Good morning!
Grains choppy to lower, soybeans slightly higher… Corn futures are narrowly mixed to lower. Soybean futures are up 3 to 4 cents. Winter wheat futures have tumbled 10 to 12 cents; spring wheat futures are 5 to 8 cents higher. The U.S. dollar index is slightly higher. Crude oil futures are under pressure. Risk-off attitudes are on the rise early this week after the Taliban’s rapid takeover of Afghanistan and as the ongoing surge of the Delta variant of Covid-19 impacts major economies.
Day 1 Crop Tour results for South Dakota and Ohio… Scouts on the first day of the Pro Farmer Crop Tour found an average corn yield of 151.5 bu. per acre in South Dakota, which was down sharply from last year’s 179.2 bu. per acre yield and well under the three-year average of 170.4 bu. per acre. Soybean pod counts in a 3’x3’ square came in at 996.9 for South Dakota, which compares with 1,250.9 pods last year and 1,036.1 pods for the three-year average.
In Ohio, samples yielded an average corn yield of 185.1 bu. per acre, up sharply from 167.7 bu. per acre last year on Tour and 167.2 bu. per acre for the three-year average. Soybean pod counts in a 3’x3’ square came in at 1,195.4 for Ohio, which compared to 1,155.7 pods last year for the state and 1,056.0 pods for the three-year average.
Today, scouts on the eastern leg of the Tour travel from Noblesville, Indiana, to Bloomington, Illinois. Scouts on the western leg will travel from Grand Island to Nebraska City, Nebraska. Tonight, we will release official Tour results from Nebraska and Indiana.
Crop Progress & Condition Report highlights… Following are highlights from USDA’s crop progress and condition update for the week ended Aug. 15.
- Corn: 73% in dough, 22% dented, 62% “good” to “excellent” (G/E)
- Soybeans: 94% blooming, 81% setting pods, 57% G/E
- Spring wheat: 11% G/E, 58% harvested
- Cotton: 93% squaring, 75% setting bolls, 10% bolls open, 67% G/E
No change to Cordonnier’s U.S. corn or soybean yield outlooks… Crop Consultant Dr. Michael Cordonnier made no change to his U.S. corn yield estimate of 175.5 bu. per acre, though his bias is neutral to lower going forward. “The weather last week was similar to what has occurred over the last two months — generally favorable in the eastern Corn Belt and drier than normal in the northwestern Corn Belt,” he says. He believes corn planted acreage may rise 500,000 acres going forward, but much of that increase could be countered by higher abandonment in the northwest Corn Belt. Cordonnier also stuck with his soybean yield projection of 50 bu. per acre and his bias is neutral to lower going forward. “The August weather thus far has favored the eastern Corn Belt with good rains and a lack of extreme heat. The weather has not been as good in the northwestern Corn Belt with only temporary relief to the dryness in selected areas, but there are improved chances of rainfall in the near term and longer-term forecast,” he reports. He speculates soybean planted acreage may rise 300,000 acres, though some of that increase may be countered by drowned out spots in central Illinois and northern Missouri.
Tropical Storm Fred bears down on Florida Panhandle… Tropical Storm Fred made landfall in the Florida Panhandle on Monday afternoon, lashing the Gulf Coast with powerful winds that could cause a dangerous storm surge, the National Hurricane Center said. “Crop damage is still expected to be minimal from this system and its remnants will move through eastern Tennessee and western North Carolina Tuesday causing a band of rain great enough to promote areas of flooding,” reports World Weather Inc.
German association trims wheat and rapeseed crop estimates… Germany’s association of farm cooperatives today lowered its estimate of the country’s wheat crop by 400,000 MT to 22.39 MMT, which would be a 1.3% decline from the 2020 season. The country dealt with repeated rain in August, though Germany was able to skirt the crop damage late-season moisture caused in France. And this came after a cold spring and a hot, dry summer. The association says crop quality is reasonable to good. The group also lowered its 2021 winter rapeseed production forecast from 3.68 MMT to 3.51 MMT, which would be near steady with last year’s crop. Harvest of both crops is winding down. Germany is the EU’s second largest producer of wheat and often its largest rapeseed producer.
Safrinha corn harvest picks up, quality issues abound… Brazilian farmers in the country’s center-south have harvested 70% of their safrinha corn crop, which lags last year’s pace by seven percentage points, reports the agribusiness consultancy AgRural. Progress picked up over the past week, though quality issues continue. AgRural reports, “In the west and southwest of Paraná ... quality problems caused by frosts abounded, with reports of loads leaving the fields with up to 40% of damage,” adding that there are also quality issued in Mato Grosso do Sul, but they are not as severe.
