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Soybean cash-only marketers: Finish 2023-crop sales... Soybean futures ended higher today but could face pressure given record production/yield potential and favorable finishing weather. We advise soybean cash-only marketers to sell the final 20% of 2023-crop production to get to 100% sold.
Pro Farmer national corn and soybean crop estimates:
Corn: 14.979 billion bu.; Average yield of 181.1 bu. pe acre=/- 1% = 15.129 – 14.829 billion bu; 182.9 to 179.3 bu. per acre
Soybeans: 4.740 billion bu.; Average yield of 54.9 bu. per acre=/- 2% = 4.835 – 4.645 billion bu; 56.0 to 53.8 bu. per acre.
Note: The national estimates above reflect Pro Farmer’s view on production and yields. They take into account data gathered during Crop Tour and other factors like crop maturity, historical differences in Tour data versus USDA’s final yields, areas outside those sampled on Tour, etc. That’s why the state yield numbers below differ from the previously released Crop Tour figures.
Following are Pro Farmer’s state by state corn yield estimates:
Iowa: 212 bu. per acre. The southern two-thirds of Iowa showed strong yield potential. The northern third of the state showed impacts from too much rainfall early in the growing season.
Illinois: 220 bu. per acre. The Illinois corn yield will smash the record of 214 bu. per acre from 2022. While there is more variability in fields than we expected, the high-yielding fields far exceed those that disappointed.
Nebraska: 189 bu. per acre. Some of the dryland corn is as good as the irrigated acres and will pull the yield up this year. The irrigated corn won’t pull the yield down. We saw a limited number of irrigation pivots running on corn, suggesting farmers think the crop has enough moisture to finish.
Minnesota: 170 bu. per acre. The southern third of the state, which is normally the highest-yielding counties, is laden with drowned out spots and yellow corn from the heavy spring rainfall. But areas further north and east of I-35 are better than normal.
Indiana: 210 bu. per acre. The Indiana corn crop showed the most consistency of any of the crops we sampled last week. Ear counts and grain length were up from year-ago, while there’s plenty of soil moisture for most areas of the state to finish strong. The only real blemish was instances of tar spot.
Ohio: 197 bu. per acre. The Ohio corn crop won’t top last year’s record yield, but it won’t be far behind. The difference: This year’s crop has more variability.
South Dakota: South Dakota: 156 bu. per acre. There are two very different crops in South Dakota — the early planted and late planted acres. The later developing crop will be an anchor on yields to keep them from being bigger.
Following are Pro Farmer’s state by state soybean yield estimates:
Iowa: 67 bu. per acre. Soybean pod counts increased 10.2% from last year and were 9.9% above the three-year average. Soil moisture increased 41.6% from 2023 and 33.7% versus the three-year average.
Illinois: 68 bu. per acre. Pod counts jumped 11.7% from last year and 12.0% from the three-year average. Soil moisture rose 22.4% from 2023 and 15.9% from the three-year average.
Nebraska: 57 bu. per acre. Pod counts rose 1.1% from last year and 2.0% from the three-year average. Soil moisture jumped 35.5% from 2023 and 32.2% from the 2021-2023 average.
Minnesota: 49 bu. per acre. Pod counts rose 5.2% from last year but slipped 0.1% from the three-year average. Soil moisture jumped 28.3% from 2023 and 21.5% from the three-year average.
Indiana: 67 bu. per acre. Pod counts increased 7.6% from 2023 and 13.8% from the 2021-23 average. Soil moisture rose 3.7% from last year and 12.0% from the three-year average.
Ohio: 66 bu. per acre. Pod counts dropped 1.8% from last year but were 3.1% above the three-year average. Soil moisture increased 8.5% from last year but declined 4.2% from the three-year average.
South Dakota: 50 bu. per acre. Pod counts increased 1.3% from last year and 6.8% from the three-year average. Soil moisture jumped 18.2% from last year and 32.6% from the three-year average.
The USDA Cattle on Feed report released Friday afternoon…may prove negative for cattle futures on Monday’s opening, since it stated July placements by large feedlots (holding 1,000+ head) about 3% above industry expectations and up 5.8% % from the year-ago figure, topping the range of analyst estimates. The August 1 cattle on feed population figure at 11.095 million head inched up 0.3% rose above the year-ago total, whereas an 11.030 million result was anticipated.
Cattle on Feed Report | USDA(% of year-ago) | Average Estimate (% of year-ago) |
On Feed on Aug. 1 | 100.3% | 100.0% |
Placements in July | 105.8% | 103.2% |
Marketings in July | 107.7% | 108.1% |
July marketings at 1.855 million head came in 7.7% over the comparable year-ago result due to two extra workdays versus those seen in July 2023. An 8.1% annual increase was expected, so this figure likely disappointed market bulls as well, since it suggests producers did not market cattle as aggressively as they might have, thereby leaving a relatively large number of market-ready cattle in feedlots to start August.
