Good morning!
Quiet overnight session... Corn, soybeans and wheat are mildly weaker this morning after two-sided trade earlier in the overnight session. As of 6:30 a.m. CT, corn futures are trading steady to fractionally lower, soybeans are mostly 4 cents lower and wheat futures are 2 to 4 cents lower. The U.S. dollar index is modestly weaker while front-month crude oil futures are mildly firmer.
Weekly Export Sales Report out this morning... For the week ended Aug. 29, traders expect:
| 2023-24 expectations (in MT) | 2023-24 last week | 2024-25 expectations (in MT) | 2024-25 last week |
Corn | (100,000)-100,000 | 15,291 | 700,000-1,400,000 | 1,494,139 |
Wheat | NA | NA | 300,000-600,000 | 532,079 |
Soybeans | (200,000)-200,000 | (143,600) | 800,000-2,000,000 | 2,615,839 |
Soymeal | 0-100,000 | 21,247 | 150,000-550,000 | 428,921 |
Soyoil | 0-10,000 | 1,077 | 0-10,000 | 0 |
Rebound expected in August jobs data... Non-farm payrolls are expected to rebound from last month’s report, which showed the smallest monthly increase since January 2021. Economists polled by Reuters expect payrolls to improve to 160,000 for August, though ADP data showed employers added fewer jobs than anticipated last month. The unemployment rate is anticipated to ease to 4.2%.
French wheat quality lacking... Updated results on milling quality in this year’s rain-hit French soft wheat crop showed test weights were slightly better than previously estimated but still mostly below common market standards. In a third round of results from a wheat quality survey conducted with crop institute Arvalis, France’s ag ministry said 28% of the soft wheat crop scored test weights above the common standard of 76 kilos per hectoliter. That was up from 26% in the previous results last week but still far below the five-year average of 76%. The ministry noted 74% of the crop had an average protein content above 11%, unchanged from the previous results but below the five-year average of 85%. Hagberg falling numbers, another measure of milling quality, showed 99% of the crop with a reading above 240 seconds, unchanged from the previous report but above the 87% average.
FAO food price index slips again in August... The UN Food and Agriculture Organization global food price index slipped 0.5% in August, the second straight small monthly decline, as decreases in sugar, meat and cereal grains outweighed increases for vegoils and dairy products. The August index was down 1.1% from last year. Compared to year-ago, prices declined 12.0% for cereal grains and 23.1% for sugar, while they rose 3.6% for meats, 14.3% for dairy and 8.1% for vegoils.
India to extend sugar export ban to boost domestic supplies, ethanol output... India plans to extend a ban on sugar exports for the second straight year as the world’s biggest consumer of the sweetener grapples with the prospects of lower cane output, government sources told Reuters. New Delhi is also considering an increase in ethanol procurement price by more than 5% for the new marketing season beginning in November, sources said. Late last month, a government order said India would allow sugar mills to use cane juice or syrup to produce ethanol starting in November.
Lighthizer hints Trump may retain parts of IRA and opt for targeted tariffs... Former U.S. Trade Representative Robert Lighthizer indicated that a potential Trump administration may keep parts of the Inflation Reduction Act (IRA) that support U.S. manufacturing, despite GOP opposition, according to Politico. He also suggested a “smart tariff” strategy, targeting specific products rather than broad tariffs. Lighthizer discussed potential approaches to implementing tariffs in a second Trump term, saying: “There is certainly a considerable amount of existing law that allows for tariffs to be imposed under various circumstances. We experienced this during our last administration, and I suspect a similar strategy will emerge this time as well.”
Trump pledges 15% corporate tax rate... Donald Trump vowed to cut the corporate tax rate to 15% for U.S.-made products, a significant reduction from the current 21%, as part of his 2024 campaign agenda. Speaking at the Economic Club of New York, Trump pitched a pro-business platform, pledging lower taxes, regulations and energy costs. He also embraced a proposal from billionaire Elon Musk to lead a task force auditing federal expenditures. The plan contrasts sharply with Democratic rival Kamala Harris’ approach, who advocates for a higher 28% corporate tax rate.
U.S., China make progress in climate finance talks despite ongoing tensions... U.S. climate adviser John Podesta announced this week’s climate talks with China in Beijing helped narrow differences on climate finance and emissions cuts. While key challenges remain, the discussions were seen as productive, focusing on funding for developing nations and setting new climate goals. The talks are a critical step before upcoming U.S. elections and the UN climate summit in November.
Euro zone Q2 GDP revised lower... The euro zone economy grew at a slower pace than previously reported in the second quarter. GDP in the 20 countries sharing the euro rose 0.2% in the April-June period compared with the previous three months, down from the previously estimated 0.3% increase. Annual GDP growth was 0.6%, in line with the preliminary estimate.
Light cash cattle activity at lower prices... Cash cattle trade occurred at roughly $2.00 lower prices in both the Southern Plains and northern market on Thursday, which was lower than most cash sources anticipated. Cattle futures faced heavy selling pressure amid the disappointing cash trade.
Cash hog index, pork cutout diverging... The CME lean hog index is up 16 cents to $86.43 as of Sept. 4, marking a second straight daily gain. The pork cutout fell 42 cents on Thursday to $94.87, the second straight daily decline, as hams dropped $5.39 and bellies sunk $1.35 while the other cuts firmed.
Overnight demand news... South Korea purchased up to 68,000 MT of U.S. corn.
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
· 7:30 a.m. Weekly Export Sales — FAS
· 2:00 p.m. U.S. Agricultural Trade Data Update — ERS
· 2:00 p.m. Dairy Products — NASS
· 2:00 p.m. Peanut Prices — NASS