- Rough day in the soybeans, but a negative day isn’t a bad thing
- China keeps purchasing U.S. beans
- Spillover pressure for the wheat from the row crops
- Equity markets around the world were falling on a Monday
- Cash Cattle prices
- Friday COF Report
While the markets took a wild ride on Monday the NASS crop progress report looks fairly uneventful. Row crop harvest is getting started somewhat ahead of the five year average. That has been expected by many though given the early and swift planting that occurred. After big double digit increases in the soil moisture profile last week dry conditions have set back in and are slowly taking the soil moisture down.
In a full breakdown of the report we start with corn in the dent stage. It’s essientially complete across the country this week at 95%. That is up 6% from last week and still 5% ahead of the five year average. 97% of Nebraska corn is in the dent stage, 96% of Kansas corn is in the dent stage and 94% of Iowa corn is in the dent stage. All just a few points ahead of the five year average.
Corn maturity is also moving along swiftly with a nationwide rating of 59%. That is an 18% increase in the mature corn from a week ago. It’s also perfectly 10% ahead of the five year average. In the Midwest; 93% of the Nebraska corn crop is mature, 81% of the Kansas corn crop is mature and 66% of the Iowa corn crop is mature. All of these are ahead of their respective five year average, except Kansas which is 1% behind the five year average.
Corn harvest slowly moves along in the country up 3% nationwide from last week to 8% complete. Unlike the rest of the corn stages harvest is actually behind the five year average of 10%. Texas is by far the farthest along in corn harvest with 69% of the crop out of the field. Nebraska has 10% of the corn harvested. Iowa has 4% of the corn harvested. All these states are still ahead of their five year average. Kansas on the other hand has harvested 16% of their corn crop is 6% behind the five year average.
Finally with corn the overall condition of the crop remains little changed from last week. Nationwide the crop ticked up 1% to 61% good to excellent. Nebraska corn increased 3% to 63% good to excellent. Kansas corn remains unchanged week to week at 54% good to excellent. Iowa corn also remains unchanged week to week at 42% good to excellent. Illinois corn follows the Nebraska plan with corn conditions rising 3% to 73% good to excellent.
Staying with row crops soybean dropping leaves is now considered 59% complete across the country. That helps it stay 9% ahead of the five year average. 82% of the Nebraska soybean crop has dropped leaves, 48% of the Kansas soybean crop has dropped leaves and 66% of the Iowa soybean crop has dropped leaves. All of these are well ahead of their five year average.
Soybean harvest is also now far enough along to be recognized by crop progress. Nationwide 6% of the soybean crop has been harvested. That is fully steady with the 5 year average. In Nebraska 10% of the soybean crop has been harvested. Iowa, 7% of the soybean crop has been harvested and in Kansas 2% of the soybean crop has been harvested. All of these are well ahead of the five year average of Kansas takes the cake doubling their five year average for soybean harvest.
Just as corn soybean condition rating is relatively unchanged week to week. Nationally the soybean crop is rated 63% good to excellent, unchanged week to week. Also remaining unchanged week to week is Illinois soybeans at 71% good to excellent and Iowa soybeans at 48% good to excellent. Nebraska soybeans actually increased 2% week to week at 66% good to excellent. Kansas was one of the few states to see an actual decrease in soybean conditions with a drop of 6% to 45% good to excellent.
Now to sorghum. Sorghum maturity continues to be ahead of the five year average with a national rating of 51% mature, 3% ahead of the five year average. Nebraska sorghum has reached 49% maturity. A solid 13% ahead of the five year average.
Sorghum harvest is starting to get underway. Nationwide 27% of the sorghum crop is out of the field. That is 2% behind the five year average. In Nebraska 2% of the sorghum crop is harvested. 1% behind the five year average.
Nationwide the sorghum crop is rated 51% good to excellent, down 1% from last week. In Nebraska the sorghum crop is rated 66% good to excellent. A sharp 6% decline from last week.
Winter wheat continues to go into the ground with 20% of the national crop planted. Just 1% ahead of five year average. Nebraska is well ahead of the Kansas at 40% planted. Kansas is 14% planted.
Winter wheat is also starting to emerge with 3% of the national crop above ground. 1% of the Kansas crop has emerged and 0% of the Nebraska crop has emerged.
After big gains last week pasture and range conditions fall this week. Kansas range condition fell 4% to 37% good to excellent. Nebraska pasture condition fell 1% to 40% good to excellent.
