WEATHER

U.S. Braces for a Hotter and Drier Fall as La Niña Looms

Wed, 11 Sep 2024 20:31:57 GMT

If predictions hold true, this fall could be a hotter and drier season across much of the U.S. According to the Climate Prediction Center, a division of the National Oceanic and Atmospheric Administration (NOAA), unusually warm days are still ahead for parts of the country during the meteorological fall, which spans from Sept. 1 to Nov. 30.

Seasonal Temperature Outlook

(NOAA)

The temperature outlook for September through November 2024 favors a warmer-than-normal season, with the greatest probabilities — exceeding 60% — expected in New England and parts of the Southwest. The West, particularly Arizona, Colorado, New Mexico and Utah, is likely to experience an unusually warm September. On the opposite coast, Florida and much of New England are also trending warmer than normal. Conversely, while southwestern Alaska may see below-normal temperatures, northern Alaska is more likely to experience above-normal warmth.

La Niña, known for bringing dry, warmer-than-average conditions to the southern half of the country, is favored to develop during the September to November period, with a 66% chance of formation. Once established, there’s a 70% chance it will persist through the winter of 2024-2025. Though La Niña hasn’t officially started, signs of its arrival are reflected in NOAA’s fall weather predictions.

Seasonal Precipitation Outlook

(NOAA)

As the weather pattern strengthens in the coming months, the U.S. might see an extended period of warmth and dryness, particularly in regions already feeling the heat.

Your Next Read: It’s Okay to Celebrate Your Wins

First Thing Today: Hot, Dry Forecast for Spring Wheat Country

Wed, 21 Sep 2022 07:45:15 GMT

Firmer tone ahead of reports... Grain traders are favoring the upside as they prepare for the onslaught of USDA data today. Corn and soybean futures are both mostly 3 to 4 cents higher. Wheat futures are up 12 to 16 cents, with the HRS market again leading the charge. The U.S. dollar index is up slightly, as are crude oil futures.

All eyes on USDA... USDA’s much-anticipated Acreage and Grain Stocks Reports arrive at 11:00 a.m. CT today. Traders expect USDA to report corn plantings fell slightly while soybean plantings climbed a bit from March intentions to 89.903 million acres and 89.750 million acres, respectively. All wheat plantings are expected to come in around 46.070 million acres, up marginally from March. Cotton acres are also expected to climb slightly to 12.233 million acres. June 1 corn and soybean stocks are expected to come in at their third highest level on record at 5.123 billion bu. and 983 million bu., respectively. Quarterly wheat stocks are expected to come in around 1.137 billion bu., Their highest level since 1988.

Hot, dry forecast for spring wheat country... The National Weather Service forecast for July 5-9 calls for heat across the country, with western areas of the Northern Plains expected to see some of the highest temps. Adding to worries, NWS also anticipates the weather will be dry for the Northern Plains and into Minnesota, as well as in Texas. This is concerning for an already-battered spring wheat crop that will be in its key grain filling stage, as well as for the corn crop that will be nearing pollination. Above-normal precip is likely for southern and eastern areas of the Corn Belt.

Heat wave pulls French wheat crop ratings lower... As expected, French soft wheat crop ratings fell the week ended June 26 as a heat wave took a toll on the crop. FranceAgriMer lowered the amount of soft wheat rated good to excellent by 3 percentage points to 65%, which is equal to year-ago at this point. The hot, dry conditions have also accelerated crop development, leading to an early start to harvest. Four percent of the crop was harvested as of Monday, the French farm office reports. The recent heatwave also prompted the European Commission to lower its estimate of common wheat usable production (excluding durum) by 2.4 MMT to 138.9 MMT.

Conaway reaches deal on ag budget cuts... House Ag Chairman Mike Conaway (R-Texas) late Thursday said he reached agreement with the Budget Committee on a cut to food stamp spending. “As far as Ag Committee and Budget, we’re done,” he said. Conaway did not provide details of his agreement but said he agreed to specific cuts the House ag panel would have to abide by in the fiscal 2018 budget. He indicated that the cut would be small enough to make it politically feasible to move forward later this year with developing a new farm bill. Conaway also said he still plans to act on a farm bill through regular order late this year or early in 2018.

New CBO baseline signals 2018 farm bill spending levels... The Congressional Budget Office (CBO) on Thursday released an updated 10-year baseline of federal revenue and spending that includes projected costs of mandatory farm and nutrition programs. CBO estimates spending on agriculture will amount to $137 billion between fiscal 2018 and 2027, while the Supplemental Nutrition Assistance Program (SNAP/food stamps) will cost $679 billion over the same decade. The shifts in the baseline put even more pressure on farm-state lawmakers to determine how to divvy up what appears to be a smaller pie. Get more details .

Trade talks between the U.K. and U.S. ahead... The U.K. and U.S. will begin “actual discussions” over a post-Brexit trade agreement on July 24, U.K. Trade Secretary Liam Fox told BBC TV’s Question Time. Britain cannot formally sign trade deals with other countries until it leaves the EU in March 2019, but it can lay the groundwork for them so they can be ratified soon after.

Uptick in Chinese manufacturing for June... China’s manufacturing activity accelerated more than expected in June, as the world’s second-largest economy continues to confound expectations for a slowdown. The official manufacturing Purchasing Managers’ Index rose to 51.7, compared to a reading of 51.2 in May. Investors also digested economic data out of Japan, but local equities sold off following the fall in tech stocks overnight.

U.S. and Mexico expected to officially sign a deal on sugar trade as soon as today... The suspension trade agreement reduces the amount of refined sugar Mexico can export to the U.S. The deal will be implemented on Oct. 1 for the start of the 2018 fiscal year. President Donald Trump commented on the deal on Thursday, saying it “is a very good one for both Mexico and the U.S.” Officials with both the Corn Refiners Association and the American Sugar Alliance agree.

Perdue in China to mark return of U.S. beef... USDA Secretary Sonny Perdue is in China to mark the official return of U.S. beef to the Asian nation. He’ll meet with China’s Minister of Agriculture Han Changfu and Chinese Vice Premier Wang Yang. Perdue also will join U.S. Ambassador to China Terry Branstad and cut prime rib from Nebraska to celebrate the move. China has rapidly become a major importer of beef. USDA said the first shipment of U.S. beef arrived in China on June 19. Han told Perdue and Branstad that agriculture deals between China and the U.S. would improve the well-being of the two peoples, and would aid in particular the farm industry of the U.S.

Ranchers in Brazil say a FMD vaccination overhaul is needed... Cattle ranchers in Brazil are pushing for an overhaul of the country’s vaccination program against Foot and Mouth Disease (FMD), which was one of the issues that led to the U.S. banning imports of fresh beef from the country. CNPC, a national council of cattle ranchers, asked the government to cut doses in half, change the location where the vaccine is administered from the muscle to just under the skin and to remove a substance called saponin from the vaccine. The group also believes the mandatory, twice annual vaccination should be eliminated in 12 states that have not reported a case of FMD in 20 years.

More lower cash cattle trade... Cash cattle trade picked up between $118 and $120 across the Plains yesterday, which was down from week-ago, as expected. The June contract that expires at noon today is trading in line with the upper end of this week’s action, while the August contract holds around a $1.50 discount to the low end of that range.

Neutral H&P Report... Yesterday’s Quarterly Hogs & Pigs Report show the U.S. hog herd stands at a record-level, but that was not surprising. All Hogs & Pigs, Kept for Breeding and Kept for Marketing all came in basically in line with expectations. This means traders will likely quickly shift their attention back to the cash hog market and whether it is working on a top. Yesterday, cash bids strengthened across much of Midwest, with the exception of the eastern Corn Belt.

Overnight demand news... Jordan bought 50,000 MT of hard wheat from optional origins. It also issued a new tender to buy 100,000 MT of feed barley from optional origins.

Today’s reports:

11:00 a.m., Acreage -- ERS
11:00 a.m., Grain Stocks -- ERS
2:00 p.m., International Food Security Assessment -- ERS

First Thing Today: North Korea Tensions Rise

Wed, 21 Sep 2022 07:45:01 GMT

Good morning!

Soybeans push to new highs for the month... Corn and soybean futures started the overnight session under pressure, but both markets are now trading high-range, with corn up a penny and soybeans 7 to 8 cents higher. Winter wheat futures are up 1 to 2 cents, with spring wheat posting even stronger gains. The U.S. dollar index is under moderate pressure, with crude oil futures also favoring the downside.

Harvest-friendly forecast... The National Weather Service forecast for Sept. 27 through Oct. 1 calls for normal temperatures and dry weather in the western Corn Belt and into Illinois. Indiana and Ohio are expected to see warm temperatures and normal rainfall. The Central and Southern Plains are expected to see cool, wet weather over this timeframe.

North Korean tensions rise... North Korea reacted to President Donald Trump’s latest sanctions, announced yesterday, with Kim Jong Un warning of the “highest level of hard-line countermeasure in history.” The country’s foreign minister suggested this could include testing a hydrogen bomb in the Pacific. Asian stocks closed slightly lower into the weekend following the increase in tensions.

NAFTA 2.0 negotiators meet for third round of talks in Ottawa... Round 3 of North American Free Trade Agreement (NAFTA) modernization renegotiations will include sensitive topics like dispute settlement and rules of origin for automobiles as negotiators meet Sept. 23-27 in Ottawa. An agreement on digital trade is expected to be an early win for the negotiators. Commerce Secretary Wilbur Ross is getting ahead of a more challenging third round of NAFTA negotiations with Mexico and Canada by pushing for tougher rules of origin, based on the Trump administration’s belief that auto imports in particular have too little U.S. content. U.S. Trade Representative Robert Lighthizer will submit new proposals covering rules of origin, labor standards in Mexico and dispute resolution. U.S. negotiators view achieving several changes to NAFTA as necessary for meeting Trump’s goal of cutting the U.S. trade deficit. This includes: limiting Buy American procurement waivers, increasing U.S. content in rules of origin, raising Mexican wages, and changing investment rules.

Strong Russian wheat shipments thus far in 2017-18... Russia will likely export 4.1 MMT of wheat in September, projects the ag consultancy SovEcon. This would be a 15.8% increase from year-ago and 195,000 MT increase from August. For the first three months of the 2017-18 marketing year, the consultancy projects grain exports will total 9.4 MMT, up 1.058 MMT (12.7%) from this point in 2016-17. Egypt has been its top customer.

Rainy weather reportedly slows Russian winter grain seeding... Rainy weather has delayed winter grain plantings in Russia, reports Pyotr Checkmarev, head of the ag ministry’s crop growing department. He also said “next year does not really promise a good harvest,” which is why the country should have reserves for next year. But the latest ag ministry data does not reflect any major delays. As of Sept. 21, 10.0 million hectares had been planted, or 57.5% of the intended winter grain area. That compares to seedings of 10.1 million hectares at this point last year. Regarding the 2017 grain crop, the ag ministry is sticking with its 110 MMT by clean weight peg, which is well below crop estimates from other analysts topping 130 MMT. The ministry explains that there is risk some areas won’t harvest their crop before cold weather hits.

Lagging EU wheat shipments... From the start of the 2017-18 marketing year through Sept. 19, The European Union has exported 3.7 MMT of soft wheat, down 42% from last year at this point, official trade data shows. The region has struggled to compete against an influx of cheap wheat out of the Black Sea region.

Arkansas advances a measure to ban dicamba use over growing season... Arkansas’ State Plant Board advanced a proposal that would ban the use of dicamba weed killers from April 16 to Oct. 31, 2018, meaning the state is just one step away from enacting an official ban on the herbicide that farmers charge can drift and damage crops not meant to withstand the chemical. Monsanto’s Vice President of Global Regulatory Ty Vaughn said the decision was not based on science and warned that “all options are on the table for Monsanto’s next move.” Previously, the company said it may file a lawsuit if the board denied its petition for it to reject the proposed cutoff date for sprayings, which the board did with a unanimous vote. BASF and DuPont also sell dicamba herbicides under different brand names. After a public comment period and public hearing on Nov. 8, the proposal will move to the Arkansas legislative subcommittee for final approval.

Senators push for more funding of ag export promotion programs... A group of lawmakers have introduced bipartisan legislation that would double funding over the course of five years for two of USDA’s export promotion programs -- the Market Access Program and Foreign Market Development Program. The measure was introduced by Senators Joe Donnely (D-Ind.), Angus King (I-Maine), Joni Ernst (R-Iowa) and Susan Collins (R-Maine). “As American farmers and ranchers are struggling with historically low commodity prices, maintaining and strengthening U.S. trade relationships around the world is critical to the survival and profitability of the agricultural community,” Ernst explained, adding that these programs have “proven to be effective in expanding foreign markets for American agricultural goods.”

