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One of the most closely watched data drops of the year takes place at 11 a.m. CT Wednesday morning, with USDA releasing its first survey-based estimate of corn and soybean crops of the year. The consensus is that yields for both will likely be below trend and that USDA, unlike last year, won’t throw any curveballs on acreage.
Keep in mind that the August data is a starting point. A hot, dry July appeared to ding the corn crop, particularly in the western Corn Belt. A wet start may have caused pollination problems in some parts of the east. Weather in August has been largely favorable, which could help corn with grain fill and could be particularly beneficial for soybeans with the crop in its most crucial growing period. An adverse turn could alter the script.
Analysts surveyed by Reuters, on average, look for USDA to report a corn yield of 182.4 bushels per acre, down from the trendline 183-bushel estimate the government plugged into its July report and well below the record 186.5 bushels seen last year. The soybean yield is seen at 52.9 bushels an acre, just a shade below the trendline 53 bushels used by USDA last month and matching last year’s figure. Analysts peg corn production at 15.934 billion bushels versus USDA’s July estimate of 16 billion, down from last year’s 17.021 billion bushels.
Soybean production is seen at 4.472 billion bushels, down a shade from the 4.475 billion bushels USDA penciled in last month and up from the 4.262 billion bushels produced last year. Analysts, on average, see harvested soybean acres at 84.564 million versus USDA’s earlier estimate of 84.401 million and up from last year’s 80.437 million.
Read: USDA corn, soybean yield estimates expected below trend in Wednesday’s August crop report
Market recap: Pre-report positioning wasn’t kind to the grain-market bulls Tuesday, unable to shake a risk-off tone amid favorable weather and forecasts.
- December corn fell 1 ¼ cents to $4.60 ½ to post its lowest close in four weeks.
- November soybeans ended 10 ¾ cents lower at $11.68 ¾
- September soft red winter wheat shed 10 ¼ cents to close at $6.30 ¼.
- December cotton bucked the gloom, rising 53 points to 84.39, the highest close in three months.
- October live cattle fell $0.575 to $226.325. September feeder cattle rose $0.675 to $345.25.
- October lean hog futures fell $0.35 to $83.325.
Most important data point of the month: It’s a big day for data outside the agricultural markets as well Wednesday. The Labor Department will release the July consumer price index at 7:30 a.m. A dismal July jobs report released last Friday dented expectations for a Federal Reserve rate hike in September, but likely wasn’t the last word. Much will depend on whether the July CPI reading affirms the slowdown in inflation seen in June. Economists surveyed by the Wall Street Journal, on average, look for CPI to post a monthly rise of 0.1% in July after seeing its first monthly drop in six years in June. The year-over-year rate is expected to slow to 3.4% from 3.5%. Traders will pay more attention to the core rate, which strips out volatile food and energy prices. Core CPI is expected to show a 0.2% rise in July, with the year-over-year rate slowing to 2.5% from 2.6%.The problem is that core inflation, whether measured by the CPI or the Fed’s preferred PCE gauge, continues to run above the central bank’s 2% target.
The Wall Street Journal’s Nick Timiraos summed up the backdrop in an X post:
- Officials have forecast that disinflation resumes once recent shocks fade. Instead the shocks keep overlapping and confidence in that forecast is slipping. A mild reading this week would validate the forecast and relieve pressure on [Fed Chairman] Kevin Warsh after last month’s press conference raised doubts about his strategy. A firm one raises the stakes for what he says next and for the September meeting.
Blunting the El Niño food shock: Near-record inventories, technological advances and the rise of key exporters such as Brazil and Russia have made for a global food system that’s much more resilient to this year’s “super” El Niño than to past episodes of the weather, according to a Reuters report. It noted that world farm production has outpaced consumption and population growth since the 1980s, with the changes driven by higher-yielding crop varieties, greater use of fertilizer and improved irrigation and crop protection, which has lifted yields for staples, including rice, wheat, corn and soybeans.
- “Even during drought conditions, better irrigation management and crop science mean we can still produce marketable yields,” Andrew Whitelaw of Australian agricultural consultancy Episode 3 told Reuters. “The potential impact on global food supplies and prices exists, but our improved preparedness means the disruptions are much less severe than they would have been in previous decades.”
Meatpacker JBS’s new CEO: JBS, the world’s largest meatpacker, named Wesley Batista Filho, the 34-year-old grandson of the company’s founder, as its next chief executive on Monday. Batista Filho, leader of JBS’s U.S. business, will take over the company at the start of 2027, the company said Monday. The U.S. business for JBS generates more than half of the meatpacker’s roughly $80 billion in annual revenue, the Wall Street Journal reported, noting he had been in the role since 2023. Batista Filho succeeds Gilberto Tomazoni, the company’s CEO since 2018. The Journal said meat industry officials had long expected Batista Filho to eventually assume the top job that his father once held at JBS after spending over a decade moving through the company’s ranks. The report noted that he is taking over as the company continues to lose money in its North American beef operations and is seeing pressure on chicken profits due to a poultry glut.
JBS’s Souderton pivot: The meatpacking giant on Monday also announced a major operational pivot for its facility in Souderton, Pa. Originally scheduled for a complete shutdown, the facility will be transformed into a dedicated value-added and case-ready packaging operation, notes Angie Stump Denton of Drovers.
Germany turns to truckers: Several of Germany’s most powerful states suspended a Sunday driving ban on heavy trucks in an effort to overcome trade disruptions caused by historically low water levels on the Rhine river, the Financial Times reported. While shipping accounts for just 5% of all goods transported in Germany, the limitations on the Rhine are a blow to Europe’s biggest economy due to the river’s role in moving coal, crude oil, minerals and ores, the report noted. An association of inland shippers has warned that a fifth heatwave could see water levels run so low that shipping along the full length of the Rhine may become impossible. Germany and several other European countries, including France, Italy and the Czech Republic, ban heavy trucks from using roads on Sundays.
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