Soil moisture was also tightened this week due to dry conditions re-emerging. In Nebraska the topsoil rating dropped 6% to 48% adequate to surplus and the subsoil rating dropped 3% to 44% adequate to surplus. In Kansas topsoil moisture was unchanged week to week at 63% adequate to surplus, subsoil moisture actually increased 2% to 62% good to excellent.
You can see the USDA report here: https://downloads.usda.library.cornell.edu/usda-esmis/files/8336h188j/2227nd802/h415q0669/prog3920.pdf
Clay Patton recaps the report here:
A busy weekend has thrown bullish investors and traders into a tailspin on Monday. In the US another round of stimulus may be on hold as the death of a Supreme Court Justice and their potential replacement weighs heavy on Congress and the President. Across the pond there are reports that some of the largest banks in Europe and Britain including HSBC, Barclays and Deutsche have been moving large sums of money to offshore accounts without officially knowing the account holder. The suspicious activity reports say that the banks have moved close to $2 trillion over the last 20 years. The whole situation seems to be a financial grey area, but could be considered money laundering. The Banks are firing back saying at the time of the transactions regulations allowed the activity. All of this is sending traders to short positions on the equity and Euro. The US Dollar seems to be a safe haven rising over 0.7%.
A rising dollar has also put commodities on the run. WTI crude oil futures are down as much as 3.32%. RBOB unleaded gas is down over 4%.
In the grains temporary tops may be in for the short term. A rising dollar and strong harvest getting underway are definitely putting a little whoa in the bulls. Export sales though continue to be strong. On Monday the USDA announced sales of 171,000 MT of soybeans to unknown destinations, 132,000 MT of soybeans to China and 132,000 MT of soybeans to Pakistan. Mark Gold though alluded to a report out late last week that shows China has actually been reselling some of the soybeans they purchased from the US to Brazil. This could show that some of China’s recent purchases are more about currency and demand rates elsewhere in the world. Also looking at the latest sales the US has already sold about 10 MMT of corn to China with the total quota for the 20/21 marketing year at about 15 million. This doesn’t leave much for the next 11 months of the current marketing year. Finally the net long position by managed money is approaching multi year highs in soybeans. This could signal that managed money is about ready to take profit and pull back from the grain complex that has had nearly a month of higher prices.
However there can always be more bullish action. Harvest is underway and if Iowa comes in worse than expected or if other states start to report poor yields the bulls will be back. We will also be getting a stocks report out from USDA. If that were to somehow show slim US stocks bulls will be back in the market.
In livestock the Monday trade is opening mostly lower. Of course a sharp selloff in the outside equity markets could be putting some pressure on cattle. Tomorrow the latest cold storage numbers will be released and that could help paint a current demand picture for where meat it moving. For both hogs and cattle cash was higher last week. This could help keep trader confidence high and erase any early week losses later in the week.
In the country last week cash trade started up on Wednesday in the South, with a full range of $103 to $105, mostly $103 to $103.50. That is generally $2 higher than the prior week’s weighted averages. Northern dressed trade took place mostly on Thursday with a little cleanup on Friday, with a full range of $162 to $165, mostly $163, generally $2 higher than previous week’s weighted average basis Nebraska.
For the week ending September 12, 2020, Imported Beef Passed for Entry in the U.S. totaled 36,388, 84.37% of the previous week and 81.60% of the 4-week average.
Expected Slaughter numbers Monday
119,000 hd today 117,000 hd wk ago 115,248 hd yr ago
481,000 hd today 481,000 wk ago 115,248 hd yr ago
Midday Carcass Value Monday
Choice up 1.22 216.86
Select up 1.46 205.40
C/S Spread 11.46
Carcass up 3.09 90.62
Bellies up 6.98 152.24
Pre-Opening Market Broker Commentary
Mark Gold, Top Third Ag Marketing, discusses overnight grains and what the trade may see today. China continues to buy soybeans, but there are reports that they are selling them back to Brazil.
Jerry Stowell, Country Futures, looks at what may impact the livestock futures today. Outside markets are in risk off territory, but cattle and hogs may focus on stronger cash.
Mike Zuzolo, Global Commodity Analytics, takes a look at the midday trade. Monday is a traditional risk off day.
John Payne, Daniel’s Ag Marketing, takes a closer look at today’s grain close. The current market trend is tough for forward sellers. John Payne not available Monday 9/21.
Jack Fenske, York Commodities, looks at the closing market numbers. Grains may be putting in a high and starting a lower leg.
Thursday brought about another strong day of gains in the grain market. Soybeans continue to hold well over the $10 mark. Looking at a continuous chart that puts soybeans back towards highs not seen since early 2018 before the US China trade war kicked off. Kyle Bumsted with Allendale Inc. believes this now give farmers a unique opportunity to go back and visit their marketing strategy. 2019 has been a year that farmers have seen plenty of government payments, but now the market seems to be giving opportunity to market at a profitable level.