Exchange lowers initial margins on live cattle... CME Group has lowered initial margins for speculators in live cattle futures from $1,925 per contract to $1,650 per contract; the rates will take effect after the close of business today.

Another week of extended cash cattle negotiations... Cash negotiations are again stretching late into the week. So far, just a few hundred head have changed hands in Kansas around $107. Trade could be limited leading up to the Cattle on Feed and Cold Storage Reports this afternoon. The former is expected to show a 2.9% drop in Placements from year-ago.

Pork tumbles as aggressive slaughter continues... For the third day in a row, packers slaughtered an estimated record-high 455,000 hogs on Thursday, keeping this week’s kill ahead of week-ago and well ahead of year-ago levels. In fact, this week’s kill could be near the fall high. An abundance of pork has also weighed on the product market. The pork cutout value plunged $3.01 yesterday and it is now down $4.58 from last Friday. Movement also slowed after strong load counts the prior two days.

Overnight demand news... South Korea issued a tender to buy 55,000 MT of corn from worldwide origins.

Today’s reports:

2:00 p.m., Cattle on Feed -- NASS
2:00 p.m., Chickens and Eggs -- NASS
2:00 p.m., Cold Storage -- NASS

First Thing Today: Risk Aversion Overnight

Wed, 21 Sep 2022 02:37:03 GMT

Good morning!

Risk aversion weighs on markets overnight... Rains moving across Iowa early this morning as well as unease about a possible trade announcement from the Trump administration weighed on the grain and oilseed markets overnight. As of 6:30 a.m. CT, corn is down 3 to 4 cents, soybeans are 8 to 9 cents lower, winter wheat is posting losses of 6 to 8 cents, and spring wheat is down 11 to 17 cents. Outside markets are also price-negative, with the U.S. dollar index posting moderate gains and crude oil futures under pressure.

Forecast remains non-threatening... Rains over the weekend favored North Dakota and Nebraska as well as Ohio, and rains are moving across Minnesota and the northern half of Iowa early this morning. While temperatures are expected to warm a bit this week, no threatening heat is anticipated. Plus dry areas of Iowa and Illinois are expected to see some relief. The National Weather Service forecast for Aug. 19-23 calls for wet weather across the western Corn Belt and into northwest Illinois. Much of the eastern Belt is expected to see normal precip. Warm temps are expected from Minnesota, Iowa and northern Missouri eastward. Normal temps are likely elsewhere across the Midwest.

Legislative agenda for remainder of FY 2017... Congress remains on its long summer recess but a big workload awaits them on their return after Labor Day. The House has only 12 working days before the end of September when a new fiscal year (FY) begins; the Senate has 16 days. The legislative agenda when lawmakers return includes: (1) a bill raising the debt ceiling; (2) spending bills to keep the government open; (3) Extensions for expiring programs on Sept. 30, including the Children’s Health Insurance Program, the coast Guard, and others; and (4) a budget resolution setting overall spending levels for FY 2018 and one which will allow the Senate to use a filibuster-busting mechanism that could allow a tax bill to pass with just 51 votes. Also of note, North American Free Trade Agreement talks will take place Aug. 16-30 in Washington.

Update on North Korea... U.S./North Korea anxiety continues, but the focus will be on whether the situation eases somewhat after President Donald Trump late Friday talked with China’s leader. Chinese President Xi Jinping urged Trump to exercise restraint over tensions with North Korea, Chinese state media reported. The two leaders vowed to remain in close touch over the situation, state media said. The Associated Press reports that Joseph Yun, the U.S. envoy for North Korea policy, has been in regular contact with Pak Song Il, a senior North Korean diplomat at the country’s mission at the United Nations. The AP report indicated the discussions had not eased fears of a military confrontation, but could prove a foundation for negotiations going forward.

Politico: Admin to announce probe into China’s alleged violation of IP rights today... An investigation into China over allegations it violated U.S. intellectual property (IP) rights and forced technology transfers will be unveiled Monday, Politico reported, citing an unidentified administration official. Of note, there will be no immediate action against China following the president’s signing of the memorandum, but the steps will authorize U.S. Trade Representative Robert Lighthizer to determine if an investigation of Beijing’s laws, practices or actions is warranted. Senior administration officials denied that the memorandum is part of a coordinated effort by the White House to pressure its largest trading partner to be more aggressive in getting North Korea to curb its threats of ballistic missile action against allies in the region and the U.S. territory of Guam. A Chinese state newspaper said this “could trigger a trade war.” Read more .

Sugar producer challenges U.S./Mexico trade deal... lCSC Sugar LLC has filed a court case challenging a U.S./Mexico trade suspension deal that prevented U.S. duties on Mexican sugar. The two countries signed a deal in June that limits the amount of refined sugar Mexico could ship to the U.S., sets minimum prices to prevent sugar imports from undercutting domestic prices, and stopped the U.S. from imposing anti-dumping or countervailing duties. The company, which has operations in Mexico and the U.S., has yet to file a complaint laying out its claims.

New corn-only ethanol plant in Brazil first of its kind... On Friday, Brazil’s FS Bioenergia launched the country’s first ethanol plant that solely processes corn. The Mato Grosso-based plant is expected to produce around 240 million liters (63.4 million gallons) of the biofuel each year, as well as 6,200 MT of corn oil and 60,000 megawatts of power. It emphasizes the country’s need to find outlets for its growing corn crop. The industry is dominated by sugar cane-based ethanol, with around 360 plants processing cane.

Momentum still favors market bears in cattle market... Cattle futures sustained technical damage last week and momentum still favors market bears. That said, pressure could be limited by the discount the August contract still holds to the cash market. But cash prices could also slide going forward as supplies are building. Dressed cattle weights narrowed their discount to year-ago in the latest reporting period, though they remain well under year-ago levels.

October lean hogs well below cash index... August lean hogs go off the board at noon today, so the October contract’s still wide (nearly $17) discount to the cash hog index will garner increased attention. That could lead to additional corrective gains this week.

Weekend demand news... Saudi Arabia bought 660,000 MT of animal feed barley in a tender where Europe, the Black Sea, North and South America and Australia presented offers.

Today’s reports:

10:00 a.m., Weekly Export Inspections -- AMS
11:00 a.m., Cotton & Wool Outlook: August 2017 -- ERS
11:00 a.m., Oil Crops Outlook: August 2017 -- ERS
2:00 p.m., Feed Outlook: August 2017 -- ERS
2:00 p.m., pm Wheat Outlook: August 2017 -- ERS
3:00 p.m., Crop Progress -- NASS

Keep Your Feeding Program Priorities Straight this Fall/Winter

Wed, 20 Oct 2021 17:00:00 GMT

The busyness of the summer season is finally over, but it has some producers staring out into their fields wondering what they need to do to help stretch their feed inventories throughout the fall and winter.

Donna Amaral-Philips, Extension Professor at the University of Kentucky, recommends these five tips when it comes to keeping your feeding priorities straight during the fall and winter months.

1. Develop a plan for using homegrown forages and determine whether you need to purchase other forages.

“To devise this plan, sample all forages and submit representative samples to a forage testing laboratory to determine their nutrient content,” Amaral-Philips says. “Forage samples taken at the beginning of the feeding season can serve as a starting place for balancing rations.”

Additional forage samples should also be taken throughout the feeding season to gain a better understanding of the nutrient content. Single samples help to identify a baseline, while three to four samples taken throughout the season help better describe the nutrient content of the forages being fed.

It’s also important to take inventory of forages and commodities in storage. “With this information, you can allocate forages stored separately to the various groups of animals and determine shortfalls so that forages can be purchased or other feedstuffs can be added to rations being fed,” Amaral-Philips notes.

2. Balance rations for all groups of cattle on the dairy operation using the inventory and forage analyses.

“Dairy cattle need nutrients, not ingredients, to support body maintenance, milk production, and growth,” Amaral-Philips says. “Rations also are balanced to provide these nutrients not only at the least cost, but to optimize performance. Various combinations of forages and other commodities can meet nutrient needs and may result in cost savings.”

According to Amaral-Philips, because of increased volatility in commodity prices, dairy farmers should follow ingredient prices and reevaluate feeding programs frequently.

3. Review feeding practices with the person feeding the dairy’s lactating cows, heifers, and dry cows.

Going over feeding practices with your team helps ensure cows are fed correctly, consistently. Take time to review standard operating procedures with employees and point out operational changes during the fall and winter months.

4. Work closely with your nutritionist and other consultants to develop and modify the feeding and overall management program throughout the feeding season.

“Constantly work on developing an ongoing relationship that results in dialog among all parties. It can help to improve your bottom line to discuss different ways to group, feed, and/or manage your herd,” Amaral-Philips says. “Sometimes, producers incorrectly believe that they do not need to oversee and/or understand feeding and nutritional concepts. Understanding these concepts is critical for dialog and to understand when and how to make minor adjustments or temporary changes before they become disasters.”

5. Start making plans for the next cropping season.

According to Amaral-Philips, now is the time to evaluate whether to make changes to your cropping system or forage purchasing plans for next year. Work with your nutritionist, agronomist, or extension agent to help determine what seed varieties will work best for your operation in the upcoming season.

“Using your forage analyses, review whether your harvesting (or forage harvesters) techniques have resulted in the highest-quality forages needed to feed high-producing dairy cows and whether you need to make changes. Then, complete a plan to incorporate these changes into next year’s cropping season,” Amaral-Philips adds.

Weather, Aphid-Vectored Virus Affecting Forage Oat Crops in Georgia

Fri, 20 Nov 2020 05:19:42 GMT

From what’s being observed in some south Georgia pastures this fall, oats are struggling, with growers seeing issues from cold damage, nutrient and moisture stress, and possible barley yellow dwarf virus. Above-average rainfall in November and December have also prevented cattle from getting into oat pastures for winter grazing.

Farmers have observed older, lower leaves on oat plants turning off-color due to unseasonably cold temperatures in south Georgia. Oats are particularly vulnerable to freezing temperatures, and when temperatures start to drop, anthocyanins (pigments that give plants their color) collect in the plant and cause a purplish color.

In the absence of cold weather, this color can be attributed to phosphorous deficiency or, more concerning, as an early warning symptom of barley yellow dwarf virus, which can also cause this purple color in oats. University of Georgia Cooperative Extension Professor David Buntin confirms that the virus has been more prevalent throughout the state.

The virus is vectored by the bird cherry-oat aphid and growers who suspect infection should have lab test to confirm the virus.

It’s important to remember that oats are more susceptible to the barley yellow dwarf virus than any other small grain. Although recent colder temperatures in south Georgia will reduce how active the aphids are, and a hard freeze could kill off aphid populations, very high aphid populations could migrate low to the ground and survive.

UGA Extension offers the following tips for farmers who are concerned about oat crop health:

If oats are highly infected with barley yellow dwarf virus, it is not likely an insecticide will be of any benefit.
If oats do not appear infected with barley yellow dwarf virus and aphids are present, an insecticide will be of benefit.
If oats do not appear infected with barley yellow dwarf virus and aphids are not present, scout the field for aphids.

For more on growing small grains in Georgia, visit http://extension.uga.edu/topic-areas/field-crop-forage-turfgrass-production/small-grains.html .

First Thing Today: Wide-open Harvest Forecast

Thu, 12 Nov 2020 04:42:20 GMT

Good morning!

Corn and soybeans under pressure as harvest picks up... Corn and soybean futures faced pressure overnight as harvest pressure is building for both markets. Corn futures are down a penny as of 6:30 a.m. CT, while soybeans are around a nickel lower. Winter wheat futures also faced pressure overnight and are trading 3 to 4 cents lower. Spring wheat is fractionally lower. The U.S. dollar index is posting solid gains, with crude oil futures also higher to start the week.

Wide-open weather for harvest... Unseasonable heat along with mostly dry conditions around the Midwest have pushed a lagging crop toward the finish line, easing concerns that frost could clip yields. Rains are possible for northwest regions of the Corn Belt early this week, but the National Weather Service forecast for Sept. 30 to Oct. 4 signals that farmers should be able to make good progress on harvest in the days ahead as dry conditions are expected across the Corn Belt, with warm temperatures in the western Corn Belt and Upper Midwest and normal temperatures expected elsewhere in the region. Dryness is expected to extend into Kansas, Oklahoma and northeast Texas, with temperatures expected to be cool in Texas and Oklahoma. Normal temperatures are likely for Kansas, according to NWS. Also of note, weekend rains in Brazil were disappointing, but there are more chances for rain this week.

