Trade Talks Crop Tour Repeat
Aug 22, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for August 22, 2018.
Grain markets are experiencing light trading volume causing sharp price movement. Trade is expecting above average yields from the crop tour. Trade talks continue to catch trader’s interest then it’s back to crop tour results on social media.
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.
Pro Farmer Midwest Crop Tour is finding good crops in the state they have covered so far. Their NE yield is estimated at 179.2 bpa versus 165.4 last year and 163.1 the 3-year average. Their overall crop yield and production estimates will be released on Friday after the close.
China’s lower level officials are in the US talking about a resolution to the trade war as a new set of 25% tariffs are due to kick-in. Trade is skeptical that the talks can halt the tariff deadline.
Brazilian farmers are forecast to expand the 2018/2019 soybean planted area to a record 36.28 million hectares, despite freight cost and exchange rate uncertainty. Analysts are projecting an increase in production to 119.65 mmt in 2018/19.
Funds were estimated to have been net sellers of 9,000 corn contracts, 3,000 soybeans and 8,000 wheat contracts on Tuesday.
Conab, Brazil’s agricultural statistics agency raised its projections for cane crush for both the country and for the center-south region, a surprising move while most analysts are cutting their views due to drier-than-normal weather this year. They raised cane crush to 635 mmt from their May estimate of 625 mmt.
Cattle on Feed report is due to be released on Friday at 2:00 pm CDT. Trade estimates are: On Feed 104.5%, Placed during July 106.3% and Marketed during July 104.7%, with one extra marketing day in July.
Cash cattle trade has not established pricing yet this week. Auction barns are reporting a weak steady with last week. Fed cattle Exchange is offering 359 head for today’s auction, however, trade would be surprised if any cattle sold. The past few weeks all cattle were no sales but feedlots used the auction as a way of checking the packer’s bids.
Packer profit margins are well in the black and providing the incentive to maintain a high production rate. Margins may drop after Labor Day as the barbeques season comes to its official end.
October live cattle futures consolidated above the 20-day moving average as traders wait for cash news ahead of Friday’s COF report.
US hog industry is watching closely the outbreak of African swine fever in the Chinese hog herd. Currently there have only been a few head in China effected by the fever, however, a small impact on Chinese pork production could have a dramatic impact on the world’s pork industry.
October lean hog futures test chart gap and 50-day moving average on Tuesday. Support crosses below 55.67 with resistance at 59.50.
Dressed beef values were mixed with choice down .41 and select up 1.79. The CME Feeder Index is 149.43. Pork cutout value is down .99.