Good morning!
Pressure overnight… Corn futures are down 5 to 6 cents in early trade and soybeans are 14 to 17 cents lower, with both markets hitting new lows for the week. Winter wheat futures have tumbled 8 to 11 cents. Spring wheat futures are down 3 to 4 cents. The U.S. dollar index has climbed to its highest level since early November. Crude oil futures are facing heavy pressure and at three-month lows.
Day 3 results… On Day 3 of the Pro Farmer Crop Tour, scouts measured an average corn yield potential of 196.30 bu. per acre for Illinois, up from 189.4 bu. last year on Tour and 184.4 bu. for the three-year average. Pod counts in a 3’x3’ square came in at 1,280 pods for the state, also up notably from 1,247 pods in 2020 and 1,186 pods for the three-year average.
We also released the results for the western-most three districts of Iowa last night. Corn yields and soybean pod counts were up from last year’s derecho-hit crop. Compared with the three-year average, corn yield potential was marginally lower in District 1 but up from year-ago in Districts 4 and 7. Soybean pod counts were up from the three-year average across all three districts.
The full results for Iowa will be released tonight. Minnesota results will also be released this evening. Our Pro Farmer production and yield estimates (informed by Tour data, but separate) will be released at 1:30 p.m. CT on Friday.
Much anticipated rains expected to move into Northern Plains today, Canada records first frost… Some areas of the eastern Belt received some rain over the past 18 hours, but the central and western Corn Belt remained dry. But “significant” rains are expected for the Northern Plains today and Friday, with some followup precipitation likely late Saturday into Sunday, reports world Weather Inc. Rains are expected to stretch into the dry northwest Corn Belt. Also of note, western Canada’s Prairies recorded their first frost and freezes on Wednesday, but impact on crops should be limited and no frost is expected outside of Canada. Cool temps are expected to linger into next week.
Expectations for today’s Weekly Export Sales Report… The report is for the week ending Aug. 12.
| 2020-21 (MT) | 2021-22 (MT) |
Corn | -100,000-200,000 | 300,000-930,000 |
Soybeans | -75,000-200,000 | 1,000,000-1,800,000 |
Wheat | NA | 250,000-500,000 |
Soymeal | 25,000-200,000 | 50,000-250,000 |
Soyoil | 0-10,000 | 0 |
EPA bans use of the pesticide chlorpyrifos on food crops… The U.S. Environmental Protection Agency announced it will ban use of the pesticide chlorpyrifos on food crops. The announcement follows a court order earlier this year that gave the agency limited time to either find uses for the pesticide that are safe or outlaw it. The chemical has been linked to lower IQ, impaired working memory and negative impacts on motor development in children. “EPA is taking an overdue step to protect public health,” said EPA Administrator Michael Regan. “Ending the use of chlorpyrifos on food will help to ensure children, farmworkers, and all people are protected from the potentially dangerous consequences of this pesticide. Corteva Inc., the world’s largest manufacturer of the chemical, announced last year it would stop producing chlorpyrifos because of a decline in sales.
Biden: U.S. troops will remain in Afghanistan until all Americans are evacuated... President Joe Biden said U.S. troops will stay in Afghanistan until all Americans are evacuated out of the country, even if they must remain past the Aug. 31 deadline previously set. Biden told ABC News that 10,000 to 15,000 Americans need to be evacuated and that there are around 50,000 to 65,000 Afghans and their families that the U.S. wants to get out of the country. Meanwhile, the International Monetary Fund said that the new government in Afghanistan is cut off from using the fund’s reserve assets and other resources days before the nation is set to receive almost $500 million. The U.S. froze nearly $9.5 billion of Afghanistan’s reserves after the Taliban seized power. The insurgent group now faces a cash crunch and currency pressures, but others note that the Taliban has “other ways” to tap some financial resources, mostly via illicit drug trading.
U.S. construction of new homes tumbled in July… Builders are running up against rising material costs, trouble attracting enough workers and difficulty securing a sufficient number of lots. Housing starts fell 7% in July compared with June, to a seasonally adjusted annual rate of 1.534 million. Low interest rates, a desire for more space and millennials aging into prime homeownership years have spurred demand coming out of the pandemic, but builders haven’t been able to keep up. That’s led to low inventories of homes for sale and rising prices.