Kim Jong Un: ‘Deranged’ Trump will ‘pay dearly’ for threat... North Korean leader Kim Jong Un called President Donald Trump “deranged” and said he will “pay dearly’ for his threats,” a possible indication of more powerful weapons tests on the horizon. North Korea’s foreign minister reportedly said his country may test a hydrogen bomb in the Pacific Ocean to fulfill Kim’s vow to take the ‘highest-level’ action against the United States. The N.Y. Times said the remarks are “believed to be the first time a North Korean leader directly issued a statement to the world under his name.” Foreign Minister Ri Yong Ho said Trump’s “rocket man” insult for Kim Jong Un makes a military clash more likely. Eight U.S. aircraft flew close to the North Korean coastline while remaining in international airspace, the Pentagon said in a statement, describing the mission as a “demonstration of U.S. resolve and a clear message that the president has many military options to defeat any threat.”

Congress returns to focus on tax reform, budget and more... Congress returns to work on lingering big issues, like tax reform and budget matters and possibly health care. A primary runoff election in Alabama is the key political topic of note, as it has become a proxy war between President Donald Trump and conservative Sarah Palin and former White House staffer Stephen Bannon. Roy Moore, the former chief justice of the Alabama Supreme Court, is trying to unseat Sen. Luther Strange, who was appointed in February to the seat when Jeff Sessions resigned to become attorney general and is backed by Republican leadership and Trump. Meanwhile, House Republicans will hold a retreat Wednesday to discuss tax-overhaul options.

Revised push on health care... With the Senate still expected to vote this week on a Republican proposal to repeal the Affordable Care Act (ObamaCare), Sens. Lindsey Graham (R-S.C.) and Bill Cassidy (R-La.) shifted more money to Alaska and Maine, whose senators have expressed reservations about it. Sens. John McCain (R-Ariz.) and Ted Cruz (R-Texas) announced their opposition to the bill, and it remained unclear if the changes would be enough to garner the needed votes. Sen. Susan Collins (R-Maine) said she wanted to see the final details before making a final decision, but in remarks on Sunday indicated she definitely would not support the bill.

Some tax cut details surface... Trump and Republican leaders plan to cut the top tax rate for the wealthiest Americans to 35% and significantly reduce taxes on big and small businesses, according to details leaked to Axios and first published by the Washington Post. GOP leaders and the White House plan to cut the top tax rate for small businesses -- known as “pass-throughs” -- from 39.6% to 25%. (Currently small businesses pay the same tax rates as individuals, and this puts them at a disadvantage to larger corporations, which pay lower rates.) Most Democrats have signed a letter saying they wouldn’t support any tax bill that adds to the deficit or offers new tax breaks to the wealthiest Americans. Trump is planning to give a speech unveiling the framework in Indiana on Wednesday. Final details are expected to change substantially as it goes through the normal legislative processes. Read more .

Another month of Strong Chinese corn buys... China imported 380,000 MT of corn in August, up sharply from year-ago levels as a rise in domestic prices prompted users to turn to imports, official customs data shows. This follows imports of 910,000 MT in July, the fourth highest figure on record. But for the first eight months of the year, China’s corn buys are lagging year-ago by 31.5% at 2.03 MMT.

China to auction off some of its soybean reserves... China will begin auctioning soybeans from its state reserves, the National Grain Center announced. The auction will begin Sept. 29 and a total of 300,000 MT of soybeans from Helongjiang, Inner Mongolia, Liaoning and Henan will be offered.

WTO grants U.S. request for probe of Chinese ag tariffs... The World Trade Organization granted the Trump administration’s request to investigate whether Chinese trade policies violate international trade rules during a Sept. 22 meeting in Geneva. Over the next year, the WTO will evaluate U.S. allegations that China imposed “impermissible” restrictions on farm imports, failed to provide sufficient information about its import quantities, and didn’t disclose changes to those import quotas. Should the WTO rule China’s tariff-rate quotas (TRQ) policies violate international rules, Beijing could be forced to accept increased amounts of U.S. grain imports or face retaliation from Washington. Get more details .

Some ag and food policy issues on NAFTA 2.0 agenda in Ottawa... North American Free Trade Agreement (NAFTA) negotiators discussed food safety and animal and plant health issues on Saturday and Sunday as the third round of talks continue in Ottawa. “We’re having some constructive discussions,” Canadian chief NAFTA negotiator Steve Verheul said. “We’re looking at 28 different negotiating groups at the moment,” Verheul said. Officials from Canada, Mexico and the U.S. will discuss agricultural market access issues Tuesday and Wednesday, but Verheul said he did not expect the U.S. to offer a proposal during this round for increased access to Canada’s dairy market. Nor did Verheul think the U.S. would table proposals on auto rules of origin, investor-state dispute settlement and Chapter 19. Get more details .

Ross in trade journey through Asia... Commerce Secretary Wilbur Ross is in Beijing today to meet with Chinese Vice Premier Wang Yang and other high-level officials “to discuss a range of issues including increased market access for U.S. firms,” his office announced. Ross is leading efforts to address trade issues with China through a new “comprehensive economic dialogue.”

Cattle futures likely to face pressure today... While December live cattle finally closed the wide July gap to the upside on Friday, the market is likely to face pressure today as traders react to a Placements figure that came in well above expectations in Friday’s Cattle on Feed Report. Frozen beef stocks were also significantly higher than expected. But signs the cash market has put in a low will likely limit the market’s downside after the initial wave of selling.

Cash hog bids to remain under pressure amid hefty supplies... More near-term price pressure is likely for the cash hog market, so the lean hog market could face more pressure going forward. As the week progresses, traders will increasingly ready positions for the Quarterly Hogs & Pigs Report. Supplies are expected to remain hefty into year-end.

Weekend demand news... Jordan tendered to buy 100,000 MT of wheat.

Today’s reports:

8:00 a.m., Food Price Outlook September 2017 -- ERS
10:00 a.m., Weekly Export Inspections -- AMS
2:00 p.m., Poultry Slaughter -- NASS
3:00 p.m., Crop Progress -- NASS

First Thing Today: Consultant Says Weather Concerns May Be on the Horizon for South America

Thu, 12 Nov 2020 04:42:20 GMT

Good morning!

Corn lower, soybeans and wheat mixed overnight... Corn futures faced pressure overnight and the market is fractionally lower as of 6:35 a.m. CT. Soybean futures are also fractionally to a penny lower as a choppy overnight session winds down. SRW wheat futures are around a penny higher, HRW wheat is mixed, and HRS wheat is under light pressure. The U.S. dollar index is higher again today, while crude oil futures are posting light losses.

PF CCI: Slight improvement in CCI 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 1.18 points to 358.19 points, while the soybean crop rose 2.28 points to 348.95 points. Both crops are still rated roughly 27 to 28 points under year-ago levels, however. Get details here .

Consultant: Weather concerns on the horizon for South America... South American Crop Consultant Dr. Michael Cordonnier left his 2017-18 soybean and corn crop estimates for Brazil unchanged from week-ago at 109 MMT and 88 MMT. He notes that while planting is off to a slow start, the more important factor is what sort of weather the crop will encounter from November through January. The weather watcher Inmet calls for conditions to be drier and hotter than normal from central Brazil eastward from October through December. Cordonnier also made no changes to his Argentine soybean or corn crop pegs that stand at 55.0 MMT and 42.0 MMT, respectively. He reported drier weather has helped producers to finish harvest of the 2016-17 corn crop and to advance planting of the 2017-18 crop. But he adds that the 10-day forecast calls for wet weather to return.

North Korea and U.S. options... The U.S. says it has “four or five” options for resolving the North Korea standoff, National Security Adviser H.R. McMaster said, as tensions between the two nations continue to mount. White House spokeswoman Sarah Sanders confirmed that the U.S. had not actually declared war on Kim Jong Un’s regime after North Korea’s foreign minister said that President Donald Trump’s recent comments constituted such a declaration, impacting markets in the process.

Report defends U.S. farm programs... A comprehensive study by Brandon Willis, a lawyer, academic, and former administrator of USDA’s Risk Management Agency (RMA), examined the implications of the Heritage Foundation recommendations to eliminate the farm bill’s safety net, deeply cut and phase out crop insurance, make unilateral concessions in the context of the World Trade Organization (WTO), and repeal U.S. domestic trade laws. He called the report flawed because it “selectively uses data” to draw certain conclusions. Find his arguments here .

NAFTA 2.0 talks update... The chief U.S. North American Free Trade Agreement (NAFTA) negotiator said talks are progressing at a rapid pace, despite a lack of final U.S. proposals in several contentious areas. “We’ve been working very hard, so I don’t see a problem,” John Melle, assistant U.S. trade representative for the Western Hemisphere, said. “We’re moving across the board, so it’s very ambitious.” On Sunday, Canada’s chief NAFTA negotiator Steve Verheul said he did not expect the U.S. to make any proposals in Ottawa on sensitive areas. The Ottawa-based round continues through Wednesday, and the three countries have four more rounds scheduled this year in the hopes of reaching a deal by December.

The bulk of China’s bean buys came from Brazil in August... China imported nearly 8.448 MMT of soybeans in August, a 10.12% gain from year-ago. Brazil supplied 6.079 MMT of this business followed by Argentina at 1.379 MMT and Uruguay at 762,941 MT. But next month’s data should reflect more of a shift to U.S. supplies if daily sales announcements are any indication. From January through August, China has brought in more than 63.337 MMT of the oilseed, a 15.85% gain from year-ago. Brazil has made up 58.3% of these shipments, while the U.S. has supplied 31.2% of the business.

Chinese wheat, DDG and ethanol imports down from year-ago in August... China imported 277,000 MT of wheat last month, with the U.S. as its top supplier, according to official customs data. This was down 20.34% from year-ago levels. Its wheat imports for the first eight months of the year are running 29.31% ahead of year-ago, however, at nearly 3.141 MMT. Australia is the lead supplier, closely followed by the United States. Also of note, China’s trade restrictions on ethanol and distillers dried grains continue to limit its purchases of these byproducts. In August, it imported 4,095 cubic meters of ethanol, down 89.35% from year-ago, while it brought in just 8,161 MT of DDGs, down 98.4% from year-ago.

China delays new food import rules... China has pushed back the deadline on a new rule that would have tightened food import regulations by two years. The regulation that was set to take effect this week would have required all food imports to carry health certificates, even if the product is low-risk. Government and trade officials with both the EU and U.S. lobbied against the rules, saying they would have restricted billions of dollars worth of trade. The new standards are now set to take effect Oct. 1, 2019.

China official: U.S./China shared economic interests outweigh differences... Chinese Premier Li Keqiang said while meeting with Commerce Secretary Wilbur Ross in Beijing Monday that China and the United States’ shared economic interests far outweigh their differences, Xinhua reported. “As each other’s largest trading partner, the main trend of China-U.S. economic and trade ties is cooperation,” Li said while meeting with visiting U.S. Secretary of Commerce Wilbur Ross. China will work with the U.S. in the spirit of mutual respect and win-win cooperation to expand cargo and service trade and resolve frictions and differences through dialogue and consultation, Li said. The premier said China’s market will be more and more open and its business environment will get better and better. “We welcome more U.S. enterprises to invest in China,” he said. Get more details .

Much confusion regarding poppy seed situation in Egypt... Egypt’s supply ministry yesterday reported that the country had finished sieving a Romanian wheat cargo that contained poppy seed. But this confused traders who noted the process should take several more weeks. An ag ministry official later told Reuters that the process had not been completed. A decision has not yet been made whether to use or re-export the shipment. The market has been watching Egypt’s action on two cargoes held up due to the presence of poppy seed (the other being from France), speculating that the situation could be a repeat of its ergot debacle that ultimately cut the country off from trade last year.

Cattle futures tumble to start the week... Limits will be expanded for both live and feeder cattle futures after both markets were hammered to start the week as traders responded to bearish Cattle on Feed and Cold Storage data. The price pressure did bring the front month to within $1 of last week’s cash action, which took place at an average price of $108.51, according to USDA. Also of note, while Choice and Select boxed beef values climbed more than $2 to start the week, movement dropped off to just 86 loads.

Momentum is still to the downside for lean hog futures... Pork movement, on the other hand, was pretty good for a Monday at 348.06 loads on a 79-cent gain for the pork cutout value. But momentum is on the side of market bears as building supplies remain a weight on both the cash and futures markets. USDA will provide a quarterly update on the supply situation on Thursday. More choppy action is possible leading up to the release.

Overnight demand news... Algeria issued an international tender to buy a nominal 50,000 MT of wheat.

Today’s reports:

11:00 a.m., Cotton Ginnings -- NASS

First Thing Today: Wheat Trade Still Disrupted by Hurricane

Thu, 12 Nov 2020 04:42:13 GMT

Good morning!

Traders remove some weather premium overnight... Corn and soybean futures are mostly 2 to 3 cents lower amid some profit-taking after yesterday’s gains and as traders recognize that temps did not drop low enough overnight across the Upper Midwest to do any major crop damage. Winter wheat is also seeing some profit-taking, with most contracts down 2 to 5 cents. Spring wheat, on the other hand, is up 2 to 5 cents. The U.S. dollar index is marginally higher and crude oil futures are posting solid gains.

