Good Morning from Allendale, Inc. with the early morning commentary for August 20, 2019.
Grain markets rebounded in the overnight session recouping some of the losses from the previous session as the crop tour forecasted below-average yields for both corn and soybeans. The weekly crop progress report also showed lower than expected good-to-excellent ratings as well. Traders will continue to focus on the results of the Pro Framer crop tour over the next few days, especially some of the largest producing states of Iowa, Illinois and Indiana.
Allendale’s Annual Acreage Survey has started, and we are looking for your help again this year to make it as successful (and accurate) as possible. On average over the last 10 years, with your help, we have been within 3.9% of the final yield number each year. 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 was surprisingly bullish with corn condition ratings at 56% GTE (58% GTE expected, 57% GTE last week, 69% 5-year average). Soybean condition rating at 53% GTE (54% GTE expected, 54% GTE last week, 66% 5-year average).
Pro Farmers Crop Tour began yesterday with the Eastern part of the tour starting in Ohio where they found well below average corn yield potential at 154.35 bpa (179.57 last year, 164.38 three-year average) and soybean pod count at 764.01 pods (1,248.20 last year, 1,136.75 three-year average). The Western tour started in South Dakota where they also found well-below average corn yield potential at 154.08 bpa (178.01 last year) and low pod counts at 832.85 pods (1,024.72 last year, 964.96 three-year average). The tour still has two days remaining and most traders will be focused on yield outlooks/pod counts in Iowa, Illinois and Indiana.
The U.S. will extend a reprieve that permits China's Huawei Technologies to buy components from U.S. companies to supply existing customers, the Commerce Department said, but it also moved to add over 40 of Huawei's units to its economic blacklist.
Romanian wheat from this year's harvest has been "effectively barred" from Algeria's import tenders due to a strict, 0.1% limit on bug damage, a trading house in southern Romania said. "That's a really crazy bug content threshold. No Romanian wheat can meet this requirement as the last period was marred by drought here, helping bug levels to pick up," the head of a large trading house told Reuters.
Morocco's state grains agency ONICL announced a tender to buy 576,000 tonnes of milling wheat and 345,455 tonnes of durum wheat from the United States under a preferential-tariff quota. The tender called for the wheat to arrive in Morocco no later than Dec. 31.
Pig breeders in China who have managed to keep African swine fever off their farms are now set to reap rewards, with some in line for record profits of $200 per hog thanks to soaring prices. This has driven average hog profit margins over 1,000 yuan per head, just below the previous record of 1,135 yuan, according to JCI.
Dressed beef values were higher with choice up 0.44 and select up 1.26. The CME feeder index is 136.33. Pork cut-out values were down 1.28.