Good morning!
Some corrective gains overnight... Corn futures are fractionally higher after sticking to around a two-cent trading range overnight. Soybean futures also saw quiet, two-sided trade overnight, and as of 6:30 a.m. CT most contracts are up a penny or two. Spring wheat futures have soared 15 to 17 cents. Winter wheat is up 3 to 5 cents. The U.S. dollar index is slightly higher this morning, as are crude oil futures.
Warm, wet forecast for Scouts on Farm Journal Midwest Crop Tour... The National Weather Service forecast for Aug. 21-25 calls for heat across the Midwest and Plains, with the highest temps expected for the eastern Corn Belt. But wet weather across the Midwest over this period should help blunt the impact of the high temperatures. Texas and Oklahoma are expected to be dry the third week of August.
Dicamba-impacted soybean acres estimated at 3.1 million... The number of soybean acres impacted by Dicamba across the U.S. continues to increase and is now pegged at 3.1 million as of Aug. 10, according to surveys of agricultural extension agents conducted by Kevin Bradley, an associate professor in the University of Missouri’s Division of Plant Sciences. Official dicamba-related cases currently being investigated by departments of agriculture in 17 states across the south and Midwest have also risen, from 1,411 to 2,242, Bradley reports.
Another year of record-large Argentine corn acres expected... Argentina’s corn acreage will likely climb between 5% and 10% in 2017-18 to more than 5 million hectares, according to analysts cited by Reuters. This would be the second year in a row of record-high corn plantings. Corn acreage has climbed in the country since the election of President Mauricio Macri and the subsequent relaxing of export restrictions. Plus margins are more attractive for corn and recent ample rainfall is favorable for planting the grain, the analysts explain. Corn also has an advantage over wheat in that it has a longer planting season.
NAFTA 2.0 talks begin today and last through Sunday... While U.S. officials are holding back on committing to a set number of negotiations, Canadian sources have signaled there will be seven rounds. Today’s session in Washington will begin with three speeches — one from each of the country’s principal negotiators: U.S. Trade Representative Robert Lighthizer, Canadian Foreign Minister Chrystia Freeland, and Mexican Economy Secretary Ildefonso Guajardo. Negotiating texts will not be released to the public because they are “classified” documents, the USTR official said.
Major farm groups to issue joint statement today on NAFTA 2.0... American Farm Bureau Federation, the Canadian Federation of Agriculture (CFA) and Mexico’s Consejo Nacional Agropecuario will issue a joint statement today in support of NAFTA. That could be a signal the groups do not want their country’s trade policy negotiators to use agriculture as leverage to garner other priorities. Meanwhile, USDA Secretary Sonny Perdue, CFA President Ron Bonnett and Bosco de la Vega of Consejo Nacional Agropecuario will each speak during an event today at the National Press Club in Washington.
FOMC minutes released today will be closely watched for any clues... Investors looking for clues as to when the Federal Reserve will start unwinding its $4.5-trillion balance sheet will turn to the minutes of the July Federal Open Market Committee (FOMC) meeting this afternoon. The minutes may also give guidance as to how many policy makers agree with Federal Reserve Bank of New York President William Dudley that another rate rise may be needed before the end of the year.
Ukraine’s wheat harvest winding down... With Ukraine’s wheat harvest nearing completion (estimated to be 98% done), the country has brought in 26 MMT of the grain with an average yield of 4.16 MT per hectare. Last week, USDA estimated Ukraine’s 2016-17 wheat crop at 26.80 MMT, which would be down slightly from the year prior.
DOJ settles Clean Water Act/WOTUS suit against farmer... A $1.1-million settlement in the case involving California farmer John Duarte was announced Tuesday by the U.S. Department of Justice (DOJ), just as the matter was about to go to trial. Under the settlement, Duarte and Duarte Nursery Inc. agreed to pay $330,000 in civil penalties and fund $770,000 in restoration work on properties other than his own as compensation for damage to 22 acres of protected streams and wetlands on his property. Duarte will be able to put most of the site back to agricultural use and he is to seek future determinations on whether streams and wetlands on the property were subject to federal protections. A judge previously ruled that Duarte broke the law and the trial was scheduled to begin Tuesday was to establish penalties. The government had been seeking $2.8 million in fines and millions of dollars in mitigation expenses.
Quintenz sworn in as CFTC Commissioner... Brian Quintenz was officially sworn in as a member of the Commodity Futures Trading Commission (CFTC) on Tuesday. “I’m deeply honored to be sworn in as a Commissioner of the CFTC,” Quintenz said. “I have tremendous respect for this agency and the people who work here. I look forward to working to fulfill the agency’s mission to foster open, transparent, competitive, and financially sound markets.”
Cattle could be working on a low... Strong gains in the cattle complex yesterday led to talk the markets may be working on near-term lows. Recent support has largely stemmed from futures’ discount to last week’s cash trade. Higher showlists and choppy beef prices signal cash prices will likely slip this week. So far, there has just been some very light action at $110 in Iowa, which is in line with where the August contract settled on Tuesday.
Hogs rally, but in or near overbought territory... Pork movement picked up to 391.75 loads yesterday on a modest, 11-cent price dip. This eased concerns about recent sluggish movement and helped futures to post a strong rally yesterday. The momentum of the market favors bulls, but several contracts climbed into overbought territory on Tuesday according to the nine-day Relative Strength Index.
Overnight demand news... Egypt tendered to buy an unspecified amount of wheat from global suppliers. Tunisia tendered to buy 92,000 MT of soft wheat and 50,000 MT of animal feed barley from optional origins.
Today’s reports:
- 9:30 a.m., Weekly Ethanol Production -- EIA
- 11:00 a.m., Livestock, Dairy, & Poultry Outlook: August 2017-- ERS
- 1:00 p.m., FOMC Minutes -- Federal Reserve
- 2:00 p.m., Broiler Hatchery-- NASS