PF CCI: Minor dip in corn and bean 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 edged 0.68 points lower to 358.28 points, which is more than 28 points under year-ago levels. The soybean crop also declined slightly over the past week, sliding 1.22 points to 350.09 points. This is just over a 25-point decline from year-ago levels. Get more details here .

Canadian grain stocks data out today... Statistics Canada will likely report Canadian wheat stocks stood around 6.0 MMT at the close of the 2016-17 marketing year (July 31), according to analysts surveyed by Reuters. This would be up from year-ago, when stocks stood at 5.178 MMT. The market expects canola stocks to come in around 1.5 MMT as of the end of July, the smallest figure in four years. The report will be released at 7:30 a.m. CT.

Wheat trade still suffering in aftermath of hurricane... Hurricane Harvey-related destruction continues to disrupt wheat exports and will likely continue to do so for several more days. The week ending Aug. 31, federal inspectors did not check any wheat for export for Texas ports, which helped pull down total inspections for the week to 251,950 MT, the lowest figure since November. The week prior, inspections out of Texas totaled 219,219 MT. Texas’ railway tracks remain under water, according to BNSF Railway Co. Meanwhile, port operations are getting back underway across the Gulf, though many still have restrictions on vessel draft.

FEMA warns on funding as Harvey payouts going faster than expected... FEMA officials are warning that they could run out of funds for assistance to areas hit by Hurricane Harvey as soon as Friday, congressional aides have signaled. FEMA’s disaster relief fund had about $541 million left that could be used for Harvey relief as of Tuesday afternoon, a FEMA spokeswoman said. While the FEMA disaster fund contains about $1 billion, $473 million is deemed base funding devoted for potential future disasters and fighting fires. The pace of aid flowing thus far as been faster than expected, reflected by an increase in the request for an initial aid package by the Trump administration.

House votes this morning on emergency aid for Hurricane Harvey victims... The House will vote on appropriations of $7.9 billion in emergency fiscal 2017 funds -- an initial installment for Hurricane Harvey aid. could come as soon as today. Because it is designated as “emergency” and does not count against spending caps, even budget sticklers may get on board and vote for the measure. One possible hurdle: The White House and some Republicans want the aid tied to an increase in the federal debt limit, but a conservative bloc opposes that. The topics could be paired in Senate action later. Treasury Secretary Steven Mnuchin warned over the weekend that aid could be slowed unless the debt limit is increased to accommodate the extra borrowing his agency must do to pay for disaster relief.

Irma makes landfall... The Category 5 hurricane, one of the most powerful Atlantic storms ever recorded, hit the Caribbean island of Barbuda overnight and is expected to strike Puerto Rico and other islands today. Irma could reach Florida this weekend.

Brazil exporting corn at a rapid clip... Brazil’s corn exports climbed dramatically over the summer, with shipments of 1.0 MMT in June climbing to 3.3 MMT in July and 5.5 MMT in August, according to Thomson Reuters Trade Flows. Cumulative shipments for the three-month span are up 48% from 2015 and 105% from year-ago when drought clipped the crop. Analysts expect another strong showing in September as a record-large safrinha crop and limited storage provide incentive to ship corn in spite of low prices and high transportation fees. Indeed, the Sept. 5 Williams Line-up report shows that 4.8 MMT of corn exports have already been loaded this month, which already tops total shipments for September the past two years.

Brazil’s soybean shipments through August already top annual exports from 2015 and 2016... Brazil has shipped 56.3 MMT of soybeans between Jan. 1 and Aug. 31, according to Thomson Reuters Trade Flows. This is well above shipments of 46.3 MMT over this period last year or 43.2 MMT in 2015. The tally also tops annual shipments of roughly 49 MMT for both those years. So far, 73% of Brazil’s soybean exports have gone to China. Shipments of the oilseed have slowed since May, but they remain strong relative to recent years. In August Brazil shipped 5.4 MMT of soybeans. The latest Williams Lineup Report shows that 2.9 MMT of soybeans are scheduled to load and sail this month and that figure is likely to climb.

Final spending package for fiscal 2018 may take until Christmas... That is the message from House Majority Leader Kevin McCarthy (R-Calif.). Meanwhile, support for a Republican budget resolution could be tested in a closed-door House GOP conference today. The resolution promises to balance the budget in 10 years, but requires some deep cuts in entitlement programs, including agriculture, while making questionable assumptions about revenue growth. It also would bust the cap on defense spending by $72 billion -- triggering across-the-board cuts to military programs unless a new budget deal is reached to raise the cap. With none of the 12 annual bills that fund the government yet enacted, a stopgap continuing resolution will be required by Sept. 30 to extend current funding levels into the new fiscal year and avoid a government shutdown.

NAFTA update... Trade negotiators from the U.S., Canada and Mexico praised the work of their teams in the first weeks of talks on the North American Free Trade Agreement (NAFTA), sidestepping President Donald Trump’s threats to pull out of the deal. Top trade officials from the U.S., Canada and Mexico held a joint statement in Mexico City on Tuesday as the second round of talks concluded, highlighting their progress and shared commitment to finish talks this year. The officials said they have made headway and now have a deeper understanding of each other’s demands. Lighthizer still stressed a new deal must benefit “all Americans,” including those in manufacturing who lost their jobs as a result of NAFTA. He added, “I expect when I finish this agreement that the president will be supportive of it, because I’m not going to agree to things that he’s not supportive of.” The third round is scheduled to take place Sept. 23-27 in Ottawa.

Congressional leaders tell Trump to improve, not withdraw, KORUS... The chairmen and ranking Democrats of the House Ways and Means and Senate Finance committees issued a joint statement yesterday calling South Korea a “significant economic partner, our seventh largest export market, and a vital customer for U.S. manufacturers, services providers, farmers and ranchers.” The lawmakers called on Trump to push South Korea to improve its compliance with the agreement. “To be effective and constructive, however, we must not withdraw from the agreement while we do so,” the lawmakers added.

Decent post-holiday beef movement... Choice boxed beef cuts climbed $1.10 on Tuesday while Select fell 18 cents. Post-Labor Day movement was the strongest of the past week at 141 loads, which is encouraging. However, traders remain aware that the holiday marks the unofficial end to grilling season. Showlist estimates are up a net 4,000 head this week, which could boost packers’ bargaining power. But they are also enjoying very strong profit margins, which could limit their urgency to lower bids. Last week, sales took place at an average price of $104.66, according to USDA.

Traders work to narrow lean hogs’ discount to the cash index... On Tuesday there were strong gains in lean hog futures as traders worked to narrow futures’ discount to the cash hog index. Traders also noted mixed cash hog bids yesterday, as some packers found themselves in need of supplies and profit margins that are closing in on $40 a head gave them room to lift bids. Also of note, two new plants began slaughtering this week in Iowa and Michigan, increasing competition for hogs.

Overnight demand news... South Korea tendered to buy around 100,000 MT of GMO-free soybeans.

Today’s reports:

7:30 a.m., Canadian grain stocks -- StatsCan
8:00 a.m., Milk Cost of Production -- ERS
8:00 a.m., U.S. Bioenergy -- ERS
2:00 p.m., Latest U.S. Agricultural Trade Data -- ERS

First Thing Today: Irma Lashes the Caribbean as Florida Waits

Thu, 12 Nov 2020 04:42:13 GMT

Good morning!

Mixed price action as traders assess weather... Corn futures are down a penny amid some light profit-taking after a quiet overnight session. Soybean futures are up 4 to 5 cents thanks to concerns about the dry forecast through mid-month and unease about the impact of Hurricane Irma. Winter wheat futures are narrowly mixed, while spring wheat is up 3 to 5 cents. The U.S. dollar index is posting solid losses, while crude oil futures are facing light pressure.

Dry weather to persist... The National Weather Service forecast for Sept. 12-16 calls for conditions to remain dry across the Corn Belt and Plains, with the exception of Ohio where normal precipitation is anticipated. The temperature outlook is more varied. Warm weather is likely in the Dakotas, Nebraska and Minnesota, normal temps are likely for Iowa, and the rest of the Midwest along with the Central and Southern Plains are likely to see cool conditions, according to NWS.

Irma lashes the Caribbean as Florida awaits... The hurricane, one of the most powerful storms ever recorded, left chaos from Barbuda to Puerto Rico and is headed west to other islands today. At least 11 deaths have been reported. The storm is expected to reach Florida on Sunday. “I cannot stress this enough,” Gov. Rick Scott said on Wednesday. “Do not ignore evacuation orders."Irma is increasingly likely to target parts of the Florida peninsula as a dangerous hurricane this weekend,” according to the Weather Channel. “Parts of Georgia and the Carolinas could then be struck by Irma early next week.”

Trucking costs soar... Trucking costs in the U.S. Gulf Coast region are surging in the wake of Hurricane Harvey, the Wall Street Journal reports, as rigs get diverted to the Texas recovery effort and another storm approaches the Florida coast. The spot-market price to ship on a tractor-trailer from Dallas to Houston jumped 66% in the past week, according to online load board DAT Solutions LLC, the result of high demand for relief supplies and the severe imbalance of serving a region that’s producing little to pay for return trips. Diesel fuel prices also are rising fast because of shortages caused by the shutdown of refineries and delivery networks. Freight operators should get a boost as demand for construction materials grows with the rebuilding effort. As for Irma, freight railroads are working under a rail emergency situation and ports as far north as Savannah, Ga., are prepared to shut down if the storm turns up the coast.

Global wheat prices slip as cereal supplies build... Global food prices slipped in August as lower values for cereals, sugar and meat more than made up for increases in vegetable oil and dairy prices, according to the Food and Agriculture Organization of the United Nations (FAO). Its food price index dipped 2.3 points from July to August to 176.6 points. FAO expects global cereal production to hit a record in 2017, boosting global cereal supplies for 2017-18. “The bulk of the revision follows improved production prospects for wheat and coarse grains,” it explains. FAO now pegs global wheat production for 2017 at 748.8 MMT, up 8.9 MMT from July, as improved prospects for Russia offset downward revisions for the U.S. and Canada.

Beige Book update notes continued flat inflation... Several Federal Reserve districts mentioned a lack of inflation -- steady prices -- in their recaps released in the Beige Book report, the economic snapshot released two weeks prior to the conclusion of the Federal Open Market Committee. However, the overall summary on prices said, “Prices rose modestly overall across the country.” Wages are still not moving a lot as the update noted “limited wage pressures and modest to moderate wage growth.” So it appears the Fed will be still be grappling with the issue of inflation when it meets September 19-20 and will also have another hurricane to consider. Since no monetary policy shifts are expected, the start of the balance sheet trim, updated economic forecasts and the post-meeting press conference by Fed Chairwoman Janet Yellen will be the focal points.

White House said to assure KORUS exit off table... The White House “has assured key lawmakers that its threat to begin withdrawing from the U.S.-Korea Free Trade Agreement has -- for now -- been taken off the table,” Inside U.S. Trade reported, citing unnamed sources.

Trump makes a deal with Democrats... President Donald Trump bypassed members of his party on Wednesday, reaching an agreement with congressional Democrats to increase the debt limit and to finance the government until mid-December. GOP conservatives were very upset as were Republican leaders. Trump later confirmed that a continuing resolution and suspension of the debt limit until Dec. 15 would be added to the $7.85 billion Hurricane Harvey emergency aid bill (the House voted 419-3 on Wednesday to send the emergency spending package to the Senate.) “We have a very good meeting with Nancy Pelosi (D-Calif.) and Chuck Schumer (D-N.Y.),” he said. Get more details .

Data confirms France’s wheat crop in better shape than year-ago... France’s soft wheat crop is of high-quality this season, according to test results from the technical institute Arvalis. Seventy-four percent of the crop showed specific weights above the widely used commercial benchmark of 76 kg. per hectoliter, versus just 24% that made the cut last year. Protein levels are also solid, with 92% of the crop equal to or above 11.5%, a level used by importers like Egypt and West Africa. But just 65% of the crop has protein above 12%. Also, more of the crop has good Hagberg falling numbers than year-ago.

Indian mills to boost wheat imports near-term... From September to October, India will likely bring in roughly 800,000 MT of wheat from the Black Sea region, according to two trade sources cited by Reuters. Millers are expected to increase reserves amid concerns that tight domestic supplies as year-end approaches could lift prices. Even with the 10% import duty and cost and freight expenses, Black Sea wheat prices are similar to those for Indian new-crop wheat, according to one of the sources.

