Good morning!
Dollar plunge helping to lift grain and soy futures at week’s end... Corn futures enjoyed fresh buying overnight after setting back Thursday. As of 6:30 a.m. CT most contracts are up a penny. Soybeans are around 2 cents higher after seeing two-sided trade overnight. Wheat futures are also up 1 to 2 cents in early trade. The U.S. dollar index is facing heavy pressure with prices hitting their lowest level since January 2015.
Hurricane Irma update... “Every Florida family must prepare to evacuate,” said Florida Gov. Rick Scott as Hurricane Irma, one of the most powerful storms ever recorded, left a path of devastation through the Caribbean and headed toward his state. There are already shortages of gas, water and sandbags. The death toll from Irma — at least seven — is expected to rise. What is expected to be the strongest hurricane strike since Charley 13 years ago has “triggered near-panic in a region of more than 6 million people that includes Miami, Fort Lauderdale and West Palm Beach, clustered along a narrow ribbon of coastline that has seen nearly double-digit population growth over the past five years,” according to the Associated Press.
NWS calls for rain in the western Corn Belt, but dry weather in the east... The National Weather Service (NWS) calls for warm temperatures in northern and western areas of the Corn Belt, with cool temps for southern areas of the eastern Belt Sept. 13-17. Other areas of the Midwest should see normal temperatures. The precip outlook varies widely. The Dakotas and western Nebraska should see some rain, but dry weather is likely for most of Iowa, Illinois, and Indiana. Normal precip is expected in other areas of the Midwest.
China imports a record-high amount of soybeans last month... China imported 8.45 MMT of soybeans in August, a record for the month and a 10.2% jump from year-ago levels, according to preliminary customs data. Its purchases were down from July when the country brought in a record 10.08 MMT of the oilseed. Some of the arrivals the past two months were shipments that had been delayed by port congestion. But crushers also upped their bean buys as their margins improved, with most making a profit as of late August. For the first eight months of the year, China has purchased 63.34 MMT of soybeans, a 9.34 MMT (17.3%) gain from year-ago.
Chinese trade surplus unexpectedly tightens... China’s overall imports climbed 13.3% in August from year-ago, topping expectations, while its exports were up 5.5% from year-ago, as expected, based on preliminary customs data. That left the country with a $41.99-billion trade surplus, down from $46.73 billion in July. Analysts had expected the trade surplus to widen to $48.6 billion last month. Its trade surplus with the U.S. through the first eight months of the year stand at $168.06 billion, with the August surplus of $26.23 billion with the U.S. being the highest in nearly two years. That is likely to draw the attention of President Donald Trump.
Export sales report expectations...
| Commodity | 2016-17 | 2017-18 |
|---|---|---|
| Corn | 0 to 250,000 | 650,000 to 950,000 |
| Wheat | NA | 350,000 to 550,000 |
| Soybeans | -200,000 to 100,000 | 700,000 to 1,000,000 |
| Soymeal | 40,000 to 100,000 | 100,000 to 350,000 |
| Soyoil | 0 to 22,0000 | 0 to 20,000 |
SovEcon hikes grain crop estimates... The ag consultancy SovEcon has hiked its Russian grain crop estimate for 2017 by 5.4 MMT to 133 MMT. SovEcon also upped its wheat crop forecast by 2.2 MMT to 81.1 MMT. Rising crop prospects for the region signal even more competition for the U.S.
Budget, hurricane aid and debt limit suspension bill will be on the way to the White House soon... The Senate Thursday passed, 80-17, a stopgap spending, $15.25 billion in hurricane aid and debt ceiling relief package, with the House poised to give final approval today. The Senate package includes a suspension of the debt limit through Dec. 8 and a stopgap funding measure, through Dec. 8, to avoid a government shutdown when the new fiscal year begins on Oct. 1. The House is set to give final approval to the package today, clearing the way for the president’s signature.
New farm bill on agenda as Perdue held a breakfast with ag panel leaders... USDA Secretary Sonny Perdue on Thursday hosted House Ag Chairman Mike Conaway (R-Texas) and Senate Ag Chairman Pat Roberts (R-Kan.). They discussed issues relating to the upcoming new farm bill debate and pending USDA nominations. Perdue briefed the legislators on the reorganization plan he announced later in the day, which includes combining the Agricultural Marketing Service with the Grain Inspection, Packers and Stockyards Administration.
U.S. ethanol groups want Trump to intervene in Brazil dispute... U.S. ethanol producers will ask the Trump administration to intervene in a trade dispute with Brazil as tensions between the industry and foreign competitors continue to escalate. The Renewable Fuels Association, Growth Energy and the U.S. Grains Council -- all Washington-based lobbying organizations -- said in a statement Thursday that the government should “take immediate action and consider all avenues to encourage Brazil” to revoke or at least ease the 20% tariff on ethanol imports from the U.S. it announced last month. The groups are drafting a letter that they plan to send to USDA and the U.S. Trade Representative, requesting the agencies consider the tools that they have under World Trade Organization rules, Growth Energy Chief Executive Emily Skor said. More than $750 million in U.S. exports and jobs are at stake, the groups said.
Monsanto challenges Arkansas ban on dicamba... Monsanto filed a petition with the state of Arkansas, seeking to remove a ban on the herbicide dicamba that is scheduled to take effect next April 15. Dicamba has been linked to crop damage, but Monsanto calls the ban “unwarranted and misinformed.”
Still waiting on cash cattle action... Choice and Select boxed beef values both softened on Thursday, but movement was again solid at 152 loads. Meanwhile, feedlots and packers remain at an impasse on cash trade. Futures signal traders believe prices will strengthen this week given wide packer profit margins and improved beef movement. But with showlist estimates up from week-ago, that is by no means a certainty.
Rising hog weights concerning... Despite aggressive daily kill numbers, weight data signals supplies are backing up on farms. And that could become more of an issue as farmers in the Midwest get busy with fall fieldwork. Strong packer demand has led to choppy cash hog prices this week, however. Meanwhile, the pork cutout value slipped again on Friday and movement moderated to 335.23 loads.
Overnight demand news... Algeria’s state grain agency purchased around 250,000 MT of durum wheat in a tender from optional origins, with traders signaling Mexico got most of the business, with Canada supplying some of the wheat. Bangladesh approved the purchase of 200,000 MT of wheat from Russia in an inter-state deal.
Today’s reports:
- 7:30 a.m., Weekly Export Sales-- FAS
- 2:00 p.m., Cash Rents - County-- NASS
