Good morning!
Corn and soybeans paring overnight losses… Corn futures are steady to a penny lower to start the day, with soybeans mostly 2 to 3 cents lower. SRW wheat futures have fallen 8 cents, while HRW wheat is around a nickel lower. Spring wheat futures are narrowly mixed. The U.S. dollar index and crude oil futures are both posting slight gains.
Another round of rain for dry areas of the Midwest… Rain stretched from central Minnesota to southeast Iowa and across to Michigan yesterday, with accumulation ranging from 0.1” to 1.8”, according to precipitation maps released by World Weather Inc. Moisture over the past week will help stabilize crops in dry areas of the western Belt and it should help crops in the eastern Corn Belt fill out pods and finish strong. The market is also keeping an eye on a tropical storm in the western Gulf of Mexico that could make landfall in Texas or Louisiana early next week.
Anec raises its August corn export forecast for Brazil, cuts bean forecast… Brazil will likely export 5.986 MMT of soybeans this month, forecast the grain exporters’ association Anec. That’s a 263,000-MT decline from its forecast last week. On the other hand, the association raised its corn export forecast by 210,000 MT to 4.737 MMT.
Weather clips German wheat crop… Germany’s all wheat crop will likely total 21.37 MMT this year, a 3.6% drop from the year prior due to some adverse weather, according to the country’s ag ministry. A cold spring was followed by a hot, dry stretch early this summer. Then rains and storms disrupted harvest, raising concerns about the quality of the crop. The ministry says it’s too early to make detailed judgements about wheat quality, but early indications show protein content little changed from last year but lower test weights. The ag ministry also forecast this year’s rapeseed crop will likely edge 0.2% higher to 3.52 MMT, with that crop also clipped by poor weather. Germany is the European Union’s second largest wheat producer and often the bloc’s biggest producer of rapeseed.
Record-setting Romanian wheat crop this season… Romania brought in a record 11.4 MMT wheat crop this season, a dramatic improvement from last year’s 6.4-MMT crop, reports the country’s ag ministry. Yields recovered as drought eased. Romania is one of the EU’s bigger exporters of grain, with much of its wheat heading to Middle Eastern countries like Egypt. Romania could have an exportable surplus of around 7 MMT this year.
Corteva launched new GM soybean product in Brazil, just ahead of planting season… Corteva Inc. has launched its new Conkesta soybean seed in Brazil as part of its Enlist weed control package. This comes after the EU approved the genetically modified soybean seed. The Conkesta seed resists the same three weed killers as the Enlist E3 soy seed that was also recently launched in Brazil, as well as some types of caterpillars. This will up competition for Bayer’s Intacta RR2 Pro in the region.
House approves budget resolution… This paves the way for $3.5-trillion social spending package. The action came after a pressure campaign by Democratic leaders that included calls to lawmakers by the president and his top aides. Ten moderate Democrats had threatened to block the vote unless the House first passed a separate bipartisan Senate infrastructure deal. The deal used an obscure procedural tool and set a Sept. 27 deadline for passing the approximately $1-trillion physical infrastructure bill. The tool, called a “deem and pass,” allowed Democrats to approve the budget resolution without holding a separate vote on it. They approved the rules governing debate of an unrelated voting rights bill, which included language declaring that the budget had passed. Passing the budget resolution allows the committees to begin writing their sections of the $3.5-trillion reconciliation bill. The Senate intends to pass the spending bill using the reconciliation process, which allows certain budget-related legislation to be approved with 51 votes. Democrats have given committees a soft Sept. 15 deadline to complete the details of the spending bill, expected to include funding for climate change and an expansion of child-care assistance, paid family leave and Medicare. They hope to pass that measure in the House by Oct. 1, but the process could take longer in the Senate.
Biden said he planned to stick to his Aug. 31 deadline for military withdrawal… But President Joe Biden added he was willing to adjust “should that become necessary.” The decision flies in the face of efforts by U.S. lawmakers from both parties and foreign allies, who have pressed the White House to extend the deadline. With an estimated 10,000 to 15,000 Americans left, plus thousands of Afghans and other foreign nationals waiting to get out, many are betting the U.S. will have to stick around in some way after Aug. 31. Still, the Taliban controls the area around Kabul’s airport, as the U.S. removes its final 5,800 troops — and shrinks the security perimeter they’ve been providing. The Taliban said they would no longer allow Afghan citizens to reach the airport.
Ships have resumed berthing operations at a halted container terminal in Ningbo, China… This adds to optimism that full activity at one of the world’s busiest ports will be restored shortly after a two-week shutdown to quarantine dockworkers. At least five container ships have left the Meishan terminal at Ningbo in the past few days after berthing there, according to shipping data compiled by Bloomberg. However, severe cargo backlogs are developing at Shanghai’s Pudong airport since a coronavirus outbreak triggered flight diversions, according to the South China Morning Post. Nearly 6% of the world’s dry-bulk fleet is idled at anchor off China’s coast because of severe port congestion.