Japan to raise prices for imported wheat... Japan will sell imported wheat to domestic millers at an average price of 52,510 yen ($482) per metric ton from October to March, according to its ag ministry. This represents a 3.6% rise from the previous six-month period, as wheat prices have climbed in the U.S. and Australia alongside shipping rates. Plus the yen has weakened. Japan holds regular import tenders where it buys wheat from Australia, Canada and the U.S., which it then turns around and sells to millers at prices that are set twice a year.

Retailers buying some beef for fall features... Boxed beef movement surged to 168 loads on Wednesday on a 20 cent (Select) to 48 cent (Choice) rise in boxed beef values, signaling some buying for fall features is underway. This plus impressive packer cutting margins (nearly $150 a head) could lead to steady or better cash cattle trade, despite a slight uptick in showlist estimates this week. This week’s online Fed Cattle Exchange auction provided little guidance regarding cash direction as none of the cattle offered sold. So far, just a few hundred head have changed hands in Iowa around $103.

Added processing impacting hog market... The impact of increased processing capacity is showing up in strong daily slaughter numbers. Wednesday’s kill was impressive at 450,000 head, up 24,000 head from last year at this point. Meanwhile, cash hog bids were again mixed across the Midwest as competition has increased thanks to this added slaughter capacity. Packers are enjoying strong cutting margins topping $40 a head.

Overnight demand news... Jordan made no purchase in its tender to buy 100,000 MT of milling wheat or 100,000 MT of feed barley. But the country issued a new tender to buy 100,000 MT of hard milling wheat from optional origins. Turkey tendered to buy 60,000 MT of animal feed barley.

Today’s reports:

7:30 a.m., Drought Monitor -- USDA/NWS
9:30 a.m., Weekly Ethanol Production -- EIA
10:00 a.m., Livestock and Meat International Trade Data -- ERS
2:00 p.m., U.S. Agricultural Trade Data Update -- ERS
2:00 p.m., Broiler Hatchery -- NASS

First Thing Today: China Imports a Record Amount of Soybeans in August

Thu, 12 Nov 2020 04:42:13 GMT

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 (MT)	2017-18 (MT)
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

First Thing Today: Irma Pummels Florida

Thu, 12 Nov 2020 04:42:13 GMT

Good morning!

Grains lower, soybeans higher to start the week... Corn futures saw two-sided trade overnight but as of 6:35 a.m. CT most contracts are trading low-range with losses around a penny. Soybean futures are also trading low-range, but with gains of 1 to 2 cents. Wheat futures are 3 to 5 cents lower across all three flavors. The U.S. dollar index is slightly higher, as are crude oil futures.

Irma pummels Florida... After making landfall in the Florida Keys Sunday morning as a Category 4 storm, Hurricane Irma weakened as it traveled through the state’s west coast, with the latest reports downgrading it to a Category 1 storm with top winds of 85 miles per hour. Damage estimates have dropped to $49 billion from as high as $200 billion. Expected to be even more dangerous than the powerful winds are the storm surges that threaten Florida’s coastal cities. “The threat of catastrophic storm surge flooding is highest along the southwest coast of Florida, where 10 to 15 feet of inundation above ground level is expected,” the hurricane center said. The storms that have battered the southern United States are making it more difficult to read the economy’s pulse, with William Dudley, president of the New York Fed, warning that it could affect the timing of short-term rate increases. Get more details .

Warmth and rain in the forecast for the Midwest... Warm temperatures are likely across the bulk of the Midwest and Plains Sept. 16-20, according to the National Weather Service. It also calls for some precip for most of the Corn Belt, with the exception of Indiana and far southern areas where normal rainfall is anticipated. Texas and southern Oklahoma should be dry over this period while other areas of winter wheat country should see normal precip.

North Korea update... The U.S. is pressing for a United Nations Security Council vote by Monday on tough, sweeping measures against North Korea, including an oil embargo, the authorization to board its ships, and a freeze on the assets of the leader, Kim Jong-un. Russia and China are expected to block the resolution. The less-severe-than-anticipated developments in Florida and North Korea (no new missile launch) over the weekend helped the dollar recover from a 2015 low, while Treasuries and gold weakened.

President signs disaster aid, CR, debt ceiling bill... On Friday, President Donald Trump signed the hurricane emergency aid package that also addresses the debt ceiling and government funding through Dec. 8, Press Secretary Sarah Huckabee Sanders tweeted. The action came after House lawmakers cleared the bill by a 316-90 vote earlier in the day, with all 90 nay votes being Republican, in part because it bundled up the funding and debt ceiling suspension provisions with hurricane aid. The Senate passed the bill Thursday.

The week ahead... With the passage if the aforementioned measure, the focus now turns to rewriting the U.S. tax code by the end of the year and working on additional disaster aid funding. The House wants to complete work on an eight-bill appropriations measure for fiscal 2018, which begins Oct. 1. The Senate Ag Committee will continue its new farm bill hearings. Trump on Tuesday will meet with Malaysian Prime Minister Najib Razak at the White House. Razak is embroiled in a corruption scandal at home. Prior to the meeting, senior trade officials for both countries will meet, with discussions likely to touch on the U.S.'s $24.8-billion trade deficit with Malaysia for 2016. USDA’s Supply & Demand and Crop Production that will be released Tuesday are a big focal point for ag.

Ross is latest Trump official to warn on trade policy... Commerce Secretary Wilbur Ross said Friday that if talks to renegotiate the North American Free Trade Agreement (NAFTA) don’t benefit the United States, the president will withdraw from the trade pact. “That shouldn’t be a shock to anyone,” Ross said at a Washington Post event. Regarding ongoing NAFTA 2.0 negotiations, Ross said negotiators from the U.S., Canada and Mexico tackled the easiest issues in recent rounds, adding the strategy “is to try to build some momentum, a feeling of togetherness as you move into the harder issues.” Ross said it is “too early to really tell” whether Canada and Mexico are bargaining in good faith, noting that only 10 days of talks have been held so far, over two sessions. He also stressed that NAFTA 2.0 talks can’t “drag on too long because of the political calendar.” Read more from him .

Chinese inflation data surprises to the upside... China’s Consumer Price Index (CPI) was up 1.8% from year-ago levels in August, according to its National Bureau of Statistics. Traders had expected this gauge of inflation to rise just 0.2 points from July to 1.6%. This also marked the first CPI uptick in three months. The Producer Price Index also came in stronger than expected, climbing to 6.3% over year-ago, whereas analysts polled by Reuters had anticipated just a 0.1-point rise from July to 5.6%. A breakdown of the numbers shows food prices were down 0.2% from year-ago in August, largely due to a 13.4% year-over-year drop in pork prices.

Soybean shortfall means India may need to import more soyoil and palm oil... Indian officials and farmers expect an extended dry spell in key production areas to slash its 2017-18 soybean crop by around 20% from year-ago. Plus acreage was already down. The reduced supply situation likely means India, the world’s top edible oils importer, will need to boost its soyoil and palm oil imports in 2017-18. Its soymeal exports may also decline.

Canadian wheat crop not as bad as thought... With Canada’s spring wheat harvest nearing half complete, many expect Stats Canada to raise its 25.5 MMT total wheat crop peg. While yields have not been great, they have been better than expected, especially in Manitoba. But crop quality remains a concern. Protein levels have been very variable, maintaining concerns about a tight supply of high-protein wheat around the world.

Trade questions whether poppy seed is the new ergot for Egypt... Egypt’s quarantine authority is examining a 56,000 MT wheat shipment from France that is suspected of containing poppy seed, the second such cargo to be examined for such reasons. If they do prove to be poppy seeds, Egypt will reject the shipment and transfer the case to the general prosecutor, an ag ministry spokesman told Reuters. The situation has traders nervous, with some saying poppy seeds are “the new ergot” and an attempt by the country’s ag quarantine service to tighten up import rules after he lost his battle to fight the fungus last year.

Extended cash cattle negotiations result in mostly steady trade... Ideas the cash cattle market would bottom lifted futures last week, but cash negotiations extended until late in the the week. Late Friday cash cattle traded across the Plains around $105 -- steady with the week prior -- with a few sales taking place at lower prices of $103 in Iowa. But sales volume was light, especially in Texas and Kansas. That means some supplies could be carried forward into this week.

Cash hog market performing better than futures signal... Hurricane Irma could disrupt slaughter in the southeastern U.S. this week, but this should be temporary. Last week, cash hog bids were mixed across the Midwest, which signaled that futures’ discount to the cash index is likely overdone given added slaughter capacity. In fact, cash hog prices strengthened nationally on Friday, according to USDA.

Weekend demand news... An Israeli group of private buyers issued international tenders to buy up to 90,000 MT of corn from the Black Sea region, along with 50,000 MT of feed wheat and 20,000 MT of feed barley from optional origins.

Today’s reports:

10:00 a.m., Weekly Export Inspections -- AMS
3:00 p.m., Crop Progress -- NASS

After the Bell: Weather Concerns Lift Grain and Soy Markets

Thu, 12 Nov 2020 04:42:13 GMT

Corn: Corn futures settled 3 1/4 to 4 1/4 cents higher through the September 2018 contract, which was midrange for the day. Corn futures were supported by late-season weather concerns, export demand news and spillover from the soybean market. Weather concerns are driven by the cool, dry conditions that are expected to continue across much of the Corn Belt.

Soybeans: Soybean futures gapped higher on the open and didn’t look back. The market settled high-range with gains of of roughly 18 to 19 cents. Weather concerns along with recognition that price levels are encouraging strong value buying pushed the bean market higher today. The weather has been cool and dry across major producing states of late, whereas the crop could use a shot of rain and heat to finish strong.

Wheat: Winter wheat futures enjoyed gains today and the market ended anywhere from 1 1/2 to 10 cents higher, with most contracts notching gains in the upper half of that range. Spring wheat futures, on the other hand, settled 2 1/4 to 4 cents lower. Winter wheat futures benefited from some weather concerns today, with traders noting heat across the Southern Plains is drying out soils.

Cotton: Cotton futures finished sharply higher, with the December contract ending up the 300 point daily limit. Cotton futures were supported by weather concerns. Hurricane Harvey already damaged a portion of the U.S. crop in Texas and now it appears Hurricane Irma will be a threat to the Southeast cotton crop this week.

Cattle: Live cattle futures finished mixed today. The October and December contracts closed 72 1/2 and 10 cents lower, respectively, while far-deferred contracts favored a mildly firmer tone. Trade was two-sided in the cattle market coming off the holiday weekend. While there was light corrective buying at times, traders are still waiting on signs of a low in the boxed beef and cash cattle markets.

Hogs: Lean hog futures surged to start the week and the market ended 85 cents to $2.30 higher, with nearby contracts leading gains. This was high-range but off session highs. Fundamental analysis: Lean hog futures benefitted from efforts to narrow the discount nearby contracts hold to the cash hog index today. As of today’s close, the October contract is still nearly $9 below the cash index.

First Thing Today: Cool Temperatures Expected Early Next Month

Thu, 12 Nov 2020 04:42:10 GMT

Good morning!

Corrective short-covering overnight... Corn futures are steady to fractionally higher as of 6:30 a.m. CT after holding to a narrow range overnight. Soybeans are posting fractional gains. Wheat futures are up 1 to 3 cents, with the spring wheat market leading gains. The U.S. dollar index is firmer today, but it remains within a pronounced downtrend. Crude oil futures are slightly lower.

Cool temps expected early next month... The National Weather Service forecast for Sept. 4-8 calls for cool weather across the Corn Belt with the exception of western areas of the Dakotas and Nebraska where normal temperatures are anticipated. The coldest temps are expected for the eastern Belt. At this point, most crop watchers say a frost/freeze event is unlikely, but the forecast bears monitoring given the immaturity of this year’s crops. During this timeframe, the western Corn Belt is expected to be dry, with Illinois and Indiana seeing normal precip and Ohio expected to be wet.

U.S./China ag trade dispute focus at WTO... The World Trade Organization’s Dispute Settlement Body has a meeting planned for Thursday, including a U.S. challenge to Chinese agricultural import policy, which the U.S. claims is unfairly keeping out billions of dollars’ worth of foreign crops. China is widely expected to move to delay the start of this case. Under WTO rules China wouldn’t be able to block a second request for a panel. That would likely come at the next meeting of the Dispute Settlement Body, scheduled for Sept. 29. The U.S. filed a dispute challenging China’s tariff rate quotas (TRQs) for imports of rice, wheat and corn. Under the quotas, a low tariff rate applies to imports up to a certain quantity; if a country sends more than that amount, higher duties apply to the additional imports.

