Good morning!
Grains up slightly, soybeans facing pressure… Corn futures saw a mix of followthrough selling and corrective buying overnight, with the latter currently helping the market to trade around a penny higher. Soybean futures are 5 to 8 cents lower, with traders continuing to book some profits after yesterday’s early rally to a 2.5-week high. Nearby winter wheat futures are mostly up 1 to 2 cents. Spring wheat futures are 4 to 6 cents higher. The U.S. dollar index is just above unchanged. Crude oil futures are posting moderate gains.
Day 2 Crop Tour results for Nebraska and Indiana… Scouts on Day 2 of the Pro Farmer Crop Tour measured average corn yield potential of 182.6 bu. per acre for Nebraska, which compares to 175.2 bu. per acre last year for the state and 175.6 bu. per acre for the three-year average. Soybean pod counts in a 3’x3’ square averaged 1,226 for Nebraska, which compares to 1,298 pods last year on tour and 1,269 pods for the three-year average.
Indiana samples resulted in an average corn yield of 193.5 bu. per acre, well above 179.8 bu. per acre last year and 174.5 bu. for the three-year average. Pod counts in a 3’x3’ square averaged 1,240 for Indiana, which compares to 1,281 pods last year on Tour and 1,172 pods for the three-year average. Find more perspective from Tour leaders in their “From the Rows” columns.
Today, scouts on the eastern leg of the Tour travel from Bloomington, Illinois to Iowa City. Scouts on the western leg will travel from Nebraska City to Spencer, Iowa. Tonight, we will release official Tour results for Illinois as well as the district results for western Iowa.
Rain still in the forecast for the Northern Plains, Canada’s Prairies… World Weather Inc. continues to expect “significant” rainfall over the next seven days for the Northern Plains and Canada’s Prairies, with the weather watcher saying the greatest rain will come Thursday through Friday. The Upper Midwest could also catch some rain. This would boost topsoil moisture and reduce stress for late-season crops like corn and soybeans. The moisture comes much too late for crops like spring wheat, canola or barley.
China’s YTD grain imports up sharply from 2020… China imported 2.86 MMT of corn during July, a 214% surge from year-ago, Chinese customs data released today shows. That pushes the country’s year-to-date (YTD) purchases to 18.16 MMT, an impressive 298% gain compared to last year at this time. China’s barley imports shot 87% higher compared with last year in July to 770,000 MT, with its YTD imports of 6.42 MMT up an impressive 125% from 2020 at this point. The country’s imports of sorghum also climbed a dramatic 114% from year-ago during July to 1.11 MMT, with year-to-date imports of 5.9 MMT up 157% from last year at this time. China’s imports of wheat edged 5% lower during July to 880,000 MT, but its YTD imports of 6.25 MMT are 46% ahead of the 2020 season at this point. Customs also reports China imported 350,000 MT of pork last month, a 19% retreat from July 2020. But seven months into the year, China has brought in 2.66 MMT of pork, up 3.9% from last year at this point.
Anec raises Brazilian soybean and corn export forecasts for August… The grain export association ANEC now expects Brazil to export 6.25 MMT of soybeans this month, which is nearly a 160,000-MT increase from its forecast last week. The association expects corn exports to hit 4.53 MMT in August, a 540,000-MT increase from its outlook last week.
Around 37% of Argentina’s bean crop has yet to be sold… So far this season, Argentina’s ag ministry reports producers have sold 27.3 MMT (63%) of their 2020-21 bean crop that the Buenos Aires Grains Exchange puts at 43.5 MMT. Last year at this time, produces had sold 29.4 MMT (60%) of their 49 MMT crop, the ministry details. Corn sales have been more robust in 2020-21, with producers selling 37.2 MMT (78%) of their expected 48-MMT crop. Corn sales are running about 3 MMT ahead of last season at this point.
APK-Inform expects Ukraine’s grain exports to surge 25% in 2021-22… Ukraine will likely export 57 MMT of grain in 2021-22, a 25.3% (11.5-MMT) jump from last year on a rise in production, forecasts the analyst APK Inform. It expects that tally to include 31 MMT of corn, 21.1 MMT of wheat and 4.4 MMT of barley. The firm projects the 2021 grain crop could hit 76.97 MMT, including 37.76 MMT of corn, 28.79 MMT of wheat and 8.34 MMT of barley.