Labor shortages slowing the supply chain, distributors are struggling to get food to stores on time… Some of the largest U.S. food distributors are reporting difficulties in fulfilling orders as a lack of workers weighs on the supply chain, Bloomberg News reported. Sysco Corp., North America’s largest wholesale food distributor, is turning away customers in some areas where demand is exceeding capacity. The Houston company also said prices for key goods such as chicken, pork and paper products for takeout packaging are climbing amid tight supplies. In particular, production has slowed for high-demand, labor-intensive cuts such as bacon, ribs, wings and tenders, Sysco said.
OMB finishes review of USDA pre-rule on labeling meat, poultry made from cell culture technology… The Office of Management and Budget (OMB) has completed its review of a pre-rule from USDA’s Food Safety and Inspection Service (FSIS) it received June 7 for an advanced notice of public rulemaking (ANPRM) covering labeling of meat and poultry products made using animal cell culture technology. The plan aimed at gathering public input on the topic. Meat and poultry products are required to be labeled under the Federal Meat Inspection Act and the Poultry Products Inspection Act. It is not clear when FSIS will finalize their plans. But the final plan from USDA, whenever it emerges, will be an important one for the meat and poultry industry.
Chinese pork prices edged down last week… The average pork price across 16 provincial levels regions tracked by China’s ag ministry stood at 20.21 yuan ($3.10) per kilogram Aug. 16-20. That was a 2.6% dip from the week prior and a dramatic 57.6% under year-ago levels. Chinese supplies of pork have stabilized this year as herds rebuilt from African swine fever and consumer demand for pork faded.
Tyson offers $10,000 vaccine carrot… Employees at nearly 50 Tyson chicken plants can win $10,000, once a week for the next five weeks, if they’ve received at least one dose of Covid vaccine, Worth Sparkman of Axios Northwest Arkansas writes from an internal flyer posted on Facebook. Tyson, America’s biggest meatpacker, employs 139,000 people, most of them in the U.S., with about 24,000 in Arkansas. Only employees at the company’s chicken plants are eligible for the $10,000 giveaway. Tyson’s prepared foods, beef and pork plants are offering other monetary incentives.
Month-plus streak of beef gains comes to an end… Live cattle futures poked to new contract highs yesterday before settling low-range. Some of the late pressure may stem from ideas a beef market top is near, with Labor Day buying largely complete. On Tuesday, Choice boxed beef slipped 45 cents while Select values dropped $2.50—the first decline for boxed beef values in over a month. Today, the online Fed Cattle Exchange auction could provide additional cash market insights. Last week, sales took place at a weighted average price of $121.44 for heifers and $121.75 for steers. So far, there has just been some light action at $130 in the Iowa market, up $3 from action the week prior for the state. Feeder steers traded at steady to $3 higher prices at Day 2 of an Oklahoma City feeder cattle auction yesterday.
Futures’ discount to cash hog index overdone…The CME lean hog index is projected down to $107.38, but that’s still well above cash market. October lean hog futures settled at $86.975 yesterday, more than $20 under the index. The discount seems overdone. Cash hog bids surged an average of $4.14 nationally on Tuesday. USDA estimates this week’s kill at 911,000 head through Tuesday, 38,000 head lighter than the same period last week and 42,000 head shy of year-ago. Average hog weights in the Iowa/southern Minnesota/South Dakota market fell 0.7 lbs. the week ending Aug. 21, with weights now 2.1 lbs. under year-ago levels. The pork cutout value fell $2.25 on Tuesday, with bellies dropping $14.88. Movement picked up to 397.20 loads.
Overnight demand news… Importers in the Philippines tendered to buy 168,000 MT of animal feed wheat. Morocco received no offers in its tender to buy around 363,000 MT of durum wheat from the U.S. as part of a reduced tariff import quota tender. The Taiwan Flour Millers’ association issued an international tender to buy 48,875 MT of grade 1 milling wheat from the U.S. Tunisia tendered to buy 100,000 MT of soft wheat and 100,000 MT of animal feed barley from optional origins. Five trading companies are taking part in Jordan’s tender to buy 120,000 MT of wheat.
Today’s reports
- 9:30 a.m. Weekly Ethanol Production — EIA
- 8:00 a.m. Food Price Outlook — ERS
- 2:00 p.m. U.S. and Canadian Cattle — NASS
- 2:00 p.m. U.S. and Canadian Hogs — NASS
- 2:00 p.m. Broiler Hatchery — NASS