Good morning!
Grain prices mixed to firmer overnight… As of 6:00 a.m. CDT, December corn was up 3 cents and hit a four-week high, November soybeans were down 1 1/4 cents and December winter wheat futures were up around 1 to 2 cents. Corn and soybean futures markets bulls came out of hibernation late last week, helped in part by the annual Pro Farmer Crop Tour results that showed diseases that have cropped up in some regions of the Corn Belt as the growing season for corn and soybeans progresses. The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are firmer and trading around $64.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.279 percent.
Pro Farmer Crop Tour final results… Pro Farmer crop scouts last week found a big U.S. corn crop but one that’s projected to average 182.7 bushels per acre – 6.1 bu. below USDA’s latest 188.8-bushel projection. “When we put the yield estimate out, it comes with a plus or minus 1% for corn and a plus or minus 2% for soybeans, and that’s because we know things can change yet,” said Chip Flory, lead scout on the western leg of the tour. “The other thing is the yield models that we use give us a range, and then, based on conditions, we can move within that range with the yield estimate that we’re going to pull,” he said. The 2025 growing season has seen disease crop up in many of the corn and soybean fields Pro Farmer scouts evaluated last week. “We know disease can speed up the maturation of plants, making it difficult to keep them healthy long enough for optimal grain fill before harvest,” said Lane Akre, lead scout on the eastern leg of the tour. “We are concerned diseases like southern rust and tar spot could negatively impact corn yields in some of these states during the next few weeks.” USDA’s August estimate for the U.S. soybean yield average is just slightly above what Pro Farmer scouts found in fields last week. Pro Farmer put the U.S. soybean yield average at 53.0 bu. per acre, with a total crop size of 4.246 billion bushels. By comparison, USDA projects soybeans to average a record-high 53.6 bu. per acre, with a total crop of 4.29 billion bushels.
Cool temps, little rain in Midwest much of this week… The National Weather Service reports that east of the Rockies and north of the Gulf Coast, large swaths of below average temperatures are expected this week, with temperatures more reminiscent of early fall than late summer. Cool to cold conditions are expected overnight from the Gulf Coast northward, with sunshine during the day over portions of the Midwest, Appalachians, and much of the East. Record lows will be threatened on Tuesday at International Falls, Minnesota (close to freezing) and well as portions of the Midwest, where 40s and 50s are forecast.On Wednesday, the record low territory expands across the Midwest, towards the southern Great Lakes and into the Southeast, encompassing a broader area of 40s and 50s. Heavy rainfall north of a front will develop at times over parts of Colorado, Oklahoma, Kansas, and Arkansas through Wednesday, with a slight risk of excessive rainfall over portions of these areas. Little rainfall is expected over much of the Corn Belt through at least mid-week.
New World Screw Worm found in U.S. citizen… The U.S. has confirmed a case of the flesh-eating parasite New World screwworm in a person in Maryland, who had traveled from Guatemala and has received treatment for the infection. New World screwworms are parasitic flies that lay eggs in the wounds of warm-blooded animals, causing severe damage and, if untreated, death. USDA has rolled out a five-part strategy to eradicate screwworms, including building a sterile fly production facility and releasing lab-bred male flies that can’t reproduce into outbreak zones. It’s the first human case in decades on U. S. soil. The infection had been largely forgotten since the U.S. declared victory over the blight in the 1960s, but a growing number of detections in Central America and Mexico sparked concerns in the U.S.
EPA rules on refinery exemptions… The Environmental Protection Agency (EPA) announced Friday it acted on 175 Small Refinery Exemption (SRE) petitions covering compliance years 2016–2024, seeking to clear a longstanding backlog and align policy with the Renewable Fuel Standard (RFS). After consultation with the Department of Energy, EPA granted full exemptions to 63 petitions, partial exemptions to 77, denied 28, and found seven ineligible. The agency granted 50% relief in cases of partial hardship, moving away from earlier interpretations that would have denied aid altogether. EPA also confirmed that compliance credits (RINs) returned through these exemptions will not affect current or future renewable fuel blending obligations, since credits from 2022 and earlier are no longer valid for 2024 compliance. EPA said it will soon submit a supplemental proposed rule to the Office of Management and Budget on reallocating exempted volumes for 2023 and later years, while leaving earlier years untouched. The proposal will also outline how EPA plans to account for future exemptions when setting renewable fuel standards for 2026 and 2027. EPA emphasized that its actions are meant to balance relief for small refiners with Congress’ intent to expand the use of U.S. biofuels, strengthen energy security, and support rural economies.
