Trade moderates ahead of WASDE.

Good Morning from Allendale, Inc. with the early morning commentary for August 12, 2020.

Grain Markets were mixed to lower after Tuesday’s failure to hold higher pricing. Outside markets show a higher stock market in the face of clear profit taking in the metals. Gold is now 9% from its peak posted on Thursday ($179 per oz.).

WASDE yields are now front and center in the trade’s mind with expectations for a minor 2.0 bpa for corn and 1.4 bpa increase for soybean yields.

Allendale notes crop ratings models comparing 8/9 ratings vs. yields would imply 183.9 for corn (July 178.5) and 51.7 for soybeans (July 49.8). Current trade estimates of 180.5 and 51.2 may be under-counting the potential yield picture today.

Ending stock estimates show new crop corn rising from 2.648 billion to 2.800 and soybeans from 425 million to 524. US wheat stocks may rise from 942 to 946 million bushels.

Wheat production in the US is expected to show a minor increase from 1.824 billion to 1.832. Other spring wheat is where the gains may be shown.

Non-US wheat production may get the trade’s attention. Positive conditions in Russia, Australia and Canada are expected to counter losses in the EU, Ukraine and Argentina.

While today’s WASDE may show large corn and soybean yields, many in the trade question these numbers in face of Monday’s storm. The trade discussion suggests downward revisions coming for September’s report where in-field analysis is included. This year corn planted totaled 14.0 million acres for Iowa, 10.9 for Illinois and 5.4 for Indiana. Soybean planting ran 9.4 for Iowa, 10.4 for Illinois and 5.7 for Indiana.

Crop surveys and tours starting Monday may get the trade’s attention. Front and center is Allendale’s Nationwide Producer Survey. This two-week survey runs from August 17 – 28 with results released September 2. Over the past 10 years this year has a 1.1% miss rate for September corn yields and 3.4% for soybeans. Also starting Monday is a four day long crop tour.

Overnight export sales for soybeans have been quite strong. Since Monday the 3rd we have seen 1.497 million tonnes for Chinese buyers and 371,000 for “unknown”.

Cash cattle has been on fire of late. $105 was noted in the North and $103 in the South. These are the best prices since early June.

July feedlot placements are estimated by Allendale at 1.7% over last year. Combined with the 2.1% gain for June it appears as though February outflows will be well-supplied.

Monday’s storm also impacted hog processing. USDA revised Monday’s original 482,000 head estimate to 457,000. Tuesday’s run was seen at 458,000 head. The trade hopes this will be made up with a Saturday effort. The seasonal supply increase starting in mid-September remains a concern.

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