Good morning!
Corn and soybeans rebound, wheat quiet overnight… Corn and soybeans rebounded from yesterday’s weakness most of the overnight session while wheat futures pivoted near unchanged. As of 6:30 a.m. CT, corn futures are 1 to 2 cents higher, soybeans are a nickel to 7 cents higher and wheat is a penny lower to 4 cents higher. Crude oil futures are trading near unchanged while the dollar index is over 100 points higher.
Day 2 Crop Tour results for Nebraska and Indiana… Scouts on day 2 of the Pro Farmer Crop Tour found an average corn yield of 173.25 bu. per acre in Nebraska, up from 167.22 bu. per acre last year and the three-year average of 169.37 bu. per acre. Soybean pod counts in a 3’x3’ square came in at 1,172.48 for Nebraska, up from last year at 1,060.02 and the three-year average of 1,150.06.
In Indiana, samples yielded an average corn yield of 187.54 bu. per acre, up from 180.89 bu. per acre last year and the three-year average of 184.07 bu. per acre. Soybean pod counts in a 3’x3’ square totaled 1,409.02 for Indiana, up from 1,309.96 last year and the three-year average of 1,238.55.
On Day 3 of the Crop Tour, scouts on the western leg will sample fields in western Iowa, while scouts on the eastern leg will sample western Illinois and eastern Iowa.
BLS expected to make significant revisions to jobs data… New employment estimates due Wednesday from the Bureau of Labor Statistics (BLS) are expected to show a significant downward revision in job growth, potentially reducing net payroll gains by up to 500,000 for the 12 months ending in March 2024, according to Bloomberg. The estimates for downward revisions encompass a wide range, from JPMorgan’s expectation the BLS will revise down net payroll gains by 360,000 to Goldman Sachs’ estimate of one million. Even at 500,000, this would be the largest revision since 2019 and could reignite concerns about a weakening labor market, especially following a recent rise in unemployment to 4.3%. The anticipated revisions may influence the Federal Reserve’s decision on the depth of upcoming interest rate cuts, with Fed Chair Jerome Powell likely to address these concerns in his upcoming speech on Friday.
Court overturns STB rule for faster resolution of rate disputes… A federal appeals court vacated the Surface Transportation Board’s (STB) Final Offer Rate Review (FORR) rule, which aimed to expedite rate dispute resolutions between shippers and railroads. The rule allowed the STB to choose between final offers from both parties without a lengthy independent analysis. The decision is a setback for shippers who saw the rule as a cost-effective solution, but railroads argued it lacked congressional authorization and conflicted with legal requirements for a full hearing. The ruling highlights ongoing tensions between shippers and railroads over regulatory methods for handling rate disputes. The agricultural sector, which depends heavily on rail for transporting commodities like grain and livestock feed, may face increased costs and logistical challenges due to the court’s ruling that vacated the STB’s expedited rate dispute resolution rule.
Mainstream media clearly favors Harris… Recent studies by the Media Research Center (MRC) have highlighted a significant disparity in media coverage between Vice President Kamala Harris and former President Donald Trump. According to these studies, Harris has received overwhelmingly positive media attention, with 84% of her coverage being positive, while Trump has faced predominantly negative media coverage, with 89% of it being negative.
RFK Jr. considering dropping out to ‘join forces’ with Trump... Independent presidential candidate Robert F. Kennedy Jr. is considering dropping out of the 2024 race to “join forces” with former President Donald Trump, his running mate revealed Tuesday. “There’s two options that we’re looking at, and one is staying in, forming that new party, but we run the risk of a Kamala Harris and [Tim] Waltz presidency because we draw votes from Trump,” Nicole Shanahan, the independent candidate’s vice-presidential pick, said during an appearance on the Impact Theory with Tom Bilyeu podcast. “We walk away right now and join forces with Donald Trump … and we explain to our base why we’re making this decision,” Shanahan said.
China investigating E.U. dairy imports… China initiated an anti-subsidy investigation into dairy imports from the European Union, escalating trade tensions between the two economic giants. The probe, announced by China’s Ministry of Commerce, will scrutinize several dairy products, including fresh and processed cheese, and will review 20 EU subsidy programs, particularly those under the Common Agricultural Policy and specific to Italy and Finland’s dairy sectors. This move is seen as a response to the European Union’s recent decision to expand tariffs on Chinese-made electric vehicles (EVs) and impose tariffs on Tesla Inc. cars produced in China.
Investors pouring into U.S. money market funds… In the first half of August 2024, U.S. money market funds experienced significant net inflows, with nearly $90 billion being invested. This surge in investment is largely attributed to institutional investors seeking to capitalize on attractive yields that are anticipated to persist even if the Federal Reserve decides to cut interest rates soon. Money market funds are popular among investors because they offer a relatively safe and liquid investment option, typically providing higher yields than traditional savings accounts. The inflow of $88.2 billion from Aug. 1 to Aug. 15 marks the highest for the first half of any month since November of the previous year.
Canadian railways likely to go on strike tonight… A shutdown of a swath of Canada’s freight rail network could begin shortly after midnight tonight. Maersk Line withdrew an earlier statement that was restricting cargoes, and says it is continuing to accept shipments. ITS Logistics says some Canada-bound ocean cargo is already diverting to U.S. West Coast ports. ITS executive Paul Brashier says rail shippers may seek truck transport, which could “drive rates through the roof overnight,” if they can find over-the-road capacity.
Wholesale beef prices continue to falter… Choice cutout fell another 47 cents to $315.08 while Select sunk 97 cents to $301.04. Given the steep drop in futures, the cash market held up fairly well Tuesday. Attention is on Friday’s Cattle on Feed Report, which will likely push cash cattle trade late into the week.
Hog index resumes lower… After modest strength last week, the CME lean hog index has turned lower and is down another 24 cents to $89.71 as of August 19. October futures remain well below the cash index, which could spark some corrective buying, especially if the wholesale pork market continues to stabilize. Pork cutout was up 45 cents to $97.54 Tuesday.
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
· 9:30 a.m. Weekly Ethanol Production — EIA
· 11:00 a.m. Rice Stocks — NASS
· 2:00 p.m. Broiler Hatchery — NASS
· 2:00 p.m. Milk Production — NASS
· 2:00 p.m. Mushrooms — NASS