U.S. FY 2017 agricultural export, import forecasts raised... USDA has increased its forecast for the value of U.S. agricultural exports for fiscal year (FY) 2017 to $139.8 billion and imports to $116.2 billion, according to the latest Outlook for U.S. Agricultural Trade update. The levels now forecast by USDA would result in a trade surplus of $23.6 billion, versus a May forecast for a $22.5-billion surplus on forecast exports of $137 billion against $114.5 billion in imports. For FY 2018, USDA’s initial outlook is for exports valued at $139 billion and imports at $115.5 billion, both down from the revised FY 2017 levels. The FY 2018 forecast levels would result in a near-unchanged ag trade surplus of $23.5 billion.

Mexico’s Guajardo: End of NAFTA is a possibility... Mexico Economy Minister Ildefonso Guajardo told lawmakers in Mexico City that trade between the U.S. and Mexico would continue without NAFTA. “No one sits down to trade talks without a plan B,” Guajardo said. He said Mexico would not accept a NAFTA 2.0 deal that comes at too high a cost, and that Mexico can pass laws to reassure foreign investors that they are protected even without NAFTA. Some Mexican products would face high tariffs without NAFTA. Meanwhile, Mexico Foreign Minister Luis Videgaray and Guajardo are in Washington, D.C., for meetings on trade relations topics.

Harvey leaves some cattle stranded... There are an estimated 1.2 million cattle within Texas’s 54-county disaster area for Hurricane Harvey, estimates Texas A&M University Livestock Economist David Anderson. He added that given the time of year, there are also a lot of young calves in the disaster area. Many ranchers worked to move cattle to higher ground or northern areas of the state ahead of the storm. But some animals are now stranded by high water that is filled with alligators, venomous snakes and fire ants. Longer-term, hoof rot and mosquito-carried diseases will also be concerns.

Texas ranchers eligible for emergency aid after Hurricane Harvey… Ranchers whose pastures have been flooded by Hurricane Harvey, leaving cattle stranded or displaced, will get emergency assistance from USDA. There also are several state programs that provide assistance. At the federal level, the Emergency Assistance for Livestock, Honeybees and Farm-Raised Fish Program (ELAP) will provide support to ranchers. ELAP was included in the 2014 Farm Bill, authorizing up to $20 million in funds in a fiscal year. It covers losses not covered under the other disaster assistance programs such as the Livestock Indemnity Program (LIP), which provides benefits to livestock producers for livestock deaths in excess of normal mortality. LIP provides payments equal to 75% of the market value of the applicable livestock. LIP eligibility must also first be determined by USDA Secretary Sonny Perdue.

China to use subsidies to improve animal waste disposal... China will provide farmers with subsidies to build animal waste processing facilities to make fertilizers or to treat manure so it can more safely be disposed of, according to government plans announced Aug. 1. Beijing will also subsidize farmers’ efforts to install biogas plants that use methane to produce electricity. The ag ministry gave few details about the subsidies aimed at cutting down ag pollution and improving energy efficiency. Farmers researching the use of organic fertilizer will also get preferential treatment on loans, taxes, power use and land rent, reports Zhong Luqing, director of the fertilizer department at the ag ministry. China’s livestock farms generate roughly 4 billion MT of waste each year.

Beef market perks up... Both Choice and Select boxed beef values strengthened for the second day in a row Tuesday, with Choice rising 27 cents and Select surging $2.17. The spread between the cuts is narrow -- just 98 cents, premium Choice. Traders are optimistic that recent price gains could hint that retailers are gearing up for fall beef features.

Pork and cash hog markets improve... Pork movement surged to 415.37 loads, which is a welcome change from sub-250 load counts the past three days. This came on a 98-cent drop for the pork cutout value as a $9.43 drop in bellies offset gains for other cuts. Also encouraging, cash hog prices strengthened in the western Corn Belt and the Iowa/Minnesota market yesterday, though bids softened in the eastern Belt.

Overnight demand news... Egypt purchased 235,000 MT of wheat from Russia as well as 30,000 MT of wheat from Ukraine. South Korea’s corn processing industry association tendered to buy around 55,000 MT of optional-origin yellow corn. The country’s Major Feedmill Group has started talks to buy up to 65,000 MT of optional origin feed wheat and 55,000 MT of South American-origin soymeal. Tunisia tendered to buy around 100,000 MT of soft milling wheat from optional origins. Japan tendered to buy a total of 125,713 MT of food-quality wheat from the U.S. and Canada in its regular tender.

Today’s reports:

10:00 a.m., Farm Income Forecast -- ERS
9:30 a.m., Weekly Ethanol Production -- EIA
2:00 p.m., Agricultural Prices -- NASS
2:00 p.m., Broiler Hatchery -- NASS

First Thing Today: Dicamba-impacted Soybean Acres Estimated at 3.1 Million

Thu, 12 Nov 2020 04:42:10 GMT

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

First Thing Today: Treasury to Propose Cutting Off Trade with Countries Doing Business with North Korea

Thu, 12 Nov 2020 04:42:10 GMT

Good morning!

Soybeans lead gains overnight... Cool weather for early September lifted the corn and soybean markets overnight. As of 6:35 a.m. CT most corn contracts are 3 cents higher, while soybean futures are up 8 to 11 cents after a gap-higher start. Winter wheat futures are 4 to 6 cents higher in most contracts, while spring wheat is narrowly mixed. The U.S. dollar index is down slightly, while crude oil futures are posting solid gains.

North Korea claims test of ‘missile-ready’ nuclear bomb... North Korea said Sunday that it had developed a more advanced nuclear bomb with “great destructive power,” releasing photos of Kim Jong Un inspecting what it said was a hydrogen bomb that could be attached to a missile capable of reaching the mainland United States. North Korean state media said that the test was carried to test “the accuracy and credibility” of its “H-bomb to be placed at the payload of the ICBM.” North Korea tested its intercontinental ballistic missile for the first time in July, and its second test later the same month showed the rocket could theoretically reach Denver or Chicago. Analysts say the claims should be treated with caution, but the North’s nuclear capability is clearly advancing. Get more details .

Treasury to propose cutting off trade with countries doing business with North Korea... Treasury Secretary Steven Mnuchin promised to consider a sanctions package that may cut off “all trade and all other business” with North Korea’s trading partners after North Korea’s latest nuclear test, saying the rogue country’s behavior is “unacceptable.” He added that, We are going to strongly consider everything at this point and, again, I will draft a package for [President Donald Trump’s] strong consideration that would go as far as cutting off all trade and other business,” Mnuchin said in response to whether a package would also censure Chinese financial institutions and companies on Fox News Sunday.

Trump wants plans to withdraw from South Korea trade deal... Trump has instructed advisers to prepare a withdrawal from the Korea-U.S. (KORUS) free-trade agreement, a move that would raise economic tensions with the U.S. ally at a time both countries confront a crisis over North Korea’s nuclear weapons program. Under the terms of the KORUS pact, either side can pull out by giving 180 days’ notice. Negotiators from the U.S. and South Korea held several meetings over the summer with American officials leaving unhappy with what they felt was Seoul’s unwillingness to make significant changes to the KORUS. The president could decide to stay in the agreement in order to renegotiate its terms, but internal preparations for terminating the deal are far along and the formal withdrawal process could begin as soon as this week. Some believe the latest threat is a negotiating tactic to bring Seoul back to the bargaining table. Read more .

Warm in the western Corn Belt, cool in the east... More cool air moved into the the central and eastern U.S. early this week, and overnight lows in the 30s are possible in the Upper Midwest and Northern Plains early this week. However, no serious damage is expected. The National Weather Service forecast for Sept. 10-14 calls for warm temperatures in the western Corn Belt and into Wisconsin, with cool temperatures for the eastern Belt. Over this timeframe, dry weather is expected across the Midwest and Plains, with normal precip likely for Illinois and Indiana and wet weather expected in Ohio.

Cordonnier leaves yield estimates unchanged... Crop Consultant Dr. Michael Cordonnier left his corn yield estimate at 166 bu. per acre and he has a neutral bias going forward. He noted concerns about the recent trend of cool, dry weather for the central Corn Belt with more of the same expected early this month, which he says increases the risk the crop will run out of water in addition to slowing crop development and increasing the threat of frost. Cordonnier also left his soybean yield estimate unchanged at 48 bu. per acre and he has a neutral bias toward the crop. He expressed similar concerns about cool, dry weather affecting the bean crop in the central Corn Belt, but says recent rains likely helped the crop in southern and far eastern growing areas.

Consultancy raises grain crop and export forecast for Ukraine... UkrAgroConsult raised its 2017-18 grain export projection by 3.4% to 42.06 MMT, noting the crop was even bigger than expected. It raised its grain production estimate by 1.5 MMT to 63.2 MMT, and said the wheat crop could total 26 MMT, just 100,000 MT shy of last year’s crop and up 1 MMT from its crop peg last month. Meanwhile, the country’s grain traders’ union said it expects Ukraine to have an exportable wheat surplus between 16 MMT and 17 MMT in 2017-18, with production pegged at 26.6 MMT.

Congress returns to a full agenda... Lawmakers return from their long summer recess to must-pass issues that have they lingered for months. One exception is aide for Hurricane Harvey victims, with the White House sending the initial aid requests late Friday. The House will vote on a shutdown-avoiding spending package that pulls together all eight appropriations bills that weren’t passed before the recess. Meanwhile, an across-the-board, stopgap spending measure known as a continuing resolution (CR) will be necessary to prevent a shutdown, as none of the 12 spending bills for the new fiscal year beginning Oct. 1 have been sent to the president. By the end of the month, Congress must come up with a plan to raise or suspend the nation’s debt limit to steer away from a default. Click here for more congressional issues in the month(s) ahead. Also of note is a likely decision by Trump soon that he will end protections for young immigrants who were brought into the country illegally as children (DACA), but with a six-month delay.

EPA reportedly considers a cutoff date for dicamba usage... The Environmental Protection Agency (EPA) is considering a ban on spraying the ag herbicide dicamba after a set cutoff date, possibly sometime during the first half of 2018, according to state officials advising the agency, Reuters reports. This comes amid concerns that drift of the chemicals has damaged soybeans and other crops this season.

Beef market in focus... Traders will monitor the boxed beef market for a read on clearance of red meat over the long holiday weekend. If clearance is strong, retailer buying should be solid this week. But since Labor Day marks the unofficial end of grilling season, retailer buying may not last long.

Lean hog futures start week at double-digit discount to the cash index... Supplies are building seasonally, which has been a weight on the lean hog market and kept momentum on the side of market bears. But traders could work to narrow futures’ wide discount to the cash hog index. While the index has softened, losses in futures have far outpaced those of the cash hog market.

Overnight demand news... Algeria tendered to buy a nominal 50,000 MT of durum wheat.

Today’s reports:

10:00 a.m., Weekly Export Inspections -- AMS
2:00 p.m., Dairy Products -- NASS
3:00 p.m., Crop Progress -- NASS

First Thing Today: Rains to Provide Some Relief Later This Week

Thu, 12 Nov 2020 04:42:07 GMT

Good morning!

Two-sided trade to start the week... Corn futures are fractionally lower to start the week, while soybeans are up 3 to 4 cents. Winter wheat futures are down 1 to 3 cents, while spring wheat futures are mostly 1 to 4 cents higher. The U.S. dollar index is just above unchanged, while crude oil futures are marginally lower.

Rains to provide some relief later this week... As expected, conditions remained dry across the bulk of the Midwest and Northern Plains over the weekend, with temperatures climbing into the upper 90s to 100-degree range for the far western Corn Belt and Northern Plains. A cold front is expected to bring some needed rains to the Corn Belt and the Dakotas later this week, but elevated temps are expected to continue and Montana will likely miss out on rains. The National Weather Service forecast for July 22-26 calls for heat across the Plains and Midwest and dry weather over key spring wheat producing states. Rains are expected to favor the eastern Corn Belt over that timeframe.

NOPA members expected to report second highest June crush on record... Members of the National Oilseeds Processors Association (NOPA) will likely report they crushed 143.093 million bu. of soybeans in June, the second highest figure on record for the month, according to traders surveyed by Reuters. In May, NOPA members reported a crush of 149.246 million bu., which topped expectations. Analysts expect members to report soyoil stocks around 1.714 billion lbs. at the end of June, down 35 million bu. from the month prior. The report will be released at 11:00 a.m. CT.

Budget markup this week... The House Budget Committee this week should finally hold a markup session on the budget resolution, a key link for other must-have issues like tax reform. The measure would also have farm bill implications if as expected the measure includes mandatory spending cuts relative to the food stamp (SNAP) program. Cuts of $8 billion to $10 billion have been mentioned, along with worker requirements, with some sources saying some or all of any such “cuts” could be moved back into the program come farm bill time to aid existing food stamp participants. House GOP leaders are eying putting all the annual appropriations packages together in one big omnibus spending plan after all the bills get completed next week.

Senate again delays action on health-care reform bill... On the Senate side, health-care reform will no longer be an attention point in the wake of Sen. John McCain (R-Ariz.) having surgery to remove a blood clot and he will not be in Washington this week as he recovers. Senate Majority Leader Mitch McConnell (R-Ky.) said the chamber would “defer” action on health care as a result.