Biden defends withdrawal amid deadly chaos in Afghanistan… President Joe Biden offered a defiant defense Monday of his decision to withdraw troops from Afghanistan, blaming the swift collapse of the Afghan government and chaotic scenes at the Kabul airport on the refusal of the country’s military to stand and fight in the face of the Taliban advance. “I stand squarely behind my decision,” Biden said. As thousands attempt to leave for the United States, other countries are offering to take in Afghan refugees.
Western states face first federal water cuts... U.S. officials on Monday declared the first-ever water shortage from a river that serves 40 million people in the West, triggering cuts to some Arizona farmers next year amid a gripping drought. Water levels at the largest reservoir on the Colorado River — Lake Mead — have fallen to record lows. Under a 2019 drought contingency plan, Arizona, Nevada, California and Mexico agreed to give up shares of their water to maintain water levels at Lake Mead. The voluntary measures weren’t enough to prevent the shortage declaration. Eventually, some city and industrial water users could be affected. Arizona will be hardest-hit and lose 18% of its share from the river next year, or 512,000 acre-feet of water. That’s around 8% of the state’s total water use. Nevada will lose about 7% of its allocation, or 21,000 acre-feet of water. But it will not feel the shortage mainly because of conservation efforts. California is spared from immediate cuts because it has more senior water rights than Arizona and Nevada. Mexico will see a reduction of roughly 5%, or 80,000 acre-feet.
Centrist Democrats still insist on bipartisan infrastructure vote… The nine moderate Democrats who said they would not vote for the fiscal year (FY) 2022 budget resolution unless the House first voted on the bipartisan infrastructure package are sticking to their position despite the plan announced by House Speaker Nancy Pelosi (D-Calif.) to have the chamber vote on a rule for the infrastructure package. “While we appreciate the forward procedural movement on the bipartisan infrastructure agreement, our view remains consistent: We should vote first on the Bipartisan Infrastructure Framework without delay and them move to immediate consideration of the budget resolution,” the lawmakers said in a statement. With no Republicans backing the FY 2022 budget resolution, the votes of this group remain key for the measure moving forward.
China’s sow herd contracts for first time in nearly two years… China’s sow herd declined 0.5% from June to July, the first decline in nearly two years, reports state media. But the herd was still up 25% from year-ago, according to China’s National Development and Reform Commission (CNDRC) spokesman Meng Wei. The country had 45.6 million sows at the end of June, which was still up 2% from late 2017, before African swine fever hit. A dive in prices in recent months led to panic selling and producers have been working to get rid of unproductive sows. An executive at China’s largest pork processor, WH Group, last week warned that the June liquidation of sows had been significant and could push live hog prices higher the second half of 2022. China’s total pig herd climbed 0.8% in July, with the herd now up 31% from year-ago, CNDRC reports.
USDA clears another Brazil plant to export meat to U.S…. USDA’s Food Safety and Inspection Service announced that as of Aug. 12, Mafrig Global SA (establishment (3250) has been added to the list of eligible plants that have been certified to export meat to the U.S.
Beef movement slows… Live cattle futures settled split, with nearbys higher on the ongoing beef rally. Choice climbed $4.97 and Select surged $5.53 on Monday, but movement slowed to 78 loads. That could hint a top is near. Load counts have been shy of 100 for three consecutive days. Cash cattle traded at an average price of $123.28 last week, down 55 cents from the week prior and a disappointment given soaring boxed beef values and packer profit margins. Packer profit margins top $901 a head, according to HedgersEdge.com.
Big price swings for hams continue… Lean hog futures posted moderate to sharp gains to start the week, with the October contract gapping higher and leading gains. The pork cutout value tumbled $6.33, continuing the recent trend of market volatility. Hams once again were the major price driver, with prices dropping nearly $26. Meanwhile, national average cash hog bids dropped $2.29 on Monday.
Overnight demand news… South Korea’s largest feedmaker Nonghyup Feed Inc. is thought to have purchased around 138,000 MT of feed corn from South America.
Today’s reports
- 6:00 a.m. Pro Farmer Crop Tour — Pro Farmer
- 10:00 a.m. Fruit and Tree Nut Data — ERS
- 10:00 a.m. Vegetables and Pulses Data — ERS
- 11:00 a.m. Feed Grains: Yearbook Tables — ERS