Weekly Market Recap


Grains

The Trump Administration continues to receive intense pressure from farmers and lawmakers over the decision to grant waivers exempting 31 oil refineries from rules requiring them to blend corn-based ethanol into gasoline. The White House is feeling the heat from some of its most ardent supporters! Iowa Democratic Representative Cindy Axne will ask for a federal investigation into the EPA’s decision to waive refineries from biofuel-blending requirements under the RFS program. The first installment of MFP 2 payments are set to begin this month but a reported glitch in the USDA/FSA software in terms of some components of the program will likely mean some producers will not receive their payouts until September. China announced additional tariffs on $75 billion of U. S. goods shortly after 7:00 A. M. Friday morning. Equity and commodity markets were sharply lower on the news. President Donald Trump will hike tariff rates on most imports from China in response to the latest shots in the trade war between the world’s two largest economies, he said Friday. The White House will raise existing duties on $250 billion in Chinese products to 30% from 25% on Oct. 1, the president tweeted. The tariffs on another $300 billion in Chinese goods set to take effect Sept. 1 will now be 15% instead of 10%, he added. 

 

Corn

Corn shipments from Brazil and Argentina continue at a brisk pace. Brazilian corn exports for the first 19 days of August totaled 4.6 million tons while Argentina shipped 1.7 million tons in the first 16 days off this month.  Fall armyworms have moved into the Chinese province of Hebei. This is the 24th province in China where armyworms have been detected. The Chinese government estimates 2.356 million acres have been affected by the armyworms. The pest feed on leaves and stems of corn and sorghum.                                      

The crop progress report Monday afternoon pegged corn at 56% G/E down 1% from last week. Corn is 95% silking vs 90% last week, 55% in the dough stage vs 39% last week and 15% in the dent stage vs 7% last week. Sorghum G/E rating fell 1% from last week to 65%. POET, the nation’s largest ethanol producer, announced on Tuesday afternoon that they will idle production indefinitely at their Biorefining-Cloverdale, Indiana plant. Other POET biorefining plants will be running at reduced capacity and other biorefinery positions will be consolidated. Marquis Energy also announced it will cut production rates at its 100 million gallon-per-year plant in Necedah, Wisconsin. The company plan to continue run its 400 million gallons-per-year plant in Hennepin, Illinois at full capacity.  Export sales for 18/19 totaled 119,300 MT vs trade estimates of 50-400 MT. Sales for 19/20 came in @ 301,600 MT vs trade estimates of 200-600 MT.               

Wheat

Crop Progress Report showed Winter Wheat at 93% harvested vs 89% last week vs the 5-year average of 98%. Spring Wheat G/E rating was up 1 % from last week to 70%. Spring wheat is 16% harvested vs 8% last week vs the 5-year average of 49%.  Wheat export sales for 19/20 totaled 595,000 MT vs trade estimates of 300-500 MT.                 

 

Soybeans

China has been very active buying cargos of soybeans from South America. Trade talk had the Chinese buying 9-10 cargos on Tuesday afternoon and some in the trade are estimating that the Chinese have bought up to 50 cargos of South American soybeans since late last week.                              

Soybean G/E category fell 1 % from last week to 53% on this week’s Crop Progress Report. Soybeans are 90% blooming vs 82% last week vs the 5-year average of 96%. Soybeans setting pods reached 68% vs 54% last week vs the 5-year average of 85%. Soybean export sales for 18/19 totaled 25,900 MT vs trade estimates of (200)-100MT. New crop 19/20 sales totaled 792,600 MT vs trade estimates of 350-700 MT. Soymeal sales for 18/19 came in @ 118,600 MT vs trade estimates of 50-150 MT. Sales for 19/20 totaled 13,400 MT vs trade estimates of 50-200 MT. Soybean oil sales for 18/19 were 2,200 MT vs trade estimates of 5-10 MT.                                         

 

Livestock

Russia reported new found cases of African swine fever at two private farms in the Amur region near its border with China. The livestock market was hit hard by the latest tariff news out of China. Packer margins are crazy right now.  Values are running around $450/head which is historically high.  Slaughter looks to be steady or a few thousand higher than last week.  The fire at the packing plant a couple weeks ago has not affected the slaughter ability of the industry yet futures are still about $8 lower than when the fire happened.                            

 

Energies

WTI futures and the products were lower due to increasing tariffs and political rhetoric between the U.S. and China. Elevating fears of a global slowdown were exacerbated Friday as the two largest economies continue to raise the stakes in the trade war. AAA is reporting the national average for the price of gasoline at the pump at $2.601 per gallon compared to $2.767 a month ago and $2.828 during the same period last year. The highest recorded average prices were $4.114 during the great recession.