Ukraine pushing for more access to Algeria’s wheat market… Ukraine’s grain traders union UGA is pushing Algerian grain authorities to ease the terms of its wheat tenders. Specifically, it wants Algeria to relax requirements related to the “W” index, and indicator of flour strength, as well as the indicator for insect-damaged kernels. As the limits currently stand, the Black Sea region cannot meet the tender requirements for wheat imports, UGA said in a press statement. Algeria has “expressed readiness to discuss possible changes to the tender procedures,” UGA reports. In the 2020-21 marketing year, Ukraine shipped just 200,000 MT of wheat to Algeria, representing just 1.2% of its total exports.
FOMC minutes due to with focus on tapering discussion… Minutes of the July 27-28 Federal Open Market Committee (FOMC) meeting will be released at 1 p.m. CT today and will be scoured for the discussion on tapering of the Fed’s bond purchases that have been taking place at $120 billion per month. The Fed’s stance following the meeting was that no final decisions had been made and that the discussion would continue at future meetings. Given comments from Fed officials since the July meeting, most expect a tapering effort that will start either in late 2021 or early 2022. The pace of the tapering will be key as there have been varying views from Fed officials on how aggressive the Fed needs to be in winding down the purchases. The Delta Covid variant will no doubt get mention in the meeting recap as Fed Chairman Jerome Powell addressed that in his post-meeting presser, noting uncertainty about its potential impact on the U.S. economy, something which he has continued to note.
Attention is already shifting to Powell’s remarks at the Jackson Hole confab Aug. 26-28… While Powell and other Fed officials may offer some additional perspective on the monetary policy outlook, it seems unlikely that a definitive announcement on something like the timing and degree of tapering the Fed’s bond purchase program would be offered at that session ahead of the Sept. 21-22 FOMC meeting. However, it has served as a forum for Fed officials to provide additional information or perspective on Fed policy.
Reuters/Ipsos poll: Biden’s approval drops sharply in wake of events In Afghanistan… Reuters reports President Joe Biden’s approval rating dropped by 7 percentage points and hit its lowest level so far following the events in Afghanistan. The Reuters/Ipsos poll, conducted on Monday, found that 46% of American adults approved of Biden’s performance, down from 53% in a similar poll on Friday. A separate Ipsos snap poll, also conducted on Monday, found that fewer than half of Americans liked the way Biden has steered the U.S. military and diplomatic effort in Afghanistan this year. Biden was rated worse than the other three presidents who presided over the United States’ longest war.”
Boxed beef prices nearing its June high… Risk off trade weighed on a number of commodity futures on Tuesday, and the cattle complex was not immune to the pressure. Boxed beef prices continue to climb, with the Choice surging another $8.26 to $338.06, within striking distance of the early June peak at $340.56. Movement also improved to 122 loads. But product market strength has not lifted cash prospects and weight data signals feedlot marketings are not overly current, diminishing their bargaining power. So far, there has been some light trade in Iowa and Nebraska at $127, up slightly from last week’s trade that ranged from $121 to $126.
Pork movement improves… Lean hog futures posted modest losses on Tuesday, with traders booking some profits after recent strong gains. The pork cutout value fell $1.23 on Tuesday, but movement picked up notably to a solid 406.95 loads. The national average cash hog bids climbed $2.64 yesterday. This week’s kill is running 27,000 head ahead of last week but 11,000 head under year-ago.
Overnight demand news… Algeria’s state grains agency reportedly bought between 230,000 MT and 250,000 MT of milling wheat in an international tender on Tuesday, with Germany, Poland and the Baltic states are expected to be the main suppliers. Egypt tendered to buy an unspecified amount of wheat from global suppliers; Romania is thought to have the lowest offer. Japan’s ag ministry received no offers in its simultaneous buy and sell auction in which it was seeking 80,000 MT of feed wheat and 100,000 MT of feed barley. The country is also seeking to buy a total of 143,765 MT of food-quality wheat from the U.S., Canada and Australia. Bangladesh reportedly had no offers in its tender to buy 50,000 MT of wheat. Jordan is thought to have three participants in its international tender to buy 120,000 MT of wheat.
Today’s reports
- 6:00 a.m. Pro Farmer Crop Tour — Pro Farmer
- 9:30 a.m. Weekly Ethanol Production — EIA
- 1:00 p.m. FOMC Minutes — Federal Reserve
- 2:00 p.m. Livestock, Dairy, and Poultry Outlook: August 2021 — ERS
- 2:00 p.m. Sugar and Sweeteners Outlook: August 2021 — ERS
- 2:00 p.m. Broiler Hatchery — NASS
- 2:00 p.m. CE: Hogs — NASS
- 2:00 p.m. Broiler Hatchery — NASS