Fed Chairman Powell’s reappointment threatened by far-left Democrats... If the Fed’s management of the economy were all that mattered, Chairman Jerome Powell would probably be cruising toward reappointment. But the Fed is also a financial regulator, and Powell’s shot at another term when this one expires in February is now threatened by progressive Democrats whose priority is a more activist Fed on regulation and other nonmonetary matters, the Wall Street Journal reports. “In some ways, though, progressive criticism of Powell’s record on regulation rings hollow: Despite the pandemic’s unprecedented economic shock, no major bank failed, none needed bailouts, and they vastly expanded lending to businesses,” the WSJ item notes.
Dairy aid announcements expected today… USDA Secretary Tom Vilsack will be in Vermont today with Senator Pat Leahy (D-Vt.) and is expected to make dairy aid announcements. Expectations are that dairy aid will be announced by Vilsack, including aid that was a part of the December Covid aid package. USDA initially announced broad outlines of the assistance in March and then June 15 said that for dairy, it would include $400 million for the Dairy Donation Program (DDP), additional pandemic payments targeted to dairy farmers suffering losses not covered by prior pandemic assistance and around $580 million in supplemental Dairy Margin Coverage (DMC) payments that would be targeted to small and medium-sized farms. Some reports are signaling a smaller level for the additional payments.
Philippines reports ASF cases are waning… Active cases of African swine fever are declining and are confined to just 22 (0.7%) of the nearly 3,000 villages that have recorded outbreaks since 2019, the country’s ag ministry said. It added that the drop in infections and the government-funded hog repopulation program puts the Philippines on track to produce a domestic surplus by 2023.
Restaurants warn labor shortages may hike burger prices… Burger King parent Restaurant Brands expects beef costs to rise as the labor shortage crimps staffing at meatpacking plants, Bloomberg News reports. Restaurant Brands International Inc., which owns the Tim Hortons chain as well, also sees higher costs for key ingredients including pork that it uses for sausage and bacon, the company said in a July report that was viewed by Bloomberg News. According to the document, stimulus checks in the U.S. are reducing incentives for meatpacking workers to show up.
Soaring beef prices push packer profit margins near $1,000 a head… Packer profit margins are nearing an eye-popping $1,000 a head. HedgersEdge.com yesterday estimated they stand at $987.25 a head, with gains in the wholesale product market driving the gains. Choice boxed beef values climbed another $2.02 (Choice) to $3.03 (Select) on Wednesday. Choice beef now stands at $340.08 per cwt., 48 cents away from the June peak. But market-ready supplies remain sufficient, and packers have been in no hurry to share the wealth. Iowa and Nebraska have seen some cash cattle action from $126 to $127, steady to up slightly from the week prior. Kansas and Texas have seen some light trade from $121 to $123, steady with last week.
Pork prices slightly higher for the week… Average hog weights in the Iowa/southern Minnesota market dipped 0.8 lbs. the week ending Aug. 14 to 277.6 lbs., which is still 1.7 lbs. lighter than last year at this point. The pork cutout value climbed $2.49 yesterday and movement was solid at 349.41 loads. Hams drove the increase, rising $12.69. Cash hog bids fell 81 cents for the national average yesterday. Strength in lean hogs yesterday may have been partially driven by concerns an African swine fever outbreak at a large commercial operation in Bulgaria might foreshadow a European ASF outbreak.
Overnight demand news… Egypt’s state grain buyer purchased 120,000 MT of wheat from Romania and 60,000 MT of wheat from Ukraine in a tender yesterday. The Korea Feed Association bought an estimated 65,000 MT of animal feed corn in a private deal, likely from South America or South Africa. Jordan’s state grain buyer issued a tender to buy 120,000 MT of milling wheat from optional origins. Japan purchased nearly 63,000 MT of food-quality wheat from the United States, as well as 29,340 MT from Canada and 51,445 MT from Australia.
Today’s reports
- 6:00 a.m. Pro Farmer Crop Tour — Pro Farmer
- 7:30 a.m. Extended Weather Outlook — NWS
- 7:30 a.m. Weekly Export Sales — FAS
- 2:00 p.m. Livestock Slaughter — NASS
- 2:00 p.m. Milk Production — NASS