Good morning!
Grains mixed in overnight trade… Corn futures traded narrowly unchanged most of the night, soybeans favored the downside and wheat saw relative strength. As of 6:30 a.m. CT, corn futures are steady to a penny lower, soybeans are 8 to 9 cents lower and wheat is around a penny higher. Front-month crude oil futures are trading modestly higher this morning and the U.S. dollar index is nearly 300 points higher.
Day 3 Crop Tour results for Illinois and western Iowa… Scouts on day 3 of the Pro Farmer Crop Tour found an average corn yield of 204.14 bu. per acre in Illinois, up from 193.72 bu. per acre last year and the three-year average of 193.58 bu. per acre. Soybean pod counts in a 3’x3’ square averaged 1,419.11 for Illinois, up from 1,270.1 last year and the three-year average of 1,266.70.
In western Iowa, average corn yields for Districts 1, 4 and 7 were 176.59 bu., 195.86 bu. and 191.59 bu. per acre, respectively, compared to 182.58 bu., 168.71 bu. and 184.84 bu. per acre, respectively, in 2023. The three-year averages for Iowa Districts 1, 4 and 7 are 182.55 bu., 183.54 bu. and 183.67 bu. per acre, respectively.
Western Iowa pod counts for Districts 1, 4 and 7 averaged 1,108.76, 1,254.09 and 1,366.22, respectively, compared with 1,137.24, 1,120.30 and 1,170.28 in 2023. The three-year averages for Iowa Districts 1, 4 and 7 are 1,105.44, 1,201.49 and 1,253.91, respectively.
On Day 4 of the Crop Tour today, scouts will sample fields in eastern Iowa and southern Minnesota. The Tour concludes tonight in Rochester, Minnesota.
Weekly Export Sales Report out this morning… For the week ended Aug. 15, traders expect:
| 2023-24 expectations (in MT) | 2023-24 last week | 2024-25 expectations (in MT) | 2024-25 last week |
Corn | 100,000-250,000 | 120,500 | 500,000-1.025,000 | 800,500 |
Wheat | N/A | N/A | 250,000-500,000 | 339,900 |
Soybeans | 100,000-400,000 | 221,700 | 800,000-1,350,000 | 1,334,200 |
Canadian rail strike to disrupt trade… Canada’s two largest railways, which account for nearly 80% of the national network, shut down early Thursday after failing to reach an agreement with the Teamsters Canada Rail Conference. The shutdown, involving over 9,000 employees at Canadian National Railway Co. and Canadian Pacific Kansas City Ltd., immediately disrupted North American supply chains that handle about C$1 billion ($740 million) in trade daily. The stoppage is set to cripple shipments of grain, potash and coal while also slowing the transport of petroleum products, chemicals, and autos.
Halted wage negotiations could lead to U.S. dockworker strike… Labor issues in Canada are intensifying as they align with ongoing contract talks involving about 45,000 dockworkers at major U.S. ports from Houston to Boston. The International Longshoremen’s Association (ILA) halted wage negotiations earlier this summer and is preparing to strike if no agreement is reached before the contract expires on September 30. In response, some cargo has been diverted to U.S. West Coast ports, which are already experiencing near-record container volumes, reminiscent of the pandemic era. This situation could exacerbate existing supply chain challenges in North America.
Ford scraps some EV plans… Ford’s recent decision to scrap plans for a fully electric SUV and postpone a next-generation electric pickup highlights a significant shift in its electric vehicle (EV) strategy to focus on focusing on hybrids and affordability. The company is set to absorb a substantial financial impact, with estimated losses of around $1.9 billion. Additionally, Ford is reducing its capital expenditure on EVs, decreasing the proportion of its budget from 40% to 30%.
Fed officials ready to cut rates… The vast majority of Fed officials indicated it would likely be appropriate to cut interest rates at the next meeting in September if economic data unfolds as expected. Several officials observed that recent progress on inflation and increases in the unemployment rate provided a plausible case for reducing rates by 25 basis points at the July meeting or that they could have supported such a decision.
BLS facing renewed scrutiny over jobs data… The Bureau of Labor Statistics (BLS) is facing renewed scrutiny over its data release practices after a delay in posting crucial revisions of U.S. jobs data online allowed at least three Wall Street firms — Mizuho Financial Group Inc., BNP Paribas SA, and Nomura Holdings Inc. — to obtain the information before it was officially available to the public. The BLS missed its scheduled 10 a.m. ET release time by over 30 minutes, during which time these firms managed to call the agency and receive the data.
Walz accepts VP nomination… Minnesota Governor Tim Walz capped off the third night of the 2024 DNC by accepting the vice-presidential nomination. He delivered a personal speech highlighting his progressive policies and expressing admiration for Vice President Harris. Walz concluded by rallying the crowd to chant “When we fight, we win!” Walz’s speech touched on various themes that resonated with different segments of the audience, including personal freedom, reproductive rights, and gun ownership.
Trade tensions heightening between E.U. and China… We previously noted that China’s Ministry of Commerce (MofCom) initiated an anti-subsidy investigation into certain EU dairy products, focusing on whether specific subsidies in 13 EU countries and seven EU-wide schemes have unfairly distorted trade. The products under scrutiny include fresh and processed cheeses, as well as unsweetened, un-concentrated milk and cream with a fat content of 10% or higher. This investigation is part of a broader pattern of escalating trade tensions between China and the EU. The EU has been investigating Chinese companies, industries, and procurement processes, prompting China to respond with its own investigations.
Cash cattle trade picks up… Sharp selling pressure in futures persuaded packers to accept lower packer bids as cash trade picked up mid-week, with the average so far this week around $2.80 lower than a week ago. Stabilizing futures could encourage packers to have a “floor price” in place around this week’s average at $186.39. Beef cutout stabilized Wednesday, with Choice cutout firming 13 cents and Select climbing 4 cents.
Wholesale pork plunges… Demand remained solid for pork cutout Wednesday morning, though prices plunged in afternoon trade, dragging cutout $2.99 lower to $94.55. Picnics were the sole cut to firm on the day. The CME lean hog index sunk another 50 cents to $89.21, though that is still 83 cents above the July low.
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Today’s reports
· 7:30 a.m. Weekly Export Sales — FAS
· 2:00 p.m. Livestock Slaughter — NASS
· 2:00 p.m. Poultry Slaughter — NASS