Tropical Storms Bring Hope for Needed Rains

August 24, 2020

Good Morning from Allendale, Inc. with the early morning commentary for August 24, 2020.

Grain Markets were mixed as corn futures rose for a 2nd session on lower production estimates while soybean and wheat futures slid lower as tropical storms in the Gulf offer hope for much-needed rains throughout most of the growing areas later this week.

Last week, December corn futures were up 4.00 cents, November soybeans were up 5.00 cents, December wheat up 25.00 cents, December soymeal was down $1.40 and December soyoil was up 59 points.

USDA Weekly Crop Progress Report will be released this afternoon at 3 p.m. CDT.  Trade is expecting corn crop conditions to decline 2% to 67% GTE (69% last week, 66% average).  Soybean crop conditions expected to decline 2% to 70% GTE (72% last week, 63% average).  Hard red spring wheat is expected to be unchanged at 70% GTE (70% GTE last week).

CFTC Commitments of Traders report showed funds new net position short -110,499 corn contracts, long +107,058 soybean contracts, short -12,474 wheat contracts, long +57,767 live cattle contracts and long +19,927 lean hog contracts.

Private exporters reported export sales on Friday to the USDA of 405,000 metric tons of corn to China during this marketing year.  400,000 metric tons of soybeans to China during this marketing year and 368,000 metric tons of soybeans to unknown during this marketing year.

Pro Farmer Crop Tour trimmed corn yield estimates from USDA August WASDE report by 4.3 bushels per acre to 177.5 bpa cutting corn production by 458 million bushels.  Soybean yields were trimmed 0.8 bpa to 52.5 bpa cutting soybean production to 63 million bushels.

Pro Farmer corn estimates have been below September USDA report estimates 14 of last 18 years while their soybean estimates fall short of the September USDA report estimates 11 of the last 18 years.

President Trump hailed FDA authorization of a coronavirus treatment that uses blood plasma from recovered patients, a day after accusing the agency of impeding the rollout of vaccines and therapeutics for political reasons.  “It appeared that the product is safe and we’re comfortable with that and we continue to see no concerning safety signals,” Peter Marks, director of the FDA’s Center for Biologics Evaluation and Research, told reporters.

Cattle on Feed report was released on Friday and was seen as bearish.  July placements were 11% over last year (average trade estimate was +6.1%). July marketings came to 0.6% under last year (trade estimated 0.4% under last year) and On feed, as of August 1st, was noted at 1.5% over last year (average trade estimated 0.7% over last year).

Cold Storage report will be released this afternoon 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 0.56 and select up 2.68.  The Feeder cattle index is 143.90.  Pork cut-out values were down 2.57.

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