Bumsted also gives strong insight into why the feeder cattle corn spread may be nearing it’s useful end. Rather feeders are looking at the cash difference between the fats getting on the truck and the lightweights coming off the truck. Finally there is the lean hog market that really caught fire on Thursday. Could it be starting to get top heavy or is there more room to go higher?
You can hear all of Bumstead’s comments here:
Mike Zuzolo, Global Commodity Analytics, joins the Fontanelle Final Bell on a turn around Tuesday in the ag commodity markets. Zuzolo highlights that today’s pullback was bound to happen sooner rather than later. Still in the soybean complex it’s good to see the July contract holding the strong physiological level of ten dollars. Now the question becomes can the current run of Chinese demand and South American production workout to allow the rally to continue. Zuzolo also breaks down the current buys being made by China and how they compare in the big picture of the Phase One Trade Deal.
In the second half of the program Zuzolo talks funds in the ag commodities and livestock. Cattle may be starting to hit overbought levels despite the fact cattle seasonally are in a slump after the Labor Day holiday. The conversation ends on the importance African Swine Fever still has on the markets.
Catch the full show here:
The mid September crop progress report from NASS shows a substantial jump in moisture ratings from last week’s cool rain event. There is also a notable increase in pasture and range conditions due to the moisture. Aside from that the corn and soybean crop remain relatively unchanged and still well ahead of schedule when compared to the 5 year averages in most categories.
Starting at the top of the report which is now corn in the dent stage where 89% of the country has reached. That is 7% ahead of the five year average. Nebraska has reached 94% dent stage, Kansas has reached 91% and Iowa corn has reached 90% dent stage. All of those well ahead of their respective five year averages.
Corn maturity is also well ahead nationwide at 41%. The five year average is 32%. Iowa and Nebraska almost double their corn maturity five year averages at 48% & 49% respectively. Kansas on the other hand actually fell 1 % behind it’s five year average for corn maturity to 49% mature.
With that much of the corn crop already mature harvest is getting underway in several states. As an aggregate the national corn harvest is considered 5% complete. Right on track with the five year average. Texas of course is the furthest along with corn harvest at 67% complete. Nebraska has harvested 4% of the state’s corn crop that is 3% ahead of the five year average. Kansas though is again behind in corn harvesting with only 8% of the crop picked, 3% behind the five year average.
As the case has been for the last several week’s corn condition in the country continues to decline. Nationwide the corn crop is rated 60% good to excellent. Down 1% from last week. Nebraska and Iowa also dropped 1% to 61% and 42% good to excellent. Kansas corn increased 1% to 54% good to excellent. Illinois not to be outdone by Kansas increased 2% in the corn condition to 72% good to excellent.
Now to the soybean crop where 37% of the nations crop has dropped leaves. That is 6% ahead of the five year average. As for Nebraska 61% of the soybean crop has dropped leaves. That is perfectly 20% ahead of Iowa who has dropped leaves on 41% of the soybean crop. Either way both states are double digits ahead of their five year averages. Kansas soybeans dropping leaves is now at 32% complete. That is ahead of the five year average of 19%.
Soybean condition like corn dropped this week across the country to 63% good to excellent. Down 2% from last week. Nebraska and Iowa soybeans though bucked the trend and increased 1% apiece to 64% and 48% good to excellent. Kansas soybeans remained unchanged on the week at 51% good to excellent. Illinois though outdid all these states again with their soybeans improving 3% to 71% good to excellent.
Poor mans corn or one of the hottest commodities currently for China is sorghum. 39% of the US sorghum crop has reached maturity. That is even with the five year average. In Nebraska sorghum maturity is 9% ahead of the five year average at 26%.
Sorghum condition seems to have more elasticity than corn or soybeans. Nationwide the sorghum crop is rated 52% good to excellent, up 3% from last week. Nebraska though saw a 14% increase in it’s sorghum condition rating to 71% good to excellent.
Last week’s rain helped to bring the pasture and range condition back around in Nebraska. Nebraska pasture and range improved from 25% good to excellent to 41% good to excellent this week. Kansas pasture and range remained unchanged week to week at 41% good to excellent. Looking around the country West Virginia actually did nearly the opposite of Nebraska with their pasture and range condition falling 11% week to week at 67% good to excellent.
