Good morning!
Corn lower, soybeans higher to start the week... Corn futures are fractionally lower as of 6:30 a.m. CT after holding to a narrow trading range overnight. Soybeans softened to open the overnight session, but quickly turned higher. The market is currently trading high-range and up 2 cents. Winter wheat futures are down 1 to 2 cents, while spring wheat is posting similar gains. The U.S. dollar index is marginally lower, as are crude oil futures.
Weekend rains for the western Corn Belt and more could be ahead... Rain fell in the western Corn Belt and the Central Plains over the weekend, with the best accumulation in eastern Kansas, western Missouri, central and southern Iowa and eastern Nebraska. Rains were fairly light across the Upper Midwest and Northern Plains, and the eastern Corn Belt (including drought-stricken Illinois) remained dry. Hurricane Jose could graze the U.S. Northeast this week, and it will be followed by Hurricane Maria, which could hit the U.S. Virgin Islands. Meanwhile, Tropical Storm Lee formed in the eastern Atlantic Ocean on Saturday. These hurricanes could lead to limited precip for the eastern Midwest and the Southeast over the next two weeks, reports World Weather Inc. But more rains are possible for the western and central Corn Belt this week and early next week.
Washington highlights for the week-ahead... Three highlights for the week ahead include President Donald Trump’s first United Nations address while seeking support against North Korea’s nuclear program, a U.S. Federal Reserve officials meeting in which they will likely announce the start of a process to shrink the central bank’s $4.5-trillion balance sheet while keeping interest rates unchanged, and a Senate ag panel hearing on two USDA nominees. The Senate has a shortened week and the House is out until Sept. 25.
U.S. may close Havana embassy over alleged sonic attack... The United States is considering closing its embassy in Havana in response to alleged sonic attacks on U.S. personnel in Cuba. “We have it under evaluation,” Secretary of State Rex Tillerson told Face the Nation. At least 21 employees have suffered mysterious health issues, including hearing loss, nausea, headaches, dizziness and mild traumatic brain injuries.
Russian grain shipments running well ahead of year-ago... Between July 1 (the start of the 2017-18 marketing year) and Sept. 13, Russia has exported 8.9 MMT of grain, a 19% surge from year-ago levels. Wheat exports have made up 6.7 MMT of those shipments, up 6% from last year at this point. Meanwhile, Russia’s grain harvest is now estimated to be nearly 72% complete as of Sept. 14, as farmers have brought in 109.0 MMT of grain. The flow of fresh supplies onto the market has weighed on prices.
U.S./China ag dispute... On Sept. 22, the U.S. will ask the World Trade Organization (WTO) dispute settlement body to launch an investigation into whether China violated WTO rules and unfairly imposed tariff-rate quotas (TRQs) for rice, wheat, and corn imports. The WTO will evaluate U.S. allegations that China set “impermissible” restrictions on farm imports, failed to provide sufficient information about its import quantities, and didn’t disclose changes to those import quotas. As part of China’s WTO accession agreement, Beijing pledged to set specific TRQ levels for various products by applying a lower tariff rate to imports up to a certain quantity and then applying higher duties to imports that exceed the threshold. If Beijing loses the case, it could be forced to accept increased amounts of U.S. grain imports or face billions of dollars in retaliatory trade actions from Washington.
Tillerson: U.S. could stay in Paris climate change deal if right conditions met... If the emissions reduction targets for the United States are weakened in the Paris Agreement on climate change, then the U.S. could stay in the deal, U.S. Secretary of State Rex Tillerson said on Face The Nation Sunday. He said Trump feels the U.S. commitments to the agreement -- in which each country sets its own commitments and there’s no punishment for not following through with them -- are too strict. He also noted the difference in commitments between the U.S. and China as another sticking point. Get more details.
Steady to higher cash cattle trade... Cash cattle negotiations again extended late into the week, eventually resulting in sales from $105 to $106 in Kansas, Nebraska and Iowa/southern Minnesota, steady to up a buck from the week prior. Meanwhile, Choice boxed beef values held virtually steady last week, while Select cuts slipped, restoring the typical premium Choice holds to Select values. Beef movement has also been strong, signaling retailers are preparing for some beef features this fall.
Front-month trims discount to cash hog index... Cash prices continue to slide and a drop in weights is likely needed to stabilize prices. But even as the cash hog index has moved lower, futures have been working on a rebound as they still hold a discount to the cash hog index. That has helped narrow that discount to around $4 for the October contract.
Weekend demand news... Jordan issued another international tender to buy 100,000 MT of animal feed barley from optional origins. Tunisia tendered to buy 50,000 MT of feed barley from optional origins.
Today’s reports:
- 10:00 a.m., Weekly Export Inspections -- AMS
- 11:00 a.m., Livestock, Dairy, & Poultry Outlook: September 2017-- ERS
- 3:00 p.m., Crop Progress-- NASS
