Good morning!
Grain prices pull back ahead of USDA report… As of 6:00 a.m. CDT, November soybeans were down 12 1/4 cents, December corn futures off 3 1/2 cents and December winter wheat futures were 5 to 6 cents lower. Position evening ahead of today’s USDA data dump was featured overnight. The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are near steady and trading around $64.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.28 percent.
USDA monthly supply, demand report on deck… Today comes what is arguably the most important data point of the month for the grain futures markets: USDA’s August supply and demand report. Huge and even record yields could be forecast today for the U.S. corn and soybean crops. A Reuters survey of analysts shows they expect, on average, U.S. corn crop production this year to total 15.99 billion bushels, with an average yield of 184.411 bushels an acre. U.S. corn harvested acres this year are forecast at 86.716 million. The record for U.S. corn production is the 15.341-billion-bushel crop grown in 2023, while the record average yield of 179.3 bu. per acre was in 2024. For soybeans the poll of analysts expects, on average, the U.S. soybean crop production this year to be 4.368 billion bushels, with an average yield of 52.937 bushels an acre and U.S. harvested acres at 82.561 million. The U.S. soybean production record was made in 2021 when production totaled 4.465 billion bushels, while the record average yield per acre of 51.95 bushels happened in 2016. U.S. Corn ending stocks for marketing year 2024-25 are pegged by the Reuters survey at 1.321 billion bushels, with 2025-26 marketing year corn ending stocks seen at 1.900 billion bushels. Marketing year 2024-25 U.S. soybean stocks are seen at 345 million bushels, with 2025-26 ending stocks at 355 million bushels. U.S. wheat ending stocks for marketing year 2025-26 are seen by the Reuters survey at 882 million bushels. The USDA report is released at 11:00 a.m. CDT.
U.S. corn, soybean crop conditions decline just slightly… USDA Monday afternoon reported the condition of the U.S. corn crop declined 1%, to 72% rated good/excellent. Seven states indicated the corn condition improved last week, while seven indicated the corn condition declined. Most of the improvements were generally found in the western locations, while most of the declines were found in the eastern locations.“One thing to watch for with the corn is potential tipback due to the warmer-than-normal nighttime temperatures during July and thus far during August.Since the USDA is not conducting any field checks for the August crop report, this phenomenon may not be accounted for until the September crop report,” said Pro Farmer crop consultant Michael Cordonnier in a report. Meantime, USDA Monday reported the condition of the U.S. soybean crop declined 1%, to 68% rated good/excellent. Nine states indicated the soybean condition improved last week, while seven indicated soybean conditions declined and two were unchanged.Most of the improvements were found in the western locations, while most of the declines were found in the eastern locations.
Key U.S. inflation report also out today… The July consumer price index report out this morning will give traders and investors fresh clues on how U.S. trade tariffs are impacting inflation. Analysts expect the annual CPI inflation rate to come in up 2.8%, compared to up 2.7% in the June report. The core rate (minus food and energy) is expected to come in up 3.0%, year-on-year, compared to a rise of 2.9% in the June report. The marketplace has been betting on a quarter-point interest rate cut at the Fed’s Sept. 17 FOMC meeting. Some are even thinking tame inflation data today could give the Fed a green light for a half-point cut in September.
U.S. extends China tariff truce for 90 more days… President Trump extended a pause of higher tariffs on Chinese imported goods for another 90 days, into early November, in an effort to stabilize trade ties between the world’s two largest economies. Trump signed the order extending the truce through Nov. 10, deferring a tariff hike set to kick in today, with all other elements of the agreement remaining the same. The extension eases worries of a renewed tariff war and gives the two countries more time to come to an agreement.
Trump downplays summit meeting with Putin… President Trump has tempered expectations for his upcoming meeting with Russian leader Vladimir Putin in Alaska Friday as Trump seeks to end the Russia-Ukraine war, saying it will be a “feel-out meeting” and he would confer with Ukrainian and European leaders after the meeting. “I’m going to be telling him, ‘You got to end this war. You got to end it,’” Trump said Monday at a White House press conference. Trump added that it wasn’t “up to me to make a deal.” Trump said, “I’m going to go and see the parameters. I may leave and say, ‘Good luck,’ and that’ll be the end. I may say this is not going to be settled.”
Gold price stabilizes as Trump says bullion imports won’t see tariffs… Gold traded slightly lower overnight and appears to have stabilized after President Trump Monday said imports of bullion won’t be subjected to U.S. tariffs. Confusion over the Trump administration’s gold tariff policy had roiled the gold market the past two trading sessions. New U.S. tariffs on gold bullion would have major implications for bullion flows around the world.
China ups tariffs on Canadian canola… China will implement more levies on Canadian rapeseed after an anti-dumping probe, escalating a trade row that has disrupted crop flows, according to a Bloomberg report. China plans to impose a 75.8% duty starting Aug. 14 after a preliminary ruling that Canadian imports constitute dumping, according to a statement from China’s commerce ministry. Benchmark futures in New York tumbled as much as 4% following the announcement. Earlier this year, Beijing imposed a 100% tariff on rapeseed oil and meal from Canada in response to Canadian levies on Chinese-made electric vehicles, steel and aluminum.
Palm oil futures hit four-month high… Malaysian palm oil futures rose around 1% to over MYR 4,400 per MT, marking a third straight session of gains and the highest price level since early April. The rally was driven by stronger edible oil prices on the Dalian market and improved global sentiment after the U.S. and China agreed to extend a pause on higher tariffs. Exports added support, with shipments for August 1–10 surging 23.3% to 23.7%, cargo surveyors said.
JBS working with Kansas U. to show cattle capture greenhouse gases… JBS NV is working with the University of Kansas to show that Brazil’s cattle production plays a role in capturing greenhouse gases, helping to counter concerns over methane emissions, according to a Bloomberg report. JBS Chief Executive Officer Gilberto Tomazoni said the current method of calculating carbon emissions is wrong as it considers only carbon emissions, not gases captured during the whole production process. Tomazoni said Brazil has real examples of carbon capture in production, such as Fazenda Roncador, which are expected to be presented during COP30, the world’s most important climate conference.
Trading action in cattle futures extra important today… The live and feeder cattle futures markets bulls Monday at least stabilized prices after last Friday’s strong losses. Bulls appear to be exhausted from the record-setting price runs the past few months. Price action will be extra important today. Stronger selling pressure today would begin to suggest near-term market tops are in place. Cash cattle trade last week averaged $242.01, down $1.16 from last week’s average.
Lean hog futures bulls stop losing streak… After three straight sessions of price losses the lean hog futures bulls got in gear Monday, to keep alive the price uptrend in place on the daily bar chart. Stable cattle futures prices Monday, following their strong losses last Friday, were also a positive element for the hog futures market. The latest CME lean hog index is up 50 cents to $110.10 as of Aug. 6, rebounding from recent weakness.
Today’s reports—Tuesday
11:00 am Cotton Ginnings
11:00 am Crop Production
11:00 am The World Agricultural Supply and Demand Estimates Reports (WASDE)
11:00 am Cotton: World Markets and Trade
11:00 am Grains: World Markets and Trade
11:00 am Oilseeds: World Markets and Trade
11:00 am World Agricultural Production
1:00 pm Meat Price Spreads