Federal Reserve Chair Jerome Powell’s speech…at the Jackson Hole symposium in Wyoming this morning addressed several key points regarding the U.S. economic outlook and monetary policy:
Interest rate cuts: Powell signaled that the Federal Reserve is likely to begin cutting interest rates in September. He emphasized that the timing and scale of these cuts would depend on incoming economic data and the evolving economic outlook. “The direction of travel is clear” for the Fed in monetary policy, said Powell, as the Fed angles to pivot toward rate cuts.
Inflation and labor market: Powell expressed confidence that inflation is approaching the Fed’s 2% target, noting significant progress in reducing inflation from its peak levels. “With an appropriate dialing back of policy restraint, there is good reason to think that the economy will get back to 2% inflation while maintaining a strong labor market,” Powell said. He highlighted that while the labor market is no longer overheated, the Fed remains cautious about potential declines in employment and is committed to supporting a robust labor market. “We do not seek or welcome further cooling in labor market conditions,” Powell said, adding the Fed will do “everything we can” to support a strong labor market, a hint the central bank will be aggressive in cutting rates to support economic stability.
Economic progress since the pandemic: Powell reviewed the economic developments since the onset of the Covid-19 pandemic, acknowledging the challenges faced and the progress made in stabilizing inflation while maintaining employment levels. He underscored the importance of learning from the pandemic’s economic impacts to refine future monetary policy strategies.
Future monetary policy: Powell reiterated the Fed’s commitment to a data-dependent approach, indicating that any policy adjustments would be guided by economic indicators such as inflation and employment trends. He also mentioned the Fed’s ongoing efforts to achieve a “soft landing” for the economy, aiming to reduce inflation without triggering a recession.
Financial markets responded positively to Powell’s speech: The S&P 500 rose to a more than 1% gain within five minutes after the release of the transcript, and yields for 2-year and 10-year Treasury notes fell about five basis points apiece (lower yields mean more valuable bonds).
A Canadian workers union, the Teamsters Canada Rail Conference…has issued a 72-hour strike notice to Canadian National Railway (CN) shortly after the company resumed operations following a significant stoppage. This action comes as the union plans to challenge a government order that forced it into arbitration with both CN and Canadian Pacific Kansas City Ltd. (CPKC) to resolve a lockout situation.
The Canadian government, concerned about the economic implications of a prolonged railway stoppage, mandated arbitration between the railroads and the union. This decision was made after a lockout by CN and CPKC, which halted all freight handled by rail in Canada, affecting the economy significantly due to the reliance on rail for transporting goods across industries.
The union’s strike notice is a response to the government’s intervention, which it views as a forced measure, limiting their negotiation rights. Teamsters Canada President Francois Laporte emphasized that the strike notice is about exercising their legal rights within the framework of the law. The union represents approximately 10,000 workers, including engineers, conductors, and dispatchers, at both CN and CPKC.
The labor dispute has been ongoing due to disagreements over contract terms, including safety-critical fatigue provisions and relocation policies. The union accuses the rail companies of trying to undermine these provisions, while the companies claim they are maintaining compliance with regulatory requirements.
The situation remains tense as both sides prepare for potential work stoppages, which could have significant impacts on supply chains in both Canada and the U.S.
If the strike by the Teamsters Canada Rail Conference is not resolved within the 72-hour notice period, it could lead to significant economic and logistical consequences for both Canada and the United States. Some potential impacts:
Economic impact: The Canadian economy could face substantial financial losses, estimated at $300 million for a three-day strike and up to $1 billion if it extends to a week. The U.S. economy could also suffer, with potential costs of about $70 million per day after a week of disruption.
Supply chain disruptions: Rail is a crucial component of the supply chain, particularly for industries reliant on raw materials and finished goods transported by rail. Prolonged disruptions could lead to shortages of essential goods such as chemicals, auto parts, and consumer products. This could cause delays in production and increase costs for businesses that depend on these supplies.
Impact on trade: With billions of dollars in goods moving between Canada and the U.S. via rail each month, a prolonged strike could severely affect cross-border trade. This is particularly concerning given that about one-fifth of U.S. trade initially arrives at Canadian ports and is transported by rail.
Inflationary pressures: The disruption could rekindle inflation by causing shortages and increasing prices for goods that are in high demand but short supply. This could further slow economic growth in both countries.
Job losses: Companies directly impacted by the rail stoppage might have to scale back operations or temporarily shut down, leading to potential job losses.
Commuter impact: In Canada, about 30,000 commuters who rely on rail services for daily transportation could be affected, leading to increased congestion and delays in other modes of transportation.