Good Morning from Allendale, Inc. with the early morning commentary for August 26, 2019.
Grain markets continue to be mixed as U.S. and China trade tension continue to escalate. The forecast remains wet with lower temps for the next week in most of the growing areas. Farmers across the country are starting to become very concerned with the lack of heat and sunlight the crops have been getting as they finish out this season.
Last week, September corn futures were down 11.25 cents, September soybeans down 22.5 cents and September Wheat up 4 cents. September soyoil down 61 points and September soymeal down $4.70.
Allendale’s Annual Acreage Survey is off to a great start, but we still need your help again this year to make it as successful (and accurate) as possible. Please click here to complete your survey today or please call us at 800-262-7538 to participate. The results will be emailed to all participants at the end of the survey.
USDA weekly crop progress report will be released today at 3 p.m. CST. Trade is looking for corn condition rating at 57% GTE (56% GTE last week, 70% 5-year average). Soybean condition rating at 54% GTE (53% GTE last week, 67% 5-year average).
CFTC Commitments of Traders showed funds new net position short -56,441 corn contracts, short -72,432 soybean contracts, short -1,249 wheat contracts, long +2,021 live cattle contracts and long +31,613 lean hog contracts.
President Trump announced a 5% tariff increase (to 30%) on $250 billion of Chinese imports (already being tariffed) effective October 1 along with a 5% tariff increase (to 15%) on remaining $300 billions of Chinese imports.
Pro Farmer estimated this year’s corn crop at 13.358 billion bu. (543 million bushels less than NASS). Corn yield at 163.3 BPA (169.5 BPA last year). Soybean crop shown at 3.497 billion bu (183 million bushels than USDA). Soybean yield seen at 46.1 BPA (48.6 BPA last USDA report). Historically, Pro Farmer has a strong tendency to underestimate USDA September corn production (average 5 BPA) while Pro Farmer soybean crop tends to be below September USDA numbers (10 of the last 17 years by an average of 0.6 BPA).
U.S. and Japan have agreed in principle to core elements of a trade deal that President Trump and Prime Minister Shinzo Abe said they hoped to sign in New York next month. U.S. Trade Representative Robert Lighthizer said the deal will cover agriculture, industrial tariffs and digital trade. Auto tariffs would remain unchanged at this time.
President Trump ordered a boost in biofuel in a bid to temper farmers disapproval by increasing 2020 ethanol mandate by 500 million barrels and biodiesel mandate by 250 million barrels.
Wheat export sales (YTD) of 10.4 million mt. (8.5 million mt. last year). Soybean sales of 5.3 million mt. YTD (12.6 million mt. last year) and corn export sales of 4.7 million mt. YTD (9.9 million mt. last year).
Cattle on Feed report showed On Feed (as of August 1st) at 100.2% of last year (100.8% expected), Placements at 97.9% (100.1% expected), and Marketings at 106.9 % (106.4% expected).
China imported in 182,227 tonnes of pork in July, according to the General Administration of Customs (107% July Last year). That was up from 160,467 tonnes imported in June, and close to May’s hefty 187,500 tonnes.
Dressed beef values were lower with choice down 1.76 and select down 3.20. The CME feeder index is 139.72. Pork cut-out values were down 0.29.