Storm Damage Estimates Taking Shape

Good Morning from Allendale, Inc. with the early morning commentary for August 21, 2020.

Grain Markets worked higher overnight as crop tours begin to reveal the extent of the damage seen to U.S. crops from last week’s storms. As the market digests new yield estimates, traders will begin to position for what the numbers will mean for Monday’s crop progress report, and September’s WASDE production figures.

The Allendale Nationwide Producer Survey opened up on Monday. This two-week long annual survey continues through Friday the 28th. Results will be released Wednesday, September 2nd. Last year’s survey covered 29 separate states with a survey volume to compute 83% of US corn and soybean production. Crop surveys receive data from every part of a state. This may shed light on important regional weather variations. Producers are encouraged to participate at or by calling 800-262-7538.

Pro Farmer estimates Iowa’s corn yield at 177.81 bushels per acre, below last year’s 182.83 bpa after dryness impacted parts of the state, and last week’s derecho damaged fields.

Weekly export sales reported corn sales of 784,919 metric tonnes, 61,574 old and 723,345 new crop. This was within the 500,000 – 1,350,000 trade expectation. Soybean sales totaled 2,560,481 metric tonnes, -12,693 for old and 2,573,174 for new, and wheat sales were reported at 522,964, within the expected 300,000 to 600,000 tonnes.

Chinese purchases totaled 8,631 tonnes of old crop and zero new crop corn. Their old and new purchases from 2/13 total 7.880 million tonnes listed as China, another 1.524 listed as Unknown. This week, China cancelled 32,775 for old and purchased 1,654,000 new crop soybeans. Sales since 2/13 for old and new + overnight sales come to 16.996 million tonnes for China and 7.946 for Unknown. There was no change this week to their wheat numbers.

The Trump administration on Thursday declined to acknowledge any plans to meet with China over the Phase 1 trade deal after the commerce ministry in Beijing said bilateral talks would be held “in the coming days” to evaluate the agreement’s progress. (Reuters)

The Buenos Aires Grains Exchange warned that frosts this week are adding to the stress caused by severe dryness in Argentina’s wheat crop, and said that yields will likely be impacted.

Option expiration for the September contract is today. They will go off the board with today’s close.

Beef export sales last week ran 19,590 metric tonnes. This improves on the previous two weeks of low numbers. This week was 14% over last year. Pork export sales last week ran 20,603 metric tonnes. This was 11% over last year. Sales have been over last year in seven of the past eight weeks.

Friday’s Cattle on Feed report will set the stage for a portion of January through April finished cattle offerings. Allendale sees July placements at 1.7% over last year, the average trade guess is +6.1%. This will mark two months in a row of above last year placements.

Cold Storage will be released on Monday and we expect to see 452.708 million lbs. of beef in frozen storage at the end of July. That would be 25 million lbs under the end of June. We expect to see 467.117 million lbs. of pork at the end of July. That represents a 3 million lb. increase over June.

Dressed beef values were higher with choice up 2.34 and select up .66.  The Feeder cattle index is 142.80.  Pork cut-out values were up 1.09.

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