Good morning!
Soybeans and wheat futures strengthen to kick off week… Corn futures are narrowly mixed to start the week, while soybean futures are up 3 to 5 cents. Wheat futures are 5 to 8 cents higher, with SRW wheat leading gains. The U.S. dollar index is slightly higher. Crude oil futures are posting solid losses.
Pro Farmer Crop Tour begins… Scouts on our Crop Tour are in the fields sampling fields. Follow along with updates on our site and by searching #pftour21 on Twitter. Scouts on the eastern leg of the tour are making their way from Dublin, Ohio to Noblesville, Indiana. Those on the western leg are scouting fields between Sioux Falls, South Dakota and Grand Island, Nebraska. Look for preliminary route reports from Tour leaders in “Evening Report” and on our website. We’ll release the Tour results for Ohio and South Dakota and stream the nightly meeting on our site tonight. The Pro Farmer corn and soybean crop estimates will be released Friday at 1:30 p.m. CT. Our “Crops Analysis” and Livestock Analysis” reports will be replaced with “After the Bell” this week.
Rain chances for the Midwest and Northern Plains later this week… Tropical Storm Fred should make landfall near Destin, Florida Monday afternoon or night. Damage to crops should be limited due to the storm’s weak intensity, reports World Weather Inc. The weather watcher reports the flux of moisture into the central U.S. could set the stage for more rain in the northern U.S. Plains and Canada’s Prairies late this week, though Tropical Depression Grace could interfere. The Midwest, Delta and central and southern U.S. Plains “will experience a good mix of weather during the next 10 days with sufficient rain to limit the expansion of dryness into the key Corn and Soybean belt production areas,” World Weather reports. It adds, “Any expansion of crop moisture stress into the Midwest from the northern Plains and far northwestern Corn Belt will be very slow and not likely to add much new potential for crop losses.”
The week ahead… The House is in recess but will return to Washington on Aug. 23 to vote on the budget blueprint and perhaps other legislation. Asked about House Speaker Nancy Pelosi’s (D-Calif.) next move, a senior House Democratic aide said the party doesn’t have enough votes to pass the bipartisan infrastructure bill this month. The aide contrasted the nine moderates who sent the letter with the dozens of the most liberal Democrats who would vote against that measure unless it comes after the Senate sends the House its $3.5-trillion social and environmental bill. The Senate is in recess through Sept. 13. The retail sales report on Tuesday will be watched for any major changes in the relatively solid tone of the U.S. economy. USDA will release its Cattle on Feed Report on Friday.
July crush expected to be the smallest for the month since 2017… Members of the National Oilseed Processors Association will likely report they crushed 159.06 million bu. of soybeans during July, which would be a modest 4.4% improvement from June’s 152.41 million bu. crush but down 7.9% from year-ago when the NOPA crush totaled 172.79 million bushels. Plant downtime along with tight supplies and high prices are expected to curb processing to a four-year low for July.
Argentina reroutes funds to help with low water along the Parana River… On Friday, Argentina’s government announced it would redirect a loan from the Inter-American Development Bank for $300 million to help mediate the impact of drought on the Parana River that is so essential for the country’s exports, drinking water and electricity generation. Argentina’s has also declared a “State of Water Emergency” for 180 days. Water levels along the river are at their lowest in 77 years, with experts saying the situation is likely to worsen before it gets better.
Safras & Mercado expects Brazil’s soybean exports to hit 90 MMT next season… Brazil will likely export 90 MMT of soybeans during 2022, which would mark yet another record, projects the agribusiness consultancy Safras & Mercado. This season, it expects the country to ship 86 MMT of soybeans. The consultancy also expects domestic crush to hit 46.7 MMT in 2021 and 48.5 MMT in 2022, with demand for soy byproducts expected to hold strong. Safras & Mercado expects a 5% rise in Brazil’s soybean production to 147.41 MMT in 2022.
Russian wheat prices jumped over the past week… The consultancy IKAR reports prices for Russian wheat with 12.5% protein loading from Black Sea ports for supply in August jumped $20 over the past week to $287 per metric ton, free on board. Another consultancy, SovEcon, says prices climbed $18 by week’s end to $286 per MT. Dmitry Rylko, the head of IKAR described the situation as a “perfect storm” and said, “The most recent USDA report caused a sharp rise in international wheat values, including Russia’s.” SovEcon notes that demand from exporters and domestic consumers have climbed at a time when farmers are still slow sellers. The firm says, “Domestic buyers are waking up and upping bids aggressively.” Last week, USDA slashed its Russian wheat crop estimate by 12.5 MMT to 72.5 MMT.
Don’t get ahead of yourself on WHIP+ Plus… The WHIP+ Plus program for 2020 and 2021 crop disasters and funding for livestock producers is unlikely to be announced or approved anytime soon. It has not even gone through the political process and there are different versions of the bill in the House and Senate. It is expected to be included in a must-pass measure by the end of this year. Therefore, no details are known and signup dates cannot be even guessed at this time.
