Good Morning from Allendale, Inc. with the early morning commentary for August 23, 2019.
Grain markets are mixed overnight after taking a breather yesterday with light trading volume and little fund activity. Markets have been supported as temps in the Midwest are forecast to be cooler than normal into September, this is creating concern of potential drag on production at a time when late-planted corn and soybean crops need more warmth and sunshine.
President Trump, faced with mounting anger in the farm belt over policies that allow oil refineries to use less corn-based ethanol, summoned Cabinet members to discuss ways to boost biofuel demand, four sources familiar with the matter said. President Trump met with Ag Secretary Sonny Perdue and EPA Administrator Andrew Wheeler at the White House yesterday, the sources said. One proposal discussed and advocated by the USDA was rescinding seven or eight of the 31 waivers the administration has granted to refineries, according to Reuters. Sources said government agencies have agreed on four of the proposals, but President Trump was yet to make a final decision.
Weekly export sales showed corn sales of 420,900 tonnes (estimated 250,000 to 1,000,000 tonnes), soybean sales of 818,500 tonnes (estimated 150,000 to 800,000 tonnes), wheat of 599,500 tonnes (estimated 300,000 to 500,000 tonnes), soymeal sales of 132,000 tonnes (estimated 100,000 to 350,000 tonnes), and soyoil of 2,200 tonnes (estimated 5,000 to 25,000 tonnes).
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Pro Farmer estimated Iowa corn yields at 173.00 bushels per acre, a sizable drop from the 193.55 bpa last year and three-year average of 185.23. Iowa soybean pods were calculated at 914.04 pods (1,175.19 pods last year, 1,116.17 three-year average). “No question, the crop has been getting better. It looks like it’s going to be at least an average or near average crop for Iowa,” said Dick Overby, 85, a retired farmer and a crop insurance agent, who is a scout on the tour.
China purchased a small volume of U.S. soybeans last week after pledging to halt all purchases of American farm products due to the escalating trade war. China bought 9,589 tonnes of U.S. soybeans for delivery in the current marketing year and 66,000 tonnes (about one cargo) for next year, USDA data showed.
U.S. officials have repeatedly said they expect China to buy large quantities of soybeans as a goodwill gesture while the two sides negotiate a trade deal. USDA Trade Undersecretary Ted McKinney told Reuters that China was a long way from doing that. "Very publicly in the Oval Office, they made commitments for 20 million metric tons of purchases, and only about 9 or 10 million tonnes have been shipped and accepted,” McKinney said.
Cattle on Feed will be released today at 2:00 PM CDT. Analysts are expecting to see On Feed (as of August 1st) at 100.8% of last year, Placements at 100.1%, and Marketings at 106.4%.
Cold Storage report showed 601.790 million lbs. of pork at the end of July (Allendale estimated 633.631 million lbs.). This is an 18 million lb. decline from the previous month. Beef cold storage at the end of July came in at a surprising 455.102 million lbs. (Allendale estimated 397.410 million lbs.). This is a 49 million lb. increase in stocks over the end of June count.
Dressed beef values were mixed with choice down 2.46 and select up .21. The CME feeder index is 137.89. Pork cut-out values were down 1.30.