Federal Reserve Chairman Powell pivots… The Kansas City Federal Reserve’s annual Jackson Hole central banker symposium saw Fed Chairman Jerome Powell on Friday lean easier on U.S. monetary policy. Powell used his keynote speech to signal the Fed is headed for an interest-rate cut as soon as its next policy meeting in September. However, there are divisions among other Fed policymakers over whether that’s the right call. Even Powell noted the U.S. economy has handed Fed officials a “challenging situation.” The Fed is grappling with inflation that’s still above its 2% goal — and rising — and a labor market that’s showing signs of weakness. Powell’s speech rallied the U.S. stock market and sharply pressured the U.S. dollar index Friday. However, overnight the U.S. stock indexes pulled back a bit and the USDX posted a modest rebound.
China’s central bank supports government’s bond market… The People’s Bank of China added a net 600 billion yuan via its one-year medium-term facility and outright reverse repos this month, the most since January, reports Bloomberg. Wang Qing, chief macro analyst at Golden Credit Rating Co, said the PBOC will keep up its longer-term liquidity injections to ensure smooth issuance of government bonds and to foster an increase in bank loans, which “reassures market of a growth-supportive monetary policy stance.” The PBOC indicated it is holding back from aggressively easing its monetary policy, but pledged targeted support for the economy, and has been making short-term cash infusions to support the market. Meantime, China strengthened its yuan currency fixing by the most since January after the U.S. dollar slumped in the wake of Federal Reserve Chair Powell’s commentary at Jackson Hole. The People’s Bank of China set its daily reference rate for the local currency at 7.1161 per dollar, versus Friday’s level of 7.1321. Monday’s fixing was the strongest since last November.
Potential China stock market bubble… China’s economy is being strained by U.S. tariffs and a property crisis, yet stocks are extending their bull run, stirring doubts on the rally’s staying power, reported Bloomberg today. “The rally has been driven by cash-rich investors shifting into stocks amid a lack of alternatives, with some analysts warning that a bubble is in the making, citing ‘irrational exuberance.’ A deflationary spiral and weak domestic demand are eroding corporate pricing power, with some analysts doubting the sustainability of the current rally, according to Homin Lee, senior macro strategist at Lombard Odier Ltd,” said Bloomberg.
China says U.S. protectionism hurts agricultural cooperation… Farmers should not pay for a trade war, said Chinese envoy Xie Feng, according to the transcript of a speech published by the Chinese embassy on Saturday. U.S protectionism is undermining agricultural cooperation with China, said Feng, warning that farmers should not bear the price of the trade war between the world’s two largest economies. “It goes without saying that protectionism is rampant, casting a shadow over China-U.S. agricultural cooperation,” said Feng.
Malaysian palm oil futures prices down… Malaysian palm oil futures slipped to around MYR 4,510 per MT, reversing a rally from the previous session as a stronger ringgit and weaker Chicago soyoil weighed on sentiment. Caution also grew as traders awaited export estimates from cargo surveyors for August 1–25, due later today. Still, losses were limited by expectations of festive-led demand in top buyer India ahead of the Diwali celebrations in mid-October. In July, Indian purchases surged 16% from June to 301,000 MT, the highest in nine months.
U.S. cattle on feed down 2 percent… USDA Friday afternoon reported cattle and calves on feed for the slaughter market in feedlots with capacity of 1,000 or more head totaled 10.9 million head on August 1. That’s 2 percent below August 1, 2024. Placements in feedlots during July totaled 1.60 million head, 6 percent below 2024. Net placements were 1.55 million head. During July, placements of cattle and calves weighing less than 600 pounds were 340,000 head, 600-699 pounds were 245,000 head, 700-799 pounds were 365,000 head, 800-899 pounds were 378,000 head,
900-999 pounds were 195,000 head, and 1,000 pounds and greater were 75,000 head. Marketings of fed cattle during July totaled 1.75 million head, 6 percent below 2024. Other disappearance totaled 51,000 head during July, 9 percent below 2024.
Cattle futures markets remain strong… Live and feeder cattle futures markets hit new record highs last week and show no signs of letting up. October live cattle futures Friday rose $3.15 to $237.875. September feeder cattle futures rose $4.65 to $362.675. Bullish fundamentals and technicals continue to drive the cattle futures markets into record-high territory, with no strong, early clues that market tops are close at hand. Friday afternoon’s monthly USDA cattle-on-feed data continued to lean price-friendly, showing less cattle on feed and placed on feed as of Aug. 1 than last year. USDA Friday reported more active cash cattle trade. Steers fetched an average price of $244.92 and heifers $244.35. USDA will report last week’s average cash cattle trading price around midday today.
Lean hog bulls gain momentum… October lean hog futures Friday rose $1.275 to $91.20 and closed at a technically bullish weekly high close. Technical buying and perceived bargain hunting were featured. More record highs in live and feeder cattle futures markets prompted spillover buying interest in hog futures. The latest CME lean hog index is down 25 cents to $108.32 (as of Aug. 20). Monday’s projected cash index price is down another 48 cents to $107.84. The national direct five-day rolling average cash hog price quote Friday was $109.52.
Today’s reports—Monday
--Weekly USDA export inspections 10:00 a.m. CDT
--Weekly USDA crop progress reports 3:00 p.m. CDT