Good morning!
More pressure overnight... Corn futures are trading low-range and down around 4 cents as of 6:30 a.m. CT as traders respond to USDA’s higher-than-expected crop condition rating. Soybeans are down 4 to 5 cents amid favorable weather forecasts and ongoing unease about trade relations with China. Wheat futures are roughly 3 to 6 cents lower, with spring wheat harvest moving toward half complete. The U.S. dollar index is moderately higher, while crude oil futures are posting slight losses.
Slight improvement in corn and soybean ratings... When USDA’s crop ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500 point scale, with 500 being perfect), the corn crop climbed 2.68 points to 360.17 points. Ratings climbed in the major “I states.” The soybean CCI rose 0.80 points to 349.16 points, with steady to higher ratings in most Midwest states helping to offset a decline in Iowa. Get more details.
Cordonnier feeling a bit more optimistic about crop prospects... Crop Consultant Dr. Michael Cordonnier maintained his national average corn yield estimate of 163.5 bu. per acre, noting that beneficial rains fell in Iowa and the Dakotas in recent days and Iowa is slated to receive more rain later this week. But he also noted that he thinks USDA is too optimistic with its 169.5 bu. per acre yield peg and that a lower figure is likely for September. Cordonnier also maintained his soybean yield estimate at 46.5 bu. per acre, again noting beneficial rains for the western Corn Belt and especially Iowa. He now has a neutral bias toward both corn and soybeans and says that if this week’s rainfall is heavy and widespread in areas that need it most, he may increase both crop pegs.
NOPA expected to report an uptick in crush from June... Members of the National Oilseed Processors Association (NOPA) will likely report they crushed 143.004 million bu. in July, according to analysts surveyed by Reuters. This would be a decline from July 2016 when NOPA members crushed 143.715 million bushels but up 4.93 million bushels from June. Soyoil stocks at the end of July are expected to come in around 1.623 billion lbs., down from 1.703 billion lbs. at the end of June.
Brazil already close to breaking bean export record... Brazil has sold 53.37 MMT of soybeans for export through the second week of August, already topping 2016’s total exports by 3.5%, according to preliminary data from the country’s development ministry. This also signals Brazil should have no trouble breaking its 2015 soybean export record of 54.3 MMT. Brazil’s oilseed industry association expects the country to export 64 MMT of beans this calendar year.
Preliminary dumping decision in Argentine, Indonesian biodiesel case delayed...Commerce Department officials will wait a little longer in deciding whether producers/exporters from Argentina and Indonesia are dumping biodiesel in the U.S. market. Commerce extended the deadline for issuing a preliminary determination from Aug. 30 to no later than Oct. 19 at the request of the National Biodiesel Board Fair Trade Coalition and its members — petitioners in the probe as well as a companion subsidy case. The investigations could result in duties on the investigated imports, but that outcome is not assured. The U.S. imported $1.6 billion of biodiesel from the two countries in 2016. While the coalition filed for extensions for both the anti-dumping and subsidy cases, the extension only applies to the dumping case. Preliminary decisions in the subsidy cases are on track for Aug. 22.
Fed’s Dudley favors another rate rise this year... Federal Reserve Bank of New York President William Dudley said it isn’t unreasonable to expect an announcement on how the Federal Reserve plans to reduce its $4.5-trillion balance sheet in September, adding that he would be in favor of another rate hike this year if the economy holds up. Dudley also weighed in on the race for the position of Fed chair, saying former Goldman Sachs Group Inc. executive and White House economic adviser Gary Cohn was a “reasonable candidate” for the job. Minutes from the July policy meeting, which may give some hint as to the FOMC’s plans, will be published tomorrow.
India will challenge any U.S. action in WTO poultry dispute... Indian trade officials are prepared to challenge any U.S. effort at the World Trade Organization (WTO) to impose trade sanctions on New Delhi over the poultry dispute between the two countries. The topic could be decided on Aug. 19 at the WTO headquarters in Geneva, where India plans to block the U.S.'s retaliatory action. The WTO is considering a U.S. request to sanction $450 million in annual retaliatory trade measures against India until it complies with a 2015 ruling. India and some other WTO members are concerned that Washington’s request for retaliation before seeking a compliance investigation does not adhere to the proper sequencing of the WTO dispute process.
Traders may have factored in too big of a cash price drop... While traders have a negative bias toward this week’s cash cattle prospects, the $6-plus discount the August contract holds to last week’s action that took place at an average price of $115.17 is likely overdone. Showlist estimates are up 11,000 head this week, as gains in Nebraska more than offset reductions elsewhere. Boxed beef prices were mixed to start the week.
Strong hog slaughter numbers to start the week... Pork movement was lackluster to start the week on a 7-cent decline in the pork cutout value. With supplies expected to build heading into fall, pork movement and slaughter numbers take on added importance. On a more positive note, Monday’s kill of 446,000 head was up 18,000 head from year-ago levels.
Overnight demand news... Jordan’s issued an international tender to buy 100,000 MT of barley.
Today’s reports:
- 2:00 p.m.,Feed Grains Yearbook tables-- ERS
- 2:00 p.m., Turkey Hatchery-- NASS