NAFTA 2.0 focus... A House Ways & Means subcommittee on Tuesday will look at the coming NAFTA 2.0 negotiations. The negotiating objectives for the North American Free Trade Agreement will be laid out by the Trump administration, likely released today by U.S. Trade Representative Robert Lighthizer.

Dry weather curbing Australian wheat crop prospects... Between April 1 and June 30, Australia’s west and east coast regions that grow the bulk of the country’s wheat have received less than half their normal rainfall, according to data from the Australian Bureau of Meteorology. And the forecast is expected to remain dry through September. As a result, some crop watchers are calling for Australia’s wheat crop to fall more than 20% shy of official forecasts for a crop of 24.1 MMT. Dry weather has also raised crop concerns in China, Russia, Europe and the U.S.

Speculation more high-quality Chinese wheat could trim its imports of the grain... Good weather during the growing season and harvest helped boost the quality of China’s wheat crop, according to Wang Ping, deputy director of the market department at the country’s ag ministry. But he said that while the increase in good-quality wheat in China could trim imports a bit, supplies of such wheat are still tight in China. Earlier this month, China National Grain and Oils Information Center estimated the country would bring in 3 MMT of wheat in 2017-18, a 38% drop from year-ago.

Steady Q2 economic growth for China... China’s economy maintained its momentum last quarter, matching the 6.9% growth rate in the first quarter. Consumer spending, factory output and investment were all strong, while retail sales recorded their fastest expansion since December 2015. Local markets stayed in the red, however, weighed down as a major once-in-five-years government work meeting indicated Beijing was looking to increase control over the economy.

China approves two more GMO crops for import... China has approved two more genetically modified (GMO) crops for import, the country’s ag ministry announced today -- the second such move in the past month. As part of its 100-day trade talks with the United States, China promised to speed up biotech approvals. Beijing gave the green light to Syngenta’s 5307 insect-resistant corn sold under the Agrisure Duracade brand and Monsanto’s 87427 glyphosate-resistant corn, which is sold under the Roundup Ready brand. Four other products owned by Monsanto, Dupont and Dow are still awaiting approval. The decision took effect July 16 and will last three years.

CFTC data confirms aggressive short-covering last week... For the first time this growing season, hedge funds and other money managers turned bullish on the corn, wheat and soybean markets. The latest data from the Commodity Futures Trading Commission shows speculators aggressively covered short positions amid weather concerns last week. Corn saw the most dramatic shift, and speculators now have an all-time record long position in HRW wheat. Last week’s short-covering in soybeans and soybean meal also set new records.

Cash cattle prospects in focus... Cash cattle prices strengthened last week, catching some market watchers off guard. Strong gains in response helped futures to settle in line with the low end of last week’s $118 to $121 cash action. Whether showlist estimates and boxed beef action points to additional cash gains will be key to price action this week.

Lean hogs well below cash market... Cash hog prices slipped much of last week, fueling ideas the cash market has put in a seasonal top. But with August futures at a double-digit discount to the cash hog index, followthrough selling in futures could be limited.

Weekend demand news... Jordan tendered to buy 100,000 MT of hard milling wheat from optional origins. Taiwan issued an international tender to purchase 105,150 MT of grade 1 milling wheat from the United States.

Today’s reports:

10:00 a.m., Weekly Export Inspections -- AMS
2:00 p.m., Feed Grains Yearbook tables -- ERS
3:00 p.m., Crop Progress -- NASS

First Thing Today: Weekend Rains Pressure Grain and soy Markets

Thu, 12 Nov 2020 04:42:07 GMT

Good morning!

Weekend rains pressure grain and soy markets... Corn futures are down 6 cents and soybeans are posting losses around 16 to 17 cents after weekend rains. Winter wheat futures are down 5 to 7 cents, while spring wheat is 4 to 9 cents lower to start the week. The U.S. dollar index and crude oil futures are both marginally lower.

Rains fall over the weekend, though some dry spots remain... Over the weekend, rains fell across much of the Midwest, but accumulation varied widely, with southern and western Iowa, eastern Nebraska, northern Missouri and far southern Illinois remaining on the dry side. Rains were most significant from eastern Iowa to northern Indiana and in central and southeastern Ohio. More rains are possible for the Midwest midweek. A heat advisory remains in effect for southwest South Dakota today, but cooler temps are expected for the Corn Belt and Northern Plains from July 29 to Aug. 2, according to the National Weather Service. However, the precip outlook is dry for these areas as the calendar flips to August.

Week ahead features spending bill action, possible health care vote, FOMC meeting... The House returns for one last session before the August recess. A four-bill “minibus” spending package is the major item of business expected on the floor, with many amendments and late-night votes expected. Over in the Senate, appropriators are expected to continue to mark up spending bills, and senators could take a procedural vote on health care legislation. In other events next week, the House ag panel on Wednesday has a hearing on reworking the North American Free Trade Agreement, while the Senate ag panel will hold a hearing Tuesday on risk management tools for the 2018 Farm Bill. The Federal Reserve Open Market Committee (FOMC) holds a two-day meeting (Tuesday and Wednesday). No interest-rate policy change is expected.

Spring wheat tour starts today... The Wheat Quality Council’s U.S. spring wheat tour kicks off Monday in Fargo, North Dakota today. Tuesday brings the first day of yield estimates, with final yield estimates issued Thursday around 1 pm CT.

Crop issues lead to a surge in Chinese corn buys for June... China imported 380,000 MT of corn in June, according to customs data, a dramatic six-fold increase from year-ago and well above May’s 42,219 MT. China’s ag ministry slashed its corn crop estimate to the lowest level in four years in June in response to drought that damaged crops and caused some farmers to shift some acres to other crops. In addition, heavy rains in southern areas of the country snarled grain transport, pushing up freight prices and further tightening supplies. China’s imports of ethanol and distillers dried grains remained minimal as restrictive tariffs remain in place. But its ethanol exports surged to 18,324 cubic meters, 10 times year-ago levels.

Chinese bean buys well above-year-ago halfway through 2017... China imported nearly 7.687 MMT of soybeans last month, which was a 6.74% decline from year-ago levels. Brazil supplied 6.418 MMT of that total, with Argentina shipping China 712,845 MT of soybeans last month. China’s soybean imports for the first half of 2017 stand at 44.808 MMT, up 14.19% from year-ago. So far this calendar year, the U.S. has shipped Brazil 19.062 MMT of beans, a 17.05% gain from year-ago. Brazil’s shipments to the country are also up from year-ago at nearly 23.196 MMT.

China bringing in a lot more cotton than last year... China imported 72,413 MT of cotton in June, a marginal decline from year-ago, with the U.S. supplying 28,714 MT of that business, a gain of 23.2% from year-ago. Halfway through the calendar year, China has brought in 639,057 MT of the fiber, a 48.25% surge from year-ago. The U.S. has supplied 360,597 MT of that cotton, representing a 206.39% surge from shipments at this point in 2016.

International Monetary Fund (IMF) downgrades its U.S. and U.K. growth projections... The IMF cut its U.S. growth projection to 2.1% from 2.3% for 2017 and to 2.1% from 2.5% for 2018, citing both weak growth in the first quarter of this year and the assumption that fiscal policy will be less expansionary than previously expected. The report cites “difficult-to-predict U.S. regulatory and fiscal policies” and the continued uncertainty surrounding the Brexit negotiations as key factors. The IMF forecast global economic growth of 3.5% for 2017 and 3.6% for 2018, unchanged from its April outlook.

Wanting to boost trans-Atlantic trade after Brexit... U.K. International Trade Secretary Liam Fox will hold talks with U.S. counterpart Robert Lighthizer today and with Mexico’s Economy Minister Ildefonso Guajardo later in the week. Fox says a transitional agreement would help U.K. businesses making investment decisions but that such a deal would need to end before the country’s next election in 2022.

Bearish report data could outweigh better-than-expected cash action... August live cattle futures start the week at nearly a $4 discount to cash cattle trade that got underway Friday in across the Plains around $120. Of note, extreme heat on the Central and Southern Plains late last week and through the weekend stressed livestock. But buying interest may be limited as USDA’s Cattle on Feed Report showed the number of cattle on feed and marketings above expectations (well above for placements). In addition, USDA’s Cattle Inventory Report showed more herd expansion than we expected.

Cash hog prices softened last week... The cash hog market posted the first weekly decline since late April last week, signaling the market may have put in a seasonal high right on schedule. August futures already have a hefty cash drop factored in, which should limit pressure on futures.

Overnight demand news... Saudi Arabia bought 900,000 MT of animal feed barley. Algeria issued an international tender to buy a nominal 50,000 MT of milling wheat from optional origins, but the country often buys more than it tenders for. Zambia will export 100,000 MT of corn to three east African states. Bangladesh tendered to buy 50,000 MT of wheat. Jordan issued a new tender to buy 100,000 MT of animal feed barley from optional origins.

Today’s reports:

10:00 a.m., Weekly Export Inspections -- AMS
2:00 p.m., Cold Storage -- NASS
3:00 p.m., Crop Progress -- NASS

First Thing Today: Firm Pegs Corn Crop Well Below USDA

Thu, 12 Nov 2020 04:42:07 GMT

Good morning!

Corrective trade lifts grain and soy futures overnight... The grain and soy markets enjoyed some corrective short-covering overnight. As of 6:30 a.m. CT, corn futures are mostly up 2 to 3 cents, soybeans are 5 to 6 cents higher, and wheat futures are up 2 to 4 cents in most contracts. The U.S. dollar index is marginally lower while crude oil futures are marginally higher.

Cool, wet forecast for much of the country... The National Weather Service forecast for Aug. 6-10 calls for cool, wet conditions across the bulk of the country. The exceptions include the Northern Plains where stressful dryness is likely to continue and areas west of the Rockies where heat is expected. The forecast is likely to remain a source of pressure for the corn and soybean markets.

Firm pegs corn crop well below USDA... INTL FCStone on Tuesday estimated the U.S. corn crop will yield an average 162.8 bu. per acre this year for a 13.590 billion bu. crop. The brokerage estimates the U.S. bean crop will yield 47.7 bu. per acre for a 4.235 billion bu. crop. For comparison, USDA in July estimated the U.S. corn crop at 14.255 billion bu. on an average yield of 170.4 bu. per acre. For soybeans, the department estimated production at 4.260 billion bu. with an average yield of 48.0 bu. per acre.

Uneven monsoon rains causing problems in India... While monsoon rains have brought India 1% more rain than normal so far this season, some areas are dealing with drought while others are dealing with flooding since distribution has been erratic. This has raised concerns about the country’s summer crops and led to talk India may need to increase imports of edible oils, sugar and pulses while restricting its exports of cotton, rice and feed ingredients. The India Meteorological Department details that while 58% of the country has received normal rainfall this year, the remaining 42% has received either excess of deficient rains.

Traffic again flowing on Mississippi River... The Mississippi River reopened to vessel traffic on Tuesday afternoon after a barge collision forced its closure just north of St. Louis for around 14 hours, according to the U.S. Coast Guard. Repairs to the lock were reportedly completed faster than anticipated.

Congress has a lot to do on a tight schedule... There are seven legislative days in the Senate until the August recess. There are just 12 days with both chambers in session until the end of the fiscal year on Sept. 30. Issues in focus include the need for a fiscal year 2018 budget, budget resolution and a debt-limit hike. GOP leaders have begun their multi-month focus on tax reform.

Administration readying to probe China’s trade practices... The White House is preparing to investigate China’s trade practices and suspected violations of American intellectual property, according to reports. He Weiwen, a former Commerce Ministry official and longtime trade expert who is now a senior fellow at the Center for China and Globalization, a Beijing research group, told the New York Times that the Chinese government would study any American trade case before deciding how to respond and whether to seek intervention from the World Trade Organization. “China thinks that the bilateral trade relation is governed by WTO rules, not American domestic law,” He said.

Democrats offer Cuba trade plan amid hurdles in Congress... Lifting the economic embargo against Cuba is the goal of legislation offered by a group of Democratic senators. “It is well past time for the United States to abandon the failed policy of trying to isolate Cuba,” Senate Finance Committee Ranking Member Ron Wyden (D-Ore.) said. “Decades of experience have proven the embargo will never improve the lives of the Cuban people. Instead, this policy only serves to shut U.S. exporters out of a natural market for American agricultural and manufactured goods.” The so-called U.S./Cuba trade Act of 2017 has little chance of becoming law.

