Davis Michaelsen here with your morning update for Monday July 13. From Pro Farmer’s First Thing Today, these are some of the stories we are watching this morning:
Corn and soybean futures are down 7 to 8 cents in most contracts to start the week after a gap-lower start overnight. SRW wheat futures are trading well off session lows with 1 to 3-cent losses. HRW wheat futures are around a penny lower and mixed and spring wheat futures are holding near unchanged. The U.S. dollar index is slightly lower, with crude oil futures also under pressure. As earnings season kicks off, U.S. stock indices are pointed toward higher openings.
Weekend rainfall was erratic. One band of showers brought less than an of rain from Minnesota to northeast Iowa and northern Illinois, southern Indiana and parts of Kentucky, with the latter two states seeing some 1 inch to 2-inch totals. Another band brought an inch or two of rain from south-central South Dakota into central and interior eastern Nebraska, according to World Weather Inc. The southwest experienced near record heat over the weekend.
China received more excessive rainfall during the weekend. The bulk of the country is expected to receive more rain over the next two weeks, with heavy rains expected to bring more flooding to the Yangtze River Basin. Besides crop concerns, there were reports last week that flooding was causing African swine fever to spread more rapidly.
While Florida reported a record 15,299 new coronavirus cases on Sunday and Houston city leaders called for a return to lockdown, a declining death rate trend was highlighted by New York City, which reported no Covid-related fatalities for the first time. On Sunday, the World Health Organization announced another record number of cases recorded in one day, with more than 230,000 cases reported globally.
Many observers are downplaying comments by President Donald Trump on Friday that prospects for a Phase 2 agreement were not very positive. But prior to those comments, U.S. Trade Representative Bob Lighthizer made clear in an interview with AgriTalk that Phase 2 will depend on how China lives up to the terms of the Phase 1.
Beijing followed through on its promised retaliation for Washington’s move to hold individuals to account. Chinese foreign ministry spokeswoman Hua Chunying said the U.S. Ambassador at Large for International Religious Freedom Samuel Brownback, U.S. Senators Rubio and Cruz, U.S. Rep. Chris Smith (R-N.J.) as well as the Congressional-Executive Commission on China would be sanctioned.
The State Department warned U.S. citizens living in or traveling to China they may face arbitrary arrest, the latest sign of deteriorating relations between Washington and Beijing. “Exercise increased caution in the People’s Republic of China (PRC) due to arbitrary enforcement of local laws for purposes other than maintaining law and order,” The Department said in a travel advisory on its website that was also emailed to U.S. citizens registered as being in China.
Live and feeder cattle futures moved sideways over the past week, with signs of cash market stabilization countered by concerns another wave of Covid-19 could temper any recovery in beef demand. Lean hog futures gave some indication a low may have been posted, with futures filling chart gaps left after the latest Hogs & Pigs Report. But the premium those contracts hold to the cash market should limit followthrough buying interest, barring an unexpected rally in cash prices.
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