Good morning!
Mild corrective buying in grains overnight... Corn, soybeans and wheat recouped a portion of Monday’s sharp losses during the overnight session. As of 6:30 a.m. CT, corn and futures are trading 3 to 4 cents higher, while wheat futures are 1 to 4 cents higher. The U.S. dollar index is around 100 points higher and front-month crude oil futures are about $1.25 lower this morning.
Corn and soybean CCI ratings slip, spring wheat improves... USDA rated 68% of the corn crop as “good” to “excellent” and 9% “poor” to “very poor.” The soybean crop was rated 68% “good” to “excellent” and 8% “poor” to “very poor.” On the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop dropped 1.9 points to 373.4 while the soybean crop slipped 0.5 point to 364.9. USDA rated 77% of the spring wheat crop as “good” to “excellent” and 3% “poor” to “very poor.” On the CCI, spring wheat improved 0.6 point to 384.1. Click here for details.
Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update as of July 14:
· Corn: 68% good/excellent (68% last week); 41% silking (32% average); 8% dough (4% average).
· Soybeans: 68% good/excellent (68% last week); 51% blooming (44% average); 18% setting pods (12% average).
· Spring wheat: 77% good/excellent (75% last week); 76% headed (78% average).
· Cotton: 45% good/excellent (45% last week); 64% squaring (63% average); 27% setting bolls (22% average).
· Winter wheat: 71% harvested (62% average).
Cordonnier raises corn yield, production forecasts... Crop consultant Dr. Michael Cordonnier raised his corn yield estimate 1 bu. to 180 bu. per acre given beneficial weather as corn started pollination. That increased his corn production forecast to 14.85 billion bushels. Cordonnier left his soybean yield and production forecasts at 52 bu. per acre and 4.39 billion bu., respectively.
Ukraine’s grain/oilseed production to fall more than 6%... Ukraine’s combined grain and oilseed production could fall to 77 MMT from around 82 MMT in 2023, the county’s major agricultural producers group Ukrainian Agrarian Council (UAC) said. Despite the production decline, a UAC official said the 2024-25 exportable surplus would be around 60 MMT, almost the same amount the country exported in 2023-24.
Ukraine’s summer crops face heat, moisture stress... Ukraine’s summer crops may decline 20% to 30% in central, southern and eastern regions due to extreme heat, state weather forecasters said. The weather center said 30% to 50% of the overall area planted to summer crops could be affected by drought. Forecasters noted corn was at the most vulnerable stage of development to the effects of extreme temperatures and requires maximum moisture.
Trump picks Vance as running mate... Former President Donald Trump selected Ohio Senator JD Vance as his vice-presidential running mate for the 2024 election. This decision marks a significant transformation in Vance’s political career, as he has evolved from being a vocal critic of Trump during the 2016 election to becoming a staunch ally and supporter. At 39 years old (he turns 40 on Aug. 2), Vance brings a youthful energy to the ticket. This selection is seen as a departure from suggestions within the Republican Party to choose a candidate who could diversify the ticket racially or adopt a more moderate tone. Vance was named a “Friend of Agriculture” by the Ohio Farm Bureau, indicating his views on agricultural policy align with the organization’s membership. Vance is a vocal advocate for the oil and gas industry, particularly emphasizing Ohio’s role as a major producer of natural gas and oil. He opposes solar power and electric vehicles, showing skepticism towards clean energy initiatives. Vance has expressed doubt about human-caused climate change, arguing that climate variations have been occurring for thousands of years. He advocates for policies that support domestic energy production, aiming to reduce reliance on foreign oil and achieve energy independence for the United States. Click here for more information via our special report.
China’s manufacturing outpaces economy for third straight quarter... China’s manufacturing sector grew faster than the overall economy for a third quarter in a row, underscoring how industry and exports are driving growth in the world’s second-largest economy, Bloomberg reports. Manufacturing expanded 6.2% last quarter, according to detailed GDP data released Tuesday. That was faster than the 4.7% real growth in the overall economy and kept the sector’s contribution to total activity at 27%, matching the previous quarter’s one-year high. This strength contrasts with the shrinking real estate sector, which contracted for a fifth quarter in a row.
Euro zone economic sentiment declines in July... The ZEW Indicator of Economic Sentiment for the euro zone dropped 7.6 points to 43.7 in July, retreating sharply from the three-year high in the previous month and firmly below market expectations of 48.1. Despite marking the 10th consecutive improvement in the morale gauge, the softening of optimism was in line with recent concerns that growth in the euro zone’s economy may refrain from gaining significant traction.
Data suggests additional Japanese yen intervention... Japan may have spent an additional 2.14 trillion yen ($13.50 billion) on Friday in the foreign exchange market as it intervened to shore up the yen late last week, Bank of Japan (BOJ) data suggested. The central bank’s projection for Wednesday’s money market conditions indicated a 2.74 trillion yen net receipt of funds, compared with a 600 billion yen net receipt estimate from money market brokerages, that excludes intervention. The suggests the ministry of finance could have spent around 2.14 trillion yen intervening in the market last Friday. That would be on top of the 3.37 trillion to 3.57 trillion yen it is estimated to have spent last Thursday.
Weaker cash cattle prices expected again this week... Cash cattle prices averaged $194.24 last week, down $2.85 from the previous week’s all-time high, though not as weak as early trade indicated. Cash sources expect prices to decline again this week as packers purchased a relatively large amount of cattle since the beginning of June given the current supply situation.
Pork cutout slips... The pork cutout slipped 55 cents on Monday as losses in butts and hams more than offset gains in the other cuts. Movement totaled 261.1 loads for the day. The CME lean hog index firmed 4 cents to $88.42 as of July 12. The new lead-month August contract finished Monday virtually in line with the cash index.
Overnight demand news... Japan is seeking 115,208 MT of milling wheat in its weekly tender. Egypt tendered to buy an unspecified amount of wheat from multiple origins. Thailand tendered to buy 175,200 MT of optional origin feed wheat.
See ‘Policy Updates’ for late-breaking morning news updates... For updates to items in “First Thing Today” or any late-breaking morning news stories, check “Policy Updates” on www.profarmer.com.
Today’s reports
· 11:00 a.m. Cotton and Wool Outlook: July 2024 — ERS
· 11:00 a.m. Oil Crops Outlook: July 2024 — ERS
· 2:00 p.m. Feed Outlook: July 2024 — ERS
· 2:00 p.m. Rice Outlook: July 2024 — ERS
· 2:00 p.m. Wheat Outlook: July 2024 — ERS