Good morning!
Tour data leads to light short-covering overnight... Corn futures are fractionally to a penny higher as of 6:30 a.m. CT as varied yield reports from the Farm Journal Midwest Crop Tour have lent some support. Soybeans are up 2 to 4 cents in most contracts after seeing two-sided trade overnight. After dipping to new contract lows yesterday, winter wheat futures are enjoying some light short-covering and are up 1 to 2 cents. Spring wheat futures are posting similar gains. The U.S. dollar index is moderately higher, while crude oil futures are just above unchanged.
Day 1 Crop Tour results... The Farm Journal Midwest Crop Tour released official results from South Dakota and Ohio last night. For South Dakota, the Tour found an average corn yield of 147.97 bu. per acre, compared to the three-year average of 156.14 bu. per acre, and a soybean pod count in a 3 foot by 3 foot square of 899.56, compared to the three-year average of 1,027.80 pods.
For Ohio, the Tour found an average corn yield of 164.62 bu. per acre, compared to the three-year average of 159.81 bu. per acre, and a soybean pod count in a 3 foot by 3 foot square of 1,107.01 compared to the three-year average of 1,174.24 pods.
Today, scouts on the eastern leg of the Tour travel from Fishers, Indiana, to Bloomington, Illinois. Scouts on the western leg will travel from Grand Island, to Nebraska City, Nebraska. Tonight, we will release official Tour results from Nebraska and Indiana.
PF CCI holds basically steady for corn and soybeans... When USDA’s crop ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500 point scale, with 500 being perfect), the corn crop edged 0.23 points lower to 359.95 points, while the soybean crop inched 0.02 points lower to 349.14 points. Ratings improved in some western Belt states after recent rains, while conditions dipped in some eastern Belt states, resulting in basically unchanged ratings from last week. Get details here.
Cordonnier raises corn and soybean crop pegs in response to rain... Crop Consultant Dr. Michael Cordonnier raised his U.S. corn yield estimate by 1.5 bu. to 165.0 bu. per acre this week, citing better crop conditions after rains last week in the western Corn Belt and in Iowa on Monday. This bumped his crop estimate up to 13.76 billion bushels. Cordonnier also raised his bean yield peg by 1 bu. to 47.5 bu. per acre, citing favorable August weather for the western Belt, with the exception of Iowa. He now estimates soybean production at 4.21 billion bushels. He has a neutral bias toward both crop pegs.
Celeres calls for Brazilian corn and soybean crops to decline from this year’s record highs... Brazil’s corn and soybean crops will likely come down from this year’s record-setting levels in 2017-18, according to the consultancy Celeres. It projects the country’s bean crop will total 109.1 MMT in 2017-18, versus 113.8 MMT in 2016-17, explaining that while acreage will likely climb, yields should retreat from this year’s impressive levels. It pegs Brazil’s corn crop at 95.8 MMT, versus this season’s 100.7 MMT. The firm details that farmers in the country will likely cut summer production but boost safrinha acreage.
Record-large grain crop to extend Russia’s main shipping season... Russia is expected to bring in a record 2017-18 grain crop of between 125 MMT and 127 MMT, according to unofficial estimates, which will test its storage capacity and transport infrastructure. Normally, Russia ships the bulk of its exports in the first three to four months of its July to June marketing year. But this year’s hefty crop is expected to extend the shipping season, posing more competition to the U.S. and the EU. Russian grain exports in August and September likely to be near record levels, with some saying shipments would be even higher if it were not for infrastructure limitations.
Rains causing problems for German wheat producers... Germany’s farm lobby says persistent rain has damaged crops and lowered production prospects for both winter wheat and winter rapeseed. It now estimates the winter wheat crop at 23.4 MMT, down 3% from year-ago. Yesterday, the European Union’s crop monitoring service, MARS, lowered its soft wheat yield estimate for Germany slightly to 7.7 MT per hectare, down 3.3% from the three-year average, also citing rains that have delayed harvest and raised quality concerns. Germany is the second largest wheat producer in the bloc.
U.S. next week to push corn, wheat, rice cases against China at WTO… The World Trade Organization’s Dispute Settlement Body next week will see the U.S. requesting panels on several ag trade issues with China, including how Beijing administers tariff-rate quotas on rice, wheat and corn. The U.S. will continue pushing a case launched by the Obama administration against China’s alleged illegal subsidies for its rice, wheat and corn producers.
Immigration deal being pushed by some in White House… Some White House officials want President Donald Trump to reach a deal with Congress that offers Dreamers protection in exchange for legislation that pays for a border wall and more detention facilities, curbs legal immigration and implements E-verify, an online system that allows businesses to check immigration status. But some sources say the wall funding addition would never clear top congressional Democrats.
Cold Storage data out today... USDA will release its monthly update on the amount of frozen meat in Cold Storage at 2:00 p.m. CT. Total frozen beef stocks will likely come in at 416.1 million lbs. for the end of July, with total frozen pork stocks at 561.4 million lbs., according to two analysts surveyed by Reuters. This would be a slight dip in red meat supplies from the end of June when frozen beef stocks stood at 416.681 million lbs. and frozen pork stocks stood at 562.973 million pounds.
Beef prices slump, but showlists tighten... Choice and Select boxed beef prices fell $1.20 and 88 cents, respectively, to start the week and movement was lackluster at 103 loads. But showlist estimates are down a net 11,000 head this week, which could boost feedlots’ bargaining power. Last week, sales took place at a weighted average price of $109.68, according to USDA.
Cash hog prices remain under pressure... Monday’s kill was down 21,000 head from last week and 11,000 head under year-ago. Given building supplies, traders will continue to monitor daily kills to make sure supplies are not backing up. Cash hog bids softened more than $2 to start the week, signaling packers are having no trouble securing supplies. But on a more encouraging note, pork bellies ticked up for the first time in a week, though the cut is still down more than $25 from last Tuesday.
Overnight demand news... Iran tendered to buy up to 200,000 MT of feed barley and 200,000 MT of corn. Japan tendered to buy a total of 133,791 MT of food-quality wheat from the U.S. and Canada in its regular tender. Tunisia tendered to buy 50,000 MT of feed barley from optional origins.
Today’s reports:
- 2:00 p.m., Chickens and Eggs-- NASS
- 2:00 p.m., Cold Storage-- NASS
- 2:00 p.m., U.S. and Canadian Cattle -- NASS
- 2:00 p.m., U.S. and Canadian Hogs -- NASS
- Tonight, Midwest Crop Tour results from Indiana and Nebraska -- Farm Journal
