Trade talks are on again
Crop condition ratings for the week showed a one-point improvement for corn at 58 percent good/excellent.
Corn in the dough stage is at 81 percent , still 12 percent behind average.
Corn denting is at 41 percent , versus the 5-year average of 63 percent.
Soybeans remain unchanged for the week at 55 percent good/excellent. Soybeans blooming are near average at 96 percent , while setting pods is 10 percent behind at 86 percent .
The NASS issued their July crush report at 900,000 bushels more than expected at 179.5 million bushels. This was also 600,000 bushels more than the same period a year ago. Year to date crushing is 24 million bushels higher than the USDA projection. Overall, the USDA’s crush number could be 5-10 million bushels higher than their current old crop forecast.
Soybean shipments for August have set an unofficial record at 164.8 million bushels. The previous record for August was in 2016, at 152.9 million bushels. This should push ending stocks below a billion bushels.
More soybean for Brazil
Brazil’s government announced that soybean plantings would expand 1.1 percent for the year.
In the past 13 years, this would be the slowest growth rate for soybean production in Brazil. An expected 90.7 million acres of soybeans will be planted, making this a larger crop than in recent years. Brazil’s government announced that they will raise the quota for U.S. ethanol imports from 600 million liters to 750 million liters, which is about 200 million gallons of ethanol. Reports are beginning to circulate of extremely hot weather in high soybean producing areas of Brazil. Reports that drought conditions are being seen in Mato Grosso and forecasts indicate rains are unlikely to reach the regions suffering the most. This is expected to delay early soybean seeding.
African swine fever
A third of China’s hog population has been wiped out due to African swine fever, with the disease still spreading.
Since pork is the main staple for meat in China, the government is discussing dramatic steps to help stabilize the world’s largest pork market. One option that China’s government is discussing is releasing the emergency reserves of frozen pig meat. The price retailers pay for pork has risen close to 70 percent in the past year, along with the average price that wholesalers pay suppliers has risen 90 percent in the last week of August in comparison to a year ago. Analysts predict if the prices continue to rise, China will look to other markets to fill their pork needs.
The U.S. and China agreed to hold high-level talks in Washington starting early October. The meeting was setup during a phone call between China’s Vice Premier, U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin.
Even with the in-person talks scheduled, the U.S. is still planning to increase tariff rates from 25 percent to 30 percent on $250 billion worth of Chinese imports on October 1st.
September WASDE report
The September supply and demand report is a week away and the USDA is wrapping up their first field surveys. Traders are already disputing the numbers. This is due to the lagging crop maturity and the fact it is still too early to get an accurate indication of yield. This is especially true for corn as test weight can still be affected, which is a major factor in final yield. Analysts believe the October report will be much more accurate, but by then, the market will have early yield data to focus on.
For more information, you may contact Kristi Guse at (712)-260-6486, or e-mail at email@example.com. The opinions and views expressed in this commentary are solely those of Kristi Guse. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.
Please Enter Your Facebook App ID. Required for FB Comments. Click here for FB Comments Settings page