Good Morning from Allendale, Inc. with the early morning commentary for August 19, 2019.
Grain markets opened lower in the overnight session on concerns of large supply numbers and favorable weather over the weekend. This comes after strong gains in Friday’s trading session. Traders will be paying attention to various crop tours and survey's, including Allendale's, beginning this week searching for clearer answers on what we can expect in the fields this year.
Last week, September corn futures were down 39.25 cents, September soybeans up 0.75 cents and September wheat down 28.50 cents. September soyoil futures up 17 points and soymeal down $1.80.
USDA weekly crop progress report will be released today at 3 p.m. CST. Trade is looking for corn condition rating at 58% GTE (57% GTE last week, 69% 5-year average). Soybean condition rating at 55% GTE (54% GTE last week, 66% 5-year average).
CFTC Commitments of Traders showed funds new net position long +44,513 corn contracts, short -66,450 soybean contracts, long +4,088 wheat contracts, long +18,830 live cattle contracts and long +34,050 lean hog contracts.
Pro Farmers Crop Tour will begin today and finish on Wednesday. The Eastern tour will start in Ohio, while the Western tour will start in South Dakota. This year’s tour will measure more potential, than actual yield. Even with the immature crops, the tour will use the same methodology it uses in every field, every year. With 1,400 samples of corn and 1,400 samples of soybeans by the end of this week, the tour will have a good idea of the crop’s potential, even though some of the tour leaders knows it won’t be easy.
President Trump and top White House officials dismissed concerns that economic growth may be faltering, saying they saw little risk of recession despite a volatile week on global bond markets, and insisting the trade war with China was doing no damage to the U.S.
China’s top soybean buyer said they can do without soybean supplies from the U.S. in the fourth quarter and can rely on imports from South America instead, said a government-backed Chinese analyst. “Even if China and the U.S. fail to reach an agreement on trade in coming weeks, "we will have enough soybean supplies as we can buy from South America", they said.
President Trump was less optimistic than his aides on striking a trade deal with China, saying that while he believed China was ready to come to an agreement, "I'm not ready to make a deal yet. I would like to see Hong Kong worked out in a very humanitarian fashion," Trump said. "I think it would be very good for the trade deal."
Funds were buyers of 12,000 corn contracts, 4,500 soybeans, 2,500 wheat, 2,750 soymeal, and sellers of 2,000 soyoil contracts.
China’s pig herd was seen down 32% in July (26% down last month) with analysts warning that additional declines are likely. There is still no sign meal demand from the hogs sector is recovering.
Dressed beef values were higher with choice up 2.57 and select up 2.59. The CME feeder index is 137.60. Pork cut-out values were down 1.97.