Good morning!
Quiet overnight grain trade... Corn, soybeans and wheat held in tight trading ranges during a quiet, two-sided overnight session. As of 6:30 a.m. CT, corn futures are trading fractionally higher, soybeans are 4 to 5 cents lower and wheat futures are narrowly mixed. Front-month crude oil futures are 50 cents lower and the U.S. dollar index is around 125 points higher.
StoneX lowers U.S. corn, soybean crop forecasts... Commodity brokerage firm StoneX estimates the U.S. corn crop at 15.102 billion bu. on an average yield of 175 bu. per acre. That would be down from the firm’s August forecasts of 15.274 billion bu. and a yield of 177 bu. per acre. In August, USDA estimated the corn crop at 15.111 billion bu. on a yield of 175.1 bu. per acre. StoneX estimates the U.S. soybean crop at 4.144 billion bu. on a yield of 50.1 bu. per acre. That would be down from its August forecasts of 4.173 billion bu. and 50.5 bu. per acre. In August, USDA estimated the soybean crop at 4.205 billion bu. on a yield of 50.9 bu. per acre. StoneX says the estimates are for USDA’s final production number and assume USDA’s harvested acreage.
Russia continues attacks on Ukrainian Danube port... Russian drone strikes damaged port infrastructure, including a grain silo and administrative buildings in the Izmail district of Ukraine’s Odesa region. Russia has stepped up attacks on Ukraine’s grain export infrastructure, especially at Danube River ports. Romanian President Klaus Iohannis said, “We will enhance the other routes, we accepted Ukrainian maritime transports through our Romanian territorial waters off the Black Sea, we will continue to enhance exports on the rail and on the road.” Meanwhile, Ukraine has started shipping grain via Croatian seaports, aiming to broaden its export routes.
Lloyd’s in talks with UN regarding new Black Sea grain insurance coverage... Lloyd’s of London is in talks with the United Nations over providing insurance cover for Ukrainian grain shipments if a new Black Sea corridor deal can be reached, its CEO John Neal told Reuters. “Are we happy and able to continue to provide insurances in the event that a corridor can be re-operated and can be re-established? The answer to that is yes,” Neal said. “We are in active discussions with the UN about how that might happen,” Neal said, adding those conversations included the possibility that cover may need to be structured differently than before. “Absent UN intervention and UN clearance, we would not sanction the insurance,” he said.
U.S. ag trade deficit hits record high in July... The U.S. exported $12.17 billion of ag goods in July, marking a 5% decrease from the previous month and the lowest monthly figure since September 2021. Ag imports amounted to $15.75 billion, which was a 1.4% drop from June. This resulted in a monthly trade deficit of $3.58 billion, setting a record for the highest deficit in a single month. For fiscal year (FY) 2023, cumulative ag exports reached $153.54 billion, while imports totaled $163.93 billion, producing a trade deficit of $10.39 billion. USDA forecasts FY 2023 ag exports at $177.5 billion and imports of $196.5 billion, implying a record trade deficit of $19.0 billion and the third deficit in the last five fiscal years. Looking ahead to FY 2024, USDA’s initial forecasts for exports of $172.0 billion and imports of $199.5 billion would result in a record trade gap of $27.5 billion.
China soybean imports slow a little in August but remain strong... China imported 9.36 MMT of soybeans during August, down 3.8% from July but up 30.5% from last year. Through the first eight months of this year, China imported 71.65 MMT of soybeans, up 17.9% from the same period last year.
China’s trade data remains weak but exports, imports don’t contract as much as feared... China’s trade surplus slumped to $68.36 billion in August from $80.60 billion in July. It was the smallest trade surplus since May, as exports dropped more than imports amid persistently weak demand from home and abroad. China’s exports shrank 8.8% versus year-ago in August, the fourth straight month of decline, though better than market consensus of a 9.2% fall. Imports fell 7.3%, the sixth consecutive month of decrease, compared to the consensus of a 9% drop. The trade surplus with the U.S. widened to $33.06 billion in August from $30.30 billion in July, pushing the year-to-date surplus to $214.88 billion.
Export sales data pushed back to Friday... Due to Monday’s government holiday, export sales data for the week ended Aug. 31 will be published Friday morning.
Fed set to double its U.S. economic growth forecast after strong data... The Federal Reserve is expected to double its projection for U.S. economic growth in 2023 due to recent strong economic data, Bloomberg reports. Several economic reports, including those related to consumer spending and residential investment, have surpassed expectations. The Atlanta Fed’s unofficial estimate suggests an annualized expansion of 5.6% in the third quarter. This turnaround from earlier predictions may lead the Fed to scale back its interest-rate cut estimates for 2024.
China’s meat imports slowed... China imported 627,000 MT of meat during August, down 7.7% from July and 4.6% less than last year. Through the first eight months of 2023, China imported 5.11 MMT of meat, up 7.4% from the same period last year.
ASF detected in Sweden... A dead wild boar in Sweden has tested positive for African swine fever (ASF), Sweden’s Veterinary Institute said, the first such case in the country. “At present, we do not know how the infection got in, but it is a long jump from the nearest infected area in Europe, and we therefore assume that it has happened through humans and not wild boar,” Sweden’s Veterinary Institute said.
Varied cash cattle opinions... Initial cash cattle bids surfaced around $179 in the Southern Plains and $288 in the northern dressed market on Wednesday, though feedlots didn’t move cattle at those levels. Opinions on this week’s cash cattle trade are mixed, with some expecting prices to rebound while others see them falling for a fifth consecutive week.
Cash hog decline slows... The CME lean hog index is down another 55 cents to $86.01, extending the seasonal price drop, though that’s the smallest daily decline in three weeks. The cash index tends to post a brief uptick in prices in September/early October, though that doesn’t happen every year, including the past two.
Overnight demand news... Iran purchased an undisclosed amount of Brazilian corn from a tender for up to 180,000 MT. South Korea purchased 57,000 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
- 9:30 a.m. Weekly Ethanol Production — EIA
- 10:00 a.m. Livestock and Meat International Trade Data — ERS