Good morning!
Soybeans firmer, corn and wheat mixed overnight... Soybeans posted correct gains overnight following last week’s decline as traders watched prospects for additional Midwest rain. Corn and wheat traded narrowly mixed. As of 6:30 a.m. CT, corn futures were trading 1 cent lower to 2 cents higher, soybeans were 7 to 9 cents higher and wheat was 4 cents lower to 3 cents higher. Front-month crude oil futures were up slightly and the U.S. dollar index was about 200 points higher.
Pro Farmer Crop Tour begins today… Scouts will be sampling corn and soybean fields across the seven Crop Tour states over the next four days. Follow along with updates on our website and by searching #pftour22 on Twitter. Scouts on the eastern leg of the tour are making their way today from Dublin, Ohio to Noblesville, Indiana. Those on the western leg are scouting fields between Sioux Falls, South Dakota and Grand Island, Nebraska. Look for preliminary route reports from Tour leaders in “Evening Report” and on our website. We’ll release the Tour results for Ohio and South Dakota and stream the nightly results on our site tonight. The Pro Farmer corn and soybean crop estimates will be released Friday at 1:30 p.m. CT. Our “Crops Analysis” and Livestock Analysis” reports will be replaced with “After the Bell” this week.
Cold Storage Report out this afternoon... USDA will detail frozen meat stocks at the end of July after today’s market close. The five-year average is a 22.2-million-lb. increase in beef stocks and a 4.2-million-lb. drop in pork stocks during the month.
Rains ranging from 0.3 inch to over 2 inches fell over eastern and northwest Iowa, most of Illinois and southern Wisconsin, as well as Indiana and Ohio over the weekend, according to World Weather Inc. “A favorable mix of rain and sunshine is expected in many U.S. key crop areas this week and next week, although there may be some pockets of net drying,” the forecaster said. “Temperatures will be mild enough to reduce evaporation rates.”
Ukraine grain shipment count grows… Some 27 ships loaded with grain have left Ukraine’s Black Sea ports since August 1 under an export deal brokered by the U.N. and Turkey, which has laid “the groundwork for a permanent peace environment,” Turkey’s Defense Minister said in a speech on Saturday. Meanwhile, Ukraine is showing off wrecked Russian tanks in Kyiv for this year’s Independence Day celebrations. Russia appears to be amassing missiles in Belarus in preparation for an attack on Ukraine, according to an independent military intelligence group.
China lowers lending rate second time… China cut its mortgage lending rate for the second time this year as the country’s central bank seeks to limit the fallout from a property sector liquidity crisis. The five-year loan prime rate was lowered to 4.3% from 4.45% on Monday, exceeding the median forecast from economists polled by Bloomberg and equaling a rate cut in May that was the largest on record. The one-year Loan Prime Rate or LPR, which is also based on domestic Chinese lending rates and primarily used to price corporate loans, was cut to 3.65% from 3.7%. The larger-than-expected reduction to the benchmark mortgage rate helped bolster the Hang Seng Mainland Properties index in Hong Kong but did little to boost wider markets. The larger cut to the five-year rate vs the one-year rate suggests Chinese officials via commercial banks are aiming to signal their support for China’s ailing real-estate market.
Beef is getting cheaper, bringing some economic relief to U.S. consumers… Prices of beef, typically among the costliest grocery store purchases, are falling after more than a year of increases, as consumer demand softens for some cuts. Supplies are improving due to better staffing at meat plants, and supermarkets are offering more discounts on rib-eye, New York strip and other often-expensive products, according to the WSJ. Retail beef prices fell 0.7% for the four-week period ended Aug. 7, compared with the same period a year ago, according to data from research firm Information Resources Inc. That decline came after beef prices fell 1% during the prior four-week period, which was the first monthly decline since June 2021.
U.S. business economists skeptical over prospect for soft Fed landing... Numbers from the National Association of Business Economists show that three-quarters of respondents doubt the Federal Reserve can bring inflation down to its stated target of 2% without setting off a recession. Click here for details.
Droughts hurting the world’s largest economies... Severe droughts across the Northern Hemisphere — stretching from the farms of California to waterways in Europe and China — are further snarling supply chains and driving up the prices of food and energy, adding pressure to a global trade system already under stress, the Wall Street Journal reported. Parts of China are experiencing their longest sustained heat wave since record-keeping began in 1961, leading to manufacturing shutdowns owing to lack of hydropower. The drought affecting Spain, Portugal, France and Italy is on track to be the worst in 500 years. In the American West, a drought that began two decades ago now appears to be the worst in 1,200 years. For some of the world’s biggest economies, this summer’s droughts are hurting industries including electricity generation, agriculture, manufacturing and tourism. That is compounding existing strains such as supply-chain disruptions stemming from the Covid-19 pandemic.
Germany nuke plants won’t get extension... German Economy Minister Robert Habeck said on Sunday that Germany would not extend the lifespan of the country’s three remaining nuclear power plants to offset declining gas imports, saying the savings would be negligible. Habeck said he was open to keeping one Bavarian power plant online if stress tests showed it was necessary to maintain electrical grid stability.
Russia bombing prompts murder investigation… Russian authorities opened a murder investigation after the daughter of influential, ultra-nationalist philosopher Alexander Dugin was killed by a car bomb near Moscow. Ukrainian President Volodymyr Zelenskyy warned that “Russia may try to do something particularly nasty” ahead of the national holiday on Wednesday, which will be marked without the usual official celebrations to avoid creating potential targets. If the car bombing is tied to the war it would mark the first time since February that the violence unleashed on Ukraine has reached the Russian capital, touching the family of a Kremlin ally near one of Moscow’s most exclusive districts.
Biden administration warns New England governors of regional fuel shortage… The region’s oil and fuel stockpile is low, and the White House believes this could lead to disruptions during a treacherous New England winter. The Department of Energy sent letters to each of the six New England governors urging them to begin shoring up their oil supplies in advance of the coming winter and the peak of hurricane season. Stockpiling now, the Energy Department says, will prevent strain on the system during extreme weather. On the East Coast, gasoline inventories are at their lowest point in nearly a decade, Secretary of Energy Jennifer Granholm wrote in the letter, and in New England, the diesel supply is roughly 63% below the five-year average, she added. Should an extended winter storm pummel the East Coast, New England, which relies on home heating oil more than any other part of the country, could find its energy supply chain disrupted.
Energy Dept. checks in with oil majors… The Department of Energy also sent letters to seven major oil companies in the U.S., asking them to hold onto their stocks to help offset the shortage. Granholm has been meeting regularly with their top executives to coordinate efforts.
McDonald’s testing chicken Big Mac in U.S… Chicken Big Mac to be tested by McDonald’s after an upbeat U.K. trial. McDonald’s will be testing a chicken Big Mac in select Miami-area locations later this month, the company confirmed to USA Today. The menu item was first introduced in the United Kingdom earlier this year and met with much positive feedback, selling out less than two weeks. “We’re always looking to give our fans more ways to enjoy the classic menu items they know and love,” McDonald’s said in a statement. “Made with two crispy tempura chicken patties, our iconic Big Mac sauce, and topped off with pickles, shredded lettuce, and American cheese, this sandwich brings some of our fans’ favorite flavors together for the perfect bite.”
Weekend demand news... Exporters reported no tenders or sales.
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
- 10:00 a.m. Export Inspections — AMS
- 2:00 p.m. Chickens and Eggs — NASS
- 2:00 p.m. Cold Storage — NASS
- 2:00 p.m. Milk Production — NASS
- 3:00 p.m. Crop Progress — NASS