Tours Condition and Trade Talks
Aug 21, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for August 21, 2018.
Grain markets continue the back and forth on the US/China trade dispute headlines as a Chinese delegation heads for the US to restart talks. Crop conditions and tour headlines are adding to the mix.
Allendale’s Annual Yield Survey is going on now through August 31. Participate in the survey by clicking here. You know your field better than anyone! We will be releasing the survey results during a live webinar (Register Here) on September 5. You can also share the results of your farm by calling us at 800-262-7538.
Crop conditions out yesterday at 3:00 PM had corn rated 68% good to excellent, a drop of 2% from last week. Analysts were expecting 69% GTE. Soybeans were rated 65% GTE, traders were expecting even with last week at 66%.
Spring Wheat was rated 74% GTE, inline with the average trade guess and a drop of 1% from last week. Spring wheat harvest was 60% complete, a big jump from last week's 35%, and well above the 51% estimate. Winter wheat harvest is now complete.
ProFarmer's annual crop tour continues for the second day today. Early headlines founds above average yields in South Dakota and parts of Ohio. We expect more headlines out today as the scouts continue. Their official yield estimates will be out Friday at 1:30 PM.
Export Inspections for the week ending August 16th mostly missed expectations, or were near the lower end. Corn exports were reported at 1,096,647 tonnes, soybeans 639,001, and wheat 345,375.
Chinese companies are confident in securing overseas supplies of soybeans and soybean meal substitutes to counter the fall in imports of U.S. soybeans, according to industry insiders. A survey of related firms points to widespread readiness and proactiveness in the industry as Chinese firms turn to more competitive suppliers from South America and other parts of the world. (Reuters)
Russian exporters may step up grain shipments in the next few months in anticipation that the government could put curbs on exports sometime after December, traders said. Russia's 2018 wheat crop is forecast by the U.S. Department of Agriculture to fall to 68 million tonnes from a record 85 million tonnes in 2017. (Reuters)
Managed money funds were estimated sellers of 5,500 corn contracts, 8,500 wheat, and 1,000 soymeal in yesterday's trade. They were thought to be buyers of 2,500 soyoil, and neutral in soybeans.
The United States and China are set to restart talks on trade agreements tomorrow into Thursday. The talks are not expected to yield any concrete results (President Trump said as much in an interview yesterday), but should pave the way for larger discussions in November.
On the trade front, it's great to see China and the US talking again as they take 9% of our pork exports. The real deal, however, is Mexico and the NAFTA renegotiations as they are responsible for 32% of our pork exports.
Cattle showlist numbers were 20,600 head lower than last week. Traders were a bit surprised to see the numbers this much lower.
Cattle on Feed will be released by USDA this Friday at 2:00 PM CDT. Average analyst estimates should be released by the newswires later today.
Dressed beef values were higher with choice up 2.60 and select up 1.37. The CME Feeder Index is 149.66. Pork cutout value is up .41.