Good morning!
Grain prices mixed to firmer overnight… As of 6:00 a.m. CDT, December corn was 2 1/4 cents higher, November soybeans were up 3 3/4 cents and December winter wheat futures were 1/2 to 1 1/2 cents lower. The corn market bulls have managed to stabilize prices late this week, which is a minor victory for them following Tuesday’s shellacking in the wake of a bearish USDA report. Soybean bulls are having a good week despite Thursday’s profit-taking pressure that was not unexpected after good gains posted Tuesday and Wednesday. Winter wheat futures markets continue to struggle and will likely need the help of corn and/or soybeans to halt their price downtrends. The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are weaker and trading around $63.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.27 percent.
Annual Pro Farmer Crop Tour starts Monday… Our annual Pro Farmer Crop Tour is next week, Aug. 18-21. Look for daily updates from crop scouts and state results each evening at 8:00 p.m. CDT. Our final yields will be released on Friday, Aug. 21 at 1:30 p.m. CDT. We will produce our daily newsletters, though our “Crops Analysis” and “Livestock Analysis” will be replaced with an extended version of “After the Bell” all next week.
Downbeat economic data from China… China’s economy broadly slowed in July, with factory activity, investment and retail sales disappointing, according to data released by the China’s National Bureau of Statistics on Friday. Production at Chinese factories and mines rose at the slowest pace since last November and increased at a less-than-expected 5.7% last month from a year earlier, compared with June’s gain of 6.8%. Retail sales grew 3.7%, year-on-year, in July, the slowest this year and down from 4.8% growth seen in June. China’s growth in fixed-asset investment in the first seven months of this year decelerated to 1.6% as a contraction in the real estate sector continued. The urban unemployment rate climbed more than expected in July, to 5.2%. The offshore Chinese yuan currency was steady after the slew of downbeat data. The Hang Seng China Enterprises Index fell as much as 1.5% Friday, while the onshore CSI 300 Index ended the morning session 0.5% higher.
Trump, Putin likely have different views of success at summit… Presidents Donald Trump and Vladimir Putin will measure success at their summit in Alaska today very differently, with Trump seeking a ceasefire in Ukraine and Putin seeing the meeting as a win without making concessions, according to a Bloomberg opinion story. “The summit is a repudiation of former President Joe Biden’s approach of ‘nothing about Ukraine without Ukraine,’ and Trump believes he is central to ending the conflict, not Ukraine,” said the report. Richard Haass, a former senior U.S. State Department official, said “Russia wants to continue to pursue its objectives, which are to dramatically weaken Ukraine and essentially undermine its independence and sovereignty,” and sees negotiations as a means to that end. Those are the contrasting stakes as both leaders head to Anchorage for their first summit since 2018 in Helsinki.
High heat in much of central/southern U.S. this weekend… The National Weather Service reports hot temperatures are forecast over the Plains and into the lower Mississippi River Valley today, where heat advisories have been issued. The highest temperatures are forecast to spread from the central Plains to the Midwest this weekend, with high temperatures in the mid-to-upper 90s and low 100s and heat index values in the low-to-mid 100s. “This level of heat is expected to create major to locally extreme heat risk in these regions, which could be hazardous to anyone without adequate cooling and/or hydration,” including livestock, said the NWS.
Western Australia wheat production prospects high… Widespread rains the past month in Western Australia have put that region on track for a near-record grain crop this season, according to an industry group, which raised its estimates for wheat production by more than 20%, according to a Bloomberg report. Wheat output is forecast at 11.5 million MT for 2025-26, up from an earlier estimate of 9.4 million MT, a monthly report from the Grain Industry Association of Western Australia said. The state is the country’s largest producer of wheat. The group’s overall crop forecast, which includes barley and canola, has been increased by more than 10% to 21.9 million MT. Western Australia’s harvest usually begins around late October.
Hotter U.S. producer price index surprises marketplace… A hotter-than-expected U.S. producer price index report for July, released Thursday morning, has only slightly trimmed marketplace expectations for a Federal Reserve interest rate cut in September. The core PPI (excluding food and energy) rose 3.7%, year on year, well above market expectations. While the hot PPI data did not roil the markets Thursday and a Fed rate cut in September is still widely expected, the PPI probably took off the table a 50 basis-point Fed rate cut in September that a minority of the marketplace was thinking before the hot PPI data. On deck today is the important U.S. retail sales report for July, seen coming in up 0.5%, month-on-month, compared to a rise of 0.6% in the June sales report.
Malaysian palm oil futures end trading week with gains… Malaysian palm oil futures edged higher Friday, holding above MYR 4,400 per MT and reversing the prior session’s losses amid a weaker ringgit and reports that Malaysia raised its September crude palm oil reference price, lifting the export duty to 10%. For the week, contracts are on track for the second successive weekly advance, up over 3.5% so far, boosted by strong export demand.
Choppy, more volatile cattle futures trading at higher price levels… That’s a technically bearish warning signal of topping processes for the cattle futures markets. The live and feeder cattle futures markets have seen their near-term technical postures deteriorate a bit recently. That’s prompting some profit taking, weak long liquidation and even a bit of bold speculator short-selling. However, overall cash and beef market fundamentals remain solid and the live cattle futures still have significant discounts to the cash market. More active cash cattle trading occurred Thursday, with USDA reporting steers fetching an average price of $243.46 and heifers averaging $241.80. Last week’s cash cattle average price was $242.01.
Lean hog futures bulls fading… The lean hog futures market was hit by more profit-taking pressure Thursday, along with weak long liquidation from the speculators. Cash hog and pork market fundamentals have deteriorated a bit this week. Thursday’s sell offs in the cattle futures markets also likely weighed on hog futures. The latest CME lean hog index is down 6 cents to $109.78 as of Aug. 12. Today’s projected hog index price is up 5 cents at $109.83. The national direct five-day rolling average cash hog price quote Thursday was $109.67.
Today’s reports—Friday
--2:00 pm Peanut Prices