** Mixed and low volume has been the early CBOT trade with limited direction for price being offered. Corn continues to slide on fund selling, while wheat holds Thursday’s gain, and soybeans are caught in between. The volume of CBOT trade has been uninspiring and traders are watching the eventual track of Hurricane Harvey – and how it might impact mature row crops in LA, MS and AR.
Gulf State farmers are worried that heavy rains/strong winds cause lodging of crops with harvest underway. The track of Harvey and its resulting heavy rain will be key to soy price outlook early next week. LA, MS, and AR farmers fret that heavy rains could produce crop lodging and yield loss. Some are rushing to harvest mature corn, but the soybean harvest is still slow to get underway.
** USDA announced that China bought 132,000 MTs of soybeans for the 17/18 crop year. And 105,000 MTs of soymeal was sold to Thailand for the 7/18 crop year. China continues to show good interest for securing US soybeans under the marketplace.
** CBOT brokers estimate that funds have sold 3,000 contracts of soybeans and 4,200 contracts of corn, while buying 1,500 contracts of wheat. In soy products, funds sold 1,200 contracts of soyoil and 900 contracts of soymeal.
** Top Flight Grain Co-op around Champaign, IL estimated their area corn yield at 183 BPA vs 212 BPA last year (assuming 90,000 kernels/Bu). Their soy yield count was 50 pods/plant down from last year’s 54 pods. This is 7.5% reduction in soybean yield (assuming a similar pod weight) from 2016 and offers further hint that NASS’s 1 BPA fall in IL soy yield from last year (58 BPA) is too high. A host of private crop tours in Central IL have uncovered corn yield potential some 10-20 BPA below last year. The area around Champaign is one of the hardest hit in IL with dryness from June into mid July. Many Central IL areas are suffering from dryness and rain is still needed. Soybeans here have finished podding and it’s all about the size of existing soybean seeds.
** NASS will release their monthly Cattle on Feed report this afternoon. The trade has really missed the last few months on placements, and the guesses for this report range between 102-115%. It’s the placement rate which will determine if the report is bullish or bearish. ARC would note that the number of US livestock (cattle, pork and poultry) will be record large in the 4th quarter and the first half of 2018. If a bull meat story is to develop, it will have to be based on US export demand. China’s interest for US beef will key US beef price direction during Q1 2018.
** The Jackson Hole Central Bank Meeting is not producing any big revelations other than normalization in the US, and the inability of the world Central Banks to spur inflation. The US sees inflation at 2% for 2018 and beyond.
** Midday GFS Weather Model Update: The forecast is much colder from the overnight solution with just a few lite showers for the Lake States this weekend as a weak Trough is pulled southward via the upper air impact of Hurricane Harvey in the Gulf. E Midwest rain totals would range from traces-.4”. The remainder of the Midwest is largely dry for the next 10-12 days.
All eyes on the path of Hurricane Harvey. The models are callig for landfall at high tide late today and then holding Harvey nearly stationary across SE TX and taking the storm on and off shore into Tuesday. Extremely heavy amounts of rain are expected with totals running from 12-30.00” in Coastal TX/LA areas. Inland rains into TX and LA could reach 6-12.00”.
Seasonally cold temps are being pulled southward from Canada in early September with a Canadian frost on Sept 2-3. A cold pattern is established thereafter that has to be closely monitored. A Ridge/Trough pattern allows such cold to flow southward into the NC and NE US. The GFS 10-15 day forecast is chilly!
** AgResource Market Comment: The cold extended Canadian and NC Midwest forecast has to be monitored. It could become a talking point as crops need an extended growing season via to a lack of GDDs. It’s a race to the finish for corn/soybeans.
** 10 Day GFS Rainfall and Monday Sept 4th Temp Deviations (note 20 degree below white estimate)