Aug. 1 Wake Up Call

Chip Flory

Every Monday morning, Pro Farmer editors record the "Monday Morning Wake Up Call." It's a recorded message available by clicking here.
 

But... if you'd rather read the report instead of listening, each Monday morning I'll update the copy from the call here to help set your agenda of key issues that will be impacting the grain and livestock markets in the week ahead.

Monday Morning Wake Up Call

Good morning ... this is your August 1st edition of the Pro Farmer Monday Morning Wake Up Call.

As expected, the Senate finally reached agreement on a deal to raise the debt ceiling and will pass the package today. That will send the package to the House where it will be passed as soon as tonight. The deal will raise the U.S. debt ceiling by $400 billion now, with another $500 billion increase later this year. Spending cuts total $917 billion. The agreement also creates a “super committee” that is responsible for identifying another $1.2 to $1.5 trillion in spending cuts. If this committee can’t reach a deal, an across-the-board cut of $1.2 trillion will kick in (with half coming from defense and half coming from domestic programs). The plan also has no new taxes and there will be a vote on a constitutional amendment to balance the budget.

Last week was one of the worst weeks of the year for the stock market, but equity futures are indicating a sharply higher open this morning. That will help spread a generally positive tone across all the markets as traders start to establish “risk-on” positions. Grain futures participated in the relief rally overnight with corn mostly 7 to 9 cents higher; soybeans mostly 14 to 15 cents higher and wheat mostly 12 to 15 cents higher. Those are also your opening calls for the grain markets.

Traders are looking for a slight downtick in corn and soybean condition ratings in USDA’s weekly update this afternoon. Most of the deterioration is expected in Southern and Eastern Corn Belt locations while Western and Northern locations should feature at least steady conditions.

The National Weather Service 6- to 10-day forecast for August 6 thru 10 is fairly non-threatening for the Corn Belt. The greatest concern is the risk of continued hot temps over the Southern portions of the Corn Belt. Ahead of that period, a mini heat wave is expected over the next 48 hours with cooler temps moving into the Corn Belt by mid-week. Private weather forecasters are also warning the next 10 days features several opportunities for thundershowers and a generally wet period over the Northern Plains and Midwest.

That’s your Pro Farmer Monday Morning Wake Up Call.