Largest permanent boost to SNAP/food stamp benefits... The Biden administration has revised the nutrition standards of the food stamp program and prompted the largest permanent increase to benefits in the program’s history, adding billions of dollars to the cost of a program. The announcement is expected today and was first reported by the New York Times. The rules will be put in place in October, with average benefits rising more than 2% from pre-pandemic levels. All 42 million people in the program will receive additional aid. The move does not require congressional approval, and unlike the large pandemic-era expansions, which are starting to expire, the changes are meant to last.
Pelosi makes her move… In a “Dear Colleague” letter to House Democrats, Pelosi said she “requested that the Rules Committee explore the possibility of a rule that advances both the budget resolution and the bipartisan infrastructure package.” A vote to adopt a rule, which sets terms for floor debate, wouldn’t clear the $550-billion physical infrastructure bill for President Joe Biden’s signature. But it would set up floor consideration of the package later this year. The move is being made to deal with nine centrist House Democrats demanding a timely vote on the infrastructure package to get their support. “Our goal is to pass the budget resolution the week of Aug. 23 so that we may pass Democrats’ Build Back Better agenda” as fast as possible, Pelosi wrote. She said the initial procedural vote she wants the House to take “will put us on a path to advance” both the infrastructure and the social and environment measures. The $3.5-trillion measure is the top priority for progressive Democrats. Passing the budget resolution is pivotal because it would shield the $3.5-trillion bill from Republican Senate filibusters, or delays, that would kill it.
Concerns over U.S. terror threats rising as Taliban hold grows… America’s top general said Sunday that the U.S. could now face a rise in terrorist threats from a Taliban-run Afghanistan. The Taliban entered the capital city of Kabul, effectively sealing the insurgency’s swift takeover of Afghanistan two decades after the U.S. invaded. Meanwhile, Biden authorized an additional 1,000 U.S. troops for deployment to Afghanistan, raising to roughly 5,000 the number of U.S. troops to ensure what Biden called an “orderly and safe drawdown” of American and allied personnel. The U.S. State Department said that it was working to secure control of the airport, with core employees moved to a military-controlled section there. Thousands of other U.S. citizens and Afghans who aided the U.S. military are still in the country.
ITC votes to continue investigation into UAN from Russia, Trinidad and Tobago… The U.S. International Trade Commission (ITC) voted unanimously Friday (Aug. 13) to continue its investigation into imports of urea ammonium nitrate (UAN) fertilizer from Russian and Trinidad and Tobago that are allegedly subsidized and sold into the US at less than fair value. The determination means that the U.S. Department of Commerce (DOC) will continue the investigation into imports of UAN from Russia and Trinidad and Tobago with a preliminary countervailing duty determination due on or about Sept. 23 and the antidumping determinations due about Dec. 7. The ITC will notify DOC of its determination today.
Uninterrupted beef rally continues… Cash cattle prices climbed to $127 in Iowa on Friday, up from trade earlier in the week and the week prior. Nebraska saw additional trade at $123, with light action occurring at $121 in Texas and Kansas. Boxed beef values continue to surge, with Choice rising $6.90 and Select jumping $7.71. Movement did slow to 91 loads. Friday’s gains stretch the rally in beef prices to 17 days. But demand for beef could slow as grocers complete their purchases for Labor Day weekend.
Big jump for pork values on Friday… October lean hog futures take over as the front month this week and the contract holds a steep, $20-plus discount to the CME lean hog index, which could limit pressure on the contract, despite looming seasonal rise in hog slaughter. Last week’s kill climbed 4.0% from year-ago levels. Also encouraging, the pork cutout value surged $6.31 on Friday, with hams jumping $22.70, and movement picking up to 379.61 loads. That could signal soaring beef prices have improved demand for pork.
Weekend demand news… Turkey tendered to buy around 270,000 MT of feed barley. Jordan’s state grain buyer issued an international tender to buy 120,000 MT of animal feed barley.
Today’s reports
- 6:00 a.m. Pro Farmer Crop Tour — Pro Farmer
- 10:00 a.m. Weekly Export Inspections – AMS
- 11:00 a.m. Monthly Crush — NOPA
- 11:00 a.m. Cotton and Wool Outlook: August 2021 — ERS
- 11:00 a.m. Oil Crops Outlook: August 2021 — ERS
- 2:00 p.m. Dairy Monthly Tables and Dairy Quarterly Data — ERS
- 2:00 p.m. Feed Outlook: August 2021 — ERS
- 2:00 p.m. Rice Outlook: August 2021 — ERS
- 2:00 p.m. Wheat Outlook: August 2021 — ERS
- 3:00 p.m. Crop Progress — NASS