Good morning!
Mixed trading overnight… The hot weather seen this week has supported soybean futures, though corn still struggles to get a bid. As of 6:30 a.m. CT, corn futures are 1 to 2 cents lower, soybeans are 6 to 8 cents higher, SRW futures are 1 to 2 cents higher, HRW futures are about 5 cents higher and HRS futures are 4 to 7 cents higher. Front-month crude oil futures are about $1 higher at $80, while the U.S. dollar index is trading near unchanged at a two month high.
Day 4 Crop Tour results for Iowa and Minnesota… Scouts on day 4 of the Pro Farmer Crop Tour on Thursday calculated an average corn yield of 182.8 bu. per acre in Iowa, down from 183.81 bu. per acre last year and the three-year average of 184.13 bu. per acre. Soybean pod counts in a 3’x3’ square averaged 1,190.41 for Iowa, up from 1,174.43 last year and the three-year Tour average of 1,179.51.
For Minnesota, the Tour found an average corn yield of 181.34 bu. per acre, down from 190.39 bu. per acre last year and the three-year average of 187.63 bu. per acre. Soybean pod counts in a 3’x3’ square averaged 984.39 in Minnesota, down from last 1,100.75 year and the three-year average of 1,071.31.
Pro Farmer’s U.S. corn and soybean crop estimates will be released today at 1:30 p.m. CT.
Russia attacked by drone swarm and missile… Russia said it downed 42 drones and a missile fired by Ukraine in a single attack targeting unmanned vehicles. The attack occurred in Crimea, which Russia annexed from Ukraine in 2014. This ends the week of nearly daily retaliatory attacks on Russia, with one attack destroying a Russian bomber.
Senator John Boozman sees Farm Bill draft out before year end… In an interview with Washington Policy Analyst Jim Wiesemeyer, Boozman said an extension will likely be needed, but the Senate will have time before the end of the year and in January to make progress and an initial draft will likely hit the floor before the end of the year. The Senator states there is simply not enough time to get a bill finished before the end of the government’s fiscal year, which ends Sept 30. He reflects that both Democrats and Republicans have an interest in passing a farm bill to address the needs of rural America and ensure food security.
Senator Boozman discusses Farm Bill details as well… The Senator reinforced that reference prices remain an important topic, as well as updates to risk management tools such as crop insurance, Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs. He argues the current tools are based on outdated data and must reflect current economic conditions for farmers. The full interview can be found here.
Jackson Hole Symposium continues today… The meeting of the world’s central bankers is expected to bring volatility into the market as Fed Chair Powell is likely to outlay his beliefs and plans for inflation over the coming months. Former Fed Vice Chair Donald Kohn said that Powell is likely to caution against easing too soon and may give insight into what Powell means when he says “data dependence.” Powell is set to take the stage at 9:05 CT this morning, with Fed members lined up to speak all day.
China skeptical to give handouts to save flagging economy… China has made several pledges to revive the nation’s economy and improve the business environment as concerns about the world’s second largest economy arise. The Communist Party has largely been focused on encouraging more spending on things like consumer goods and cars, coaxing private companies to expand investment, making it easier for private companies to access funding and relaxing home buying regulations. The nation has already cut interest rates twice this year despite most of the developed world raising interest rates to combat inflation. The government has been reluctant to give the kind of cash handouts that fueled post pandemic recoveries in the U.S. and elsewhere as the government is attempting to keep the national debt low.
Former President Donald Trump turned himself in to authorities at a jail in Atlanta, Georgia... He was booked on 13 state felony charges linked to his attempts to overturn the 2020 presidential election results in the state. While Trump denies any wrongdoing, he was subjected to standard procedures like having his mugshot taken and being fingerprinted. He was released from custody after posting a $200,000 bond. This marks his fourth indictment in five months. The charges also implicate 18 co-defendants, with at least 16 of them having surrendered to authorities at this point.
Imports slow into ports of Los Angeles… In July, combined loaded imports into the ports of Los Angeles and Long Beach totaled 635,294 20-foot units, this is down 26.3% from July 2022 and off 10.5% from June in the lowest monthly volume of the year. Trade data has not been encouraging and is a potential warning bell for the global economy, with China’s recent disappointing data at the forefront.
Fossil fuel subsidies have surged to a record high of $7 trillion in the previous year… Thanks to global energy price increases caused by Russia’s invasion of Ukraine and post-pandemic economic recovery measures. The International Monetary Fund (IMF), says these subsidies, which encompass oil, coal, and natural gas, account for 7.1% of the world’s gross domestic product (GDP). This amount surpasses the annual global spending on education (4.3% of GDP) and makes up around two-thirds of healthcare spending (10.9%).
U.S. dollar showing strength… The euro/dollar exchange rate has fallen to its lowest point in over two months, dropping by a significant 4.5% from its peak in July. This decline is attributed to the resurgence of U.S. long-term bond yields, which have been increasing steadily throughout August. Consequently, the dollar’s index, which measures its strength against a basket of major currencies, has surged to its highest level since June 7.
Cattle futures show strength… October futures traded at the highest level since August 11, suggesting packers are caving in, paying up for fed cattle. Cash trade has remained relatively light, averaging $185.75, up slightly from last week’s cash average of $185.04. Trade is expected to be higher once again today, especially if trade takes place in the north where market supplies are tighter than their southern counterparts. Wholesale prices remained relatively strong after yesterday’s midsession gains, with Choice rising 58 cents on the day to $317.63 and Select rising 32 cents to $291.91, bringing the Choice/Select spread to $25.72.
Surging wholesale prices supported hog futures… Wholesale prices jumped $4.13 yesterday to $104.92, led by at $15 jump in bellies. While this proved beneficial for the time being, the strength is likely temporary as a seasonal rise in pork supplies and downturn in demand as the summer grilling season and BLT season coming to an end will weigh heavily on prices. The CME lean hog index is expected to post its largest daily since prices turn over recently, falling 97 cents to $96.40. The index was $105.63 as recently as August 3 and prices have not had a positive daily rise since.
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
· 8:00 a.m. Food Price Outlook — ERS
· 1:30 p.m. Pro Farmer Corn, Soybean Crop Estimates
· 2:00 p.m. Cash Rents - County — NASS
· 2:00 p.m. Mushrooms — NASS
· 2:00 p.m. Peanut Prices — NASS
· 2:30 p.m. Commitments of Traders — CFTC