Good morning!
Corn, soybeans and wheat lower… The grain and oilseed markets struggled to maintain Monday’s strength overnight, though selling pressure was limited. As of 6:30 a.m. CT, corn futures are steady to a penny lower, soybeans are 2 to 3 cents lower and winter wheat futures are around a penny lower. Outside markets are quiet this morning as front-month crude oil futures are modestly higher and the U.S. dollar index is around 50 points lower.
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 156.51 bu. per acre in South Dakota, down from 157.42 bu. per acre last year but up from the three-year average of 142.44 bu. per acre. Soybean pod counts in a 3’x3’ square came in at 1,025.89 for South Dakota, up from 1,013 last year and from the three-year average of 960.42
In Ohio, samples yielded an average corn yield of 183.29 bu. per acre, down from 183.94 bu. per acre in 2023 and up from the three-year average of 181.06 bu. per acre. Soybean pod counts in a 3’x3’ square totaled 1,229.92 for Ohio, down from 1,252.93 in 2023 but above the three-year average of 1,193.31.
Today, scouts on the eastern leg of the Tour will sample routes from Noblesville, Indiana to Bloomington, Illinois, and scouts on the western leg will sample central and southern Nebraska.
Cordonnier leaves corn, soy forecasts unchanged… Dr. Michael Cordonnier left his U.S. corn forecast unchanged at 183.5 bushels/acre with production of 15.17 billion bushels. He noted weather continues to be beneficial for grain filling though the next few weeks are likely to see soil moisture decline. Cordonnier left his bean yield estimate at 53.5 bushels/acre with production of 4.61 billion bushels. He has a neutral bias for both crops.
Corn, soybean and spring wheat CCI ratings inch down... USDA rated 67% of the corn crop as “good” to “excellent” and 11% “poor” to “very poor.” The soybean crop was rated 68% “good” to “excellent” and 8% “poor” to “very poor.” On the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop dropped 1.1 points to 372.5, while the soybean crop slipped 0.4 point to 367.4. USDA rated 73% of the spring wheat crop as “good” to “excellent” and 5% “poor” to “very poor.” On the CCI, spring wheat crop declined 1.7 points to 380.2. Click here for details.
Railways facing shutdown over strike… Canadian National Railway Co. and Canadian Pacific Kansas City Ltd. are facing a potential nationwide shutdown on Thursday if they cannot reach an agreement with their unionized workers, affecting over 9,000 employees. The impending strike threatens to disrupt the movement of essential goods like wheat, chemicals, and fertilizers, with industries bracing for billions in losses. The impact is expected to extend beyond the C$1 billion ($732 million) worth of daily goods transported by rail, affecting farmers, food security, and Canada’s global supply chain reputation. Canada is the world’s top potash producer and 75% of fertilizer moves by rail. Over 90% of Canadian grain moves by rail, so there could be a near-total stoppage of grain movement. The country is also a major wheat producer and if exports stop, providers could face demurrage fees, contract extension penalties or sales defaults. Talks continue, but the parties remain far apart on key issues, including crew fatigue and wage increases.
Biden gives keynote speech at DNC… President Biden was greeted with a lengthy standing ovation on the first night of the Democratic National Convention in Chicago, telling attendees, “I gave my best to you.” Biden celebrated Vice President Kamala Harris as the party’s presidential nominee, effectively passing the torch to her. Biden emphasized his pride in selecting Harris as his running mate in 2020, describing it as the best decision of his career. His speech was not only a farewell but also a call to action, urging attendees to support Harris and Tim Walz, her vice-presidential running mate. He reiterated his commitment to democracy and expressed his readiness to support the new ticket as a volunteer.
Iranian hackers target election… The U.S. government concluded that Iran was behind the hack-and-leak operation targeting both the Trump and Biden-Harris campaigns. The FBI’s briefing to Trump, coupled with the unsuccessful attempts against the Biden-Harris campaign, shows the seriousness with which U.S. intelligence and law enforcement agencies are treating these actions. The fact that news organizations received documents believed to be from a senior Trump campaign official’s account suggests that the hackers successfully obtained sensitive information, potentially aiming to disrupt or discredit campaigns.
Gold rises to record high… Gold futures rose to a record high this morning, driven higher by bets on easing monetary policy by major central banks. Heightening tensions in the Middle East and the ongoing war in Russia and Ukraine have underpinned precious metals as well.
China leaves key lending rates unchanged… The People’s Bank of China left key lending rates unchanged in their August meeting, matching forecasts. The bank unexpectedly cut rates in July in an effort to spur spending as woes over the Chinese economy escalate. The one-year loan prime rate (LPR), the benchmark for most corporate and household loans, was maintained at 3.45%. Meanwhile, the five-year rate, a reference for property mortgages, was retained at 3.85%. These rates are significant as the one-year LPR serves as the benchmark for most corporate and household loans, while the five-year LPR is a reference for property mortgages. This move comes after unexpected rate cuts in July, where both the one-year and five-year LPRs were reduced by 10 basis points to support China’s fragile economic recovery. Despite maintaining ultra-loose monetary policies, economic indicators such as lending activity and industrial production suggest ongoing economic weakness, potentially prompting further rate cuts in the future.
USDA announced results of CRP enrollments... USDA’s 2024 Conservation Reserve Program (CRP) accepted 2.2 million acres across various signups. This brings total CRP acreage close to the legislative cap of 27 million acres. The Grasslands CRP has now become the largest component of the program, with over 10 million acres enrolled. USDA is nearing its cap, meaning further enrollments might be limited. With 481,639 acres set to mature on Sept. 30, many are expected to re-enroll, leaving little room for new enrollments before hitting the cap. Future general and Grasslands CRP signups are unlikely.
Cash cattle fundamentals slip… Cash cattle prices are down for the third consecutive week, sinking $2.20 from the prior week to $189.14. Historically, cash prices tend to trade relatively sideways until some potential strength returns to cash cattle in October. Choice cutout dipped $1.90 to $315.55 and Select fell 55 cents to $302.01 on Monday.
Hog index continues to slip… After brief strength last week, the CME lean hog index has continued its seasonal trend lower and is down 14 cents to $89.95 as of Aug. 16. Pork cutout continues to fall under pressure, led lower by big losses in bellies. Cutout is down $1.58 to $97.09.
See ‘Policy Updates’ for late-breaking morning news updates... For updates to items in “First Thing Today” or any late-breaking morning news stories, check “Policy Updates” on www.profarmer.com.
Today’s reports
· 11:00 a.m. Fruit and Tree Nuts Data — ERS
· 11:00 a.m. Vegetables and Pulses Data — ERS