses. Allendale’s staff is called on to provide their commentary for TV, radio and newswires on a daily basis.

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