EPA now looking into dicamba situation... Directions on use of the chemical dicamba are being reviewed in the wake of hundreds of reports of crop damage from chemical drift, a spokesperson for the Environmental Protection Agency (EPA) confirmed to Reuters. “We are reviewing the current use restrictions on the labels for these dicamba formulations in light of the incidents that have been reported this year,” said EPA spokeswoman Amy Graham said. EPA approved new formulations of dicamba late last year for two years as older formulations were known to drift from their initial target field. Scores of states are investigating damage reports from dicamba and some states have taken action to either bar its use or set restrictions on conditions under which it can be used.

Ethanol producers looking to alternative uses... Yesterday, Archer Daniels Midland Co. and Green Plains Inc. both said they will convert some fuel ethanol capacity into beverage and industrial alcohol production in addition to idling some mills as the ethanol producers continue to struggle with overcapacity and thin margins. In June, Pacific Ethanol announced it would by a beverage grade facility in Illinois.

ICAC expects slight decline in ending stocks from 2016-17 levels... The International Cotton Advisory Committee (ICAC) yesterday raised its 2017-18 global cotton production forecast by 320,000 MT from July to 24.89 MMT, which is a 1.860-MMT drop from year-ago levels. But consumption is also expected to climb from year-ago, which is expected to contribute to a 100,000 year-over-year decline in ending stocks to 18.80 MMT.

Stock market gains help lift cattle futures... The cattle complex enjoyed solid gains yesterday as traders noted the ongoing surge in the equities markets and futures’ discount to the cash index. And after a slow start to the day in terms of beef movement, load counts improved to 121 by the end of the day on mixed prices. Meanwhile, traders are still waiting for cash cattle trade to get underway.

Some positive signals for lean hog market... The pork cutout value fell $1.11 yesterday and movement picked up to an impressive 399.86 loads. Also encouraging, cash hog bids were mixed on Tuesday, with bids climbing in the western Corn Belt and Iowa/Minnesota markets but softening in the eastern Belt.

Overnight demand news... Japan says it will import 39,540 MT of feed-quality wheat and 14,345 MT of barley for livestock use via a simultaneous buy and sell auction. Bangladesh issued an international tender to buy 50,000 MT of milling wheat.

Today’s reports:

9:30 a.m., Weekly Ethanol Production -- EIA
2:00 p.m., Broiler Hatchery -- NASS

First Thing Today: Gains Overnight as Traders Remain Focused on the Weather

Thu, 12 Nov 2020 04:42:07 GMT

Good morning!

Gains overnight as traders remain focused on the weather... Corn futures are up 2 to 3 cents in most contracts while soybeans are up 5 to 6 cents as rainfall was light and spotty across Iowa yesterday and more dry weather is expected as the calendar flips to August. Spring wheat futures are up 4 to 8 cents, while winter wheat is mostly around 4 cents higher. The U.S. dollar index is again extending its multi-month slide. Crude oil futures are also facing light pressure.

Export sales report on tap... USDA will release its weekly update on export sales activity at 7:30 a.m. CT. Traders expect the report to show corn sales ranging from 400,000 MT to 900,000 MT, soybean sales between 400,000 MT and 1.3 MMT, wheat sales of 350,000 MT to 550,000 MT, soymeal sales ranging from 50,000 MT to 225,000 MT and soyoil sales between 5,000 MT and 25,000 MT. These tallies include expected old- and new-crop business combined.

Day 2 of wheat tour finds average yield down 10.8 bu. per acre from average... On Day 2 of the Wheat Quality Council’s spring wheat tour through central and northwest North Dakota, scouts measured an average yield of 35.8 bu. per acre, which was down from 46.9 bu. per acre a year ago and 46.6 bu. per acre for the five-year average. The average durum yield stood at 34.4 bu. per acre versus 45.5 bu. per acre last year and 41.0 bu. per acre for the five-year average. Dave Green, the Wheat Quality Council’s executive vice president, reported that “the early-planted stuff looks the toughest,” adding that later-planted fields could still improve if temperatures don’t get too hot. Abandoned or baled wheat fields are not incorporated into the yield estimates. But Green says the tour is having each route make an estimate on the abandonment percentage, and that will be presented to everyone when the final numbers are released later today.

Trump advances WOTUS repeal... Today begins a 30-day comment period on withdrawing the Obama implemented waters of the U.S. (WOTUS) rule. The Environmental Protection Agency and Army Corps of Engineers are publishing the proposal in today’s Federal Register. It would rescind the existing WOTUS rule and reinstate the jurisdiction of the Clean Water Act the way it existed before 2015. A new WOTUS rule is expected by late this year or early in 2018. Environmental groups and lawmakers have urged a longer comment period than 30 days. The repeal rule is seen as a back stop in case the Supreme Court determines the 6th Circuit didn’t have authority over the case and the hold is lifted.

AGCO buys Monsanto’s Precision unit that Deere was nixed from buying... AGCO Corp., the third-biggest U.S. agricultural machinery maker, agreed to buy Monsanto Co.'s Precision Planting LLC equipment business less than three months after Monsanto nixed a $190-million deal with Deere & Co. for the unit. Terms of AGCO’s deal to buy the unit from Monsanto’s subsidiary agricultural technology company Climate Corp. weren’t disclosed, AGCO said in a statement.

Japan may raise tariff on frozen beef as imports rise... Tariffs on frozen beef imports from countries without an economic partnership agreement (EPA) with Japan may be raised to 50% from the current 38.5% rate, Tatsuya Haruna, deputy director at the agriculture ministry’s livestock promotion division, said Wednesday. Beef suppliers that may be affected include the U.S., Canada, New Zealand and European Union nations. Australia, the top beef supplier to Japan, has an EPA agreement with it. Tariffs will be raised if frozen beef imports in the three months through June rise by 17% from the same period last year. It would be the first time in 14 years if triggered, and will be based on Japanese trade data due out Friday.

China bans beef from some Australian processors... China has temporarily banned beef products from six Australian processors due to concerns about labeling non-compliance involving meat from Australian processors that include two facilities from Brazil’s JBS SA. Australia’s trade minister said there may be “very significant amounts of trade” involved in the ban, including shipments already on their way to China, according to ABC. But Australia is working to quickly resolve the issue.

South Korea downgrades bird flu alert status... South Korea’s ag ministry says that the risk from highly pathogenic bird flu has fallen, with no new cases reported since June 19. Therefore, on Friday it will lower its alert status by one notch from the highest level. The nation will continue to monitor the situation and disinfect farms through September. Bird flu decimated more than a fifth of the nation’s poultry flock since it was first detected in November 2016.

Cash cattle move at lower levels... Cash cattle trade picked up in Kansas and Nebraska yesterday at $117, with Iowa and Texas seeing a few hundred head trade for prices ranging from $117 to $118. This is steady to down from last week’s action that ranged from $118 to $120. The August contract opens today’s session roughly $3 below the low end of this week’s cash trade. This could spur some corrective trade in the market today.

So far, just modest declines for cash hog index... Cash hog prices softened in the western Corn Belt but strengthened in the east, lifting the national weighted average cash bid yesterday. The cash hog index has slipped a bit in recent days, but it remains well above where futures are trading, signaling they may have overdone it to the downside. The pork cutout value dropped $1.96 yesterday, but it remains just above the $100.00 per cwt. threshold. Movement was again strong at 342.46 loads.

Overnight demand news... Jordan made no purchase in its tender to buy 100,000 MT of wheat. South Korea bought around 55,000 MT of soymeal, likely from South America. Iran made no purchase in its tenders to buy 200,000 MT of barley and 200,000 MT of corn.

Today’s reports:

7:30 a.m., Drought Monitor -- USDA/NWS
7:30 a.m., Weekly Export Sales -- FAS
2:00 p.m., Livestock & Meat Domestic Data -- ERS

First Thing Today: Rains Fall, But Weather Concerns Remain

Thu, 12 Nov 2020 04:42:03 GMT

Corn starts week under pressure, but soybeans and wheat hold onto gains... Corn futures faced pressure overnight and the market is currently trading high-range and down 4 cents. Soybean futures traded in a wide range overnight, and as of 6:30 a.m. CT most contracts are up 3 to 4 cents. Winter wheat futures are fractionally higher, while spring wheat are up 3 cents. The U.S. dollar index is marginally lower, while crude oil futures are up slightly.

Rains fall, but weather concerns remain close at hand... Rain fell across most of the Midwest and Northern Plains over the weekend, but accumulation was erratic. The heaviest precip amounts were in eastern areas of the Corn Belt. Cooler temps have moved into the region, diminishing moisture needs. Two systems are expected to bring additional rainfall to the Midwest this week. But looking farther out, there is concern that a ridge of high pressure could move into the Plains and Midwest as the calendar flips to July, bringing high temps and limiting rainfall, says World Weather Inc.

China may make July announcement to buy record volume of U.S. soybeans... The U.S. Soybean Export Council says the Chinese Ministry of Commerce may make a commitment to buy a record volume of U.S. soybeans when its officials are in Iowa next month. Members of the ministry, a delegation due to sign an accord in Des Moines on July 13, have discussed the possibility with the council’s top representative in China, said spokeswoman Lisa Humphreys of the council. A record commitment would exceed the 13.4MMT it agreed to buy in February 2012, also at a ceremony in Des Moines. The delegation will also tour U.S. farms and port facilities in places including Seattle, while a U.S. agricultural-trade delegation will visit China in September, according to the council.

EPA reportedly reevaluating proposed 2018 advanced biofuel mandate... Some in the oil industry have raised concerns regarding advanced biodiesel mandates and have lobbied the Environmental Protection Agency (EPA) to also lower cellulosic ethanol targets to better match production. This apparently led to a pullback announcement on Renewable Fuel Standard (RFS) volume requirements late last week, sources signal. The Office of Management and Budget reportedly had completed vetting the RFS proposal and initially authorized EPA to release proposed mandates. However, some sources speculate the delay could allow an announcement to coincide with President Donald Trump’s planned visit June 21 to Cedar Rapids, Iowa.

Chief ag trade negotiator for USTR announced… Greg Doud, a former Senate Agriculture Committee staffer with farm bill experience, is Trump’s pick to serve as chief agricultural negotiator for the U.S. Trade Representative’s Office. Doud is currently president of the Commodity Markets Council.

Budget work a focal point this week... Some agriculture/food policy cuts could be part of a GOP leadership budget proposal that could surfaced this week. If Republicans in the House concur, it could for the first time in years be able to pass spending bills without the help of Democrats. But even if the House GOP plan is approved, Senate Democrats would have leverage on the spending bills because Republicans lack the 60 votes required in that chamber to pass spending bills. Other focal points this week will include any additional details on Trump’s trade policy agenda, his trip to Iowa and the results of a Georgia House election. The battle to replace Republican Tom Price, Trump’s Health and Human Services secretary, has been the most expensive House race in history. Get more details .

Tax overhaul speech this week... House Speaker Paul Ryan (R-Wis.) plans to make a major speech on tax overhaul to the National Association of Manufacturers in Washington on Tuesday, as Ryan and his team mark the one-year anniversary of the unveiling of the “Better Way” blueprint.

U.S. beef a hot commodity in China... U.S. beef is in high demand in China now that the 14-year ban on the product has been lifted. “The number of inquiries to our exporters number in the hundreds, if not low thousands, since the announcement of the agreement,” says Joel Haggard, senior vice president for the U.S. Meat Export Federation in Asia-Pacific. China’s total beef demand has been sharply rising, and U.S. beef is expected to be a hit both in terms of quality and price. U.S. beef is expected to hold a price advantage to similar cuts of premium Australian meat because of low grain prices in the United States. But there are still some limits on Chinese beef buys, meaning American beef shipments will roll in slowly to start.

China still working to build its hog herd... China’s central Hunan province took delivery of 1,012 American boars on Sunday, signaling producers there continue to build herds. This comes despite talk of overcapacity and slowing demand that are expected to hurt profits next year. The hog imports are meant to improve the quality of the local breeding swine, according to Wang Xinwu, deputy head of the province’s inspection and quarantine bureau.

Futures start the week below cash cattle market... Futures start the week at a discount to last week’s cash cattle trade and near oversold territory, but momentum is on bears’ side. Traders will watch showlist numbers and boxed beef action before forming cash opinions for this week.

Traders on watch for signs of a top in the cash hog market... Traders expect the cash hog market to put in a seasonal top soon, which resulted in lean hog futures slipping slightly below the cash hog index last week. Higher cash hog bids have cut into packer profit margins. Any signs of retreat for the cash market would likely garner quite a bit of attention.

Weekend demand news... Jordan issued a new tender to buy 100,000 MT of animal feed barley and 100,000 MT of hard milling wheat from optional origins. Iran exported 35,000 MT of wheat to Oman last week.

Today’s reports:

10:00 a.m., Weekly Export Inspections -- AMS
2:00 p.m., Milk Production -- NASS
3:00 p.m., Crop Progress -- NASS