Topsoil and subsoil moisture both seem to benefit from last week’s moisture as well. Nebraska topsoil moisture improved 17% to 54% adequate to surplus. Kansas topsoil moisture improved 19% to 63% adequate to surplus. Subsoil moisture in Nebraska is now rated 47% adequate to surplus. An increase of 14% from last week. Kansas subsoil moisture improved 8% from last week to 60% adequate to surplus.
You can see the full report from NASS here:
Clay Patton breaks down the full report here:
As expected USDA and the World Outlook Board lowered their predictions for US production of corn and soybeans. Soybean ending stocks were also reduced giving bulls there added incentive to continue buying. USDA also excluded 550,000 acres of corn in Iowa due to the derecho wind event.
Wheat may be the biggest loser on the day with USDA raising it’s estimate of Australian production. US and global stocks also appear to be plentiful for wheat.
|US Corn & Soybean Production 2020 Millions of Bushels||September||Average||Range||USDA August||USDA 2019|
|US 19-20 Stock Pile Millions of Bushels||September||Average||Range||USDA August|
|US 20-21 Stock Pile Millions of Bushels||September||Average||Range||USDA August|
|World Stockpiles19-20 Million Metric Tons||September||Average||Range||USDA August|
|World Stockpiles 20-21 Million Metric Tons||September||Average||Range||USDA August|
Sam Hudson with Cornbelt Marketing joins the Fontanelle Final Bell as the markets get back to work after the Labor Day holiday. In the grains they essentially picked up where they left off last week. Soybeans notched their 11th consecutive higher close. The rally partially driven by strong Chinese demand. However Hudson is cautious to ride the Chinese demand bull to far because China has spoken for a lot of grain, but has not taken a lot of delivery yet.
Hudson also covers how the current moisture and cool temperatures could impact markets. Overall he expects the impact to be negligible as the moisture may be a little to late and frosty temperatures not too damaging.
Catch the full episode here:
TOPEKA, Kan. — When Leo Budy enrolled in the chemical engineering program at the University of Kansas, a classmate told him that the KU Biodiesel Initiative sought new volunteers. The grassroots, student-run operation produces biodiesel from used cooking oil generated on campus. He eagerly checked into it and hasn’t looked back since .
“When I got the first tour of the lab, I knew I had stumbled across something that I could really get excited about,” Leo says. “I volunteered in the lab over the course of the summer, and I got absolutely addicted. The more time I spent in the lab helping to clean, organize, and maintain the biodiesel production process, the more captivated I became.”
The KU Biodiesel Initiative that Budy is a part of is supported by the Kansas Soybean Commission. The Commission has long recognized the importance of biodiesel as a market for utilizing their soybeans and have invested in biodiesel research and market development. Since 2007, they have been in partnership with the University of Kansas to develop students.
Budy is one of four new co-chairs selected to lead the national Next Generation Scientists for Biodiesel program. A program of the National Biodiesel Board and United Soybean Board for college-level science students, NGSB fosters professional relationships between budding and established scientists, shares accurate information and increases collaboration with academia and the biodiesel industry.
“As we strive for our goal of 6 billion gallons of biomass-based diesel by 2030, which would double our industry’s current production, science will play a vital role,” said Donnell Rehagen, NBB CEO. “Our four new co-chairs bring diverse and promising research, as well as exciting outreach experience to NGSB.”
In a live Zoom event – “Science, Live: Meet Biodiesel Scientists Making an Impact” – on September 10, the NGSB will introduce its new leaders, who will share the real-world impact of their biodiesel-related initiatives. It will also feature other scientists on NBB’s thriving efforts in low-carbon California, and ways U.S. soy is innovating.
In addition to Budy, the three other new NGSB co-chairs are as follows:
The new co-chairs all received scholarships to attend the National Biodiesel Conference & Expo earlier this year. The NBB offers competitive travel scholarships to NGSB members. The application process for the 2021 conference will open in the fall.
Made from an increasingly diverse mix of resources such as soybean oil, recycled cooking oil and animal fats, biodiesel and renewable diesel are better, cleaner fuels that are available now for use in existing diesel engines without modification. NBB is the U.S. trade association representing the entire biodiesel and renewable diesel value chain, including producers, feedstock suppliers, and fuel distributors. NBB is funded in part by the United Soybean Board and state soybean board checkoff programs.
As expected by much of the agriculture industry Monday’s crop progress report from NASS showed a significant drop in Iowa crop conditions following the derecho wind event. The report also showed winter wheat harvest almost complete across the country and the state with the best rates range condition is in New England.
The report starts off with corn entering into the dough stage, which 76% of the countries corn crop has reached. That is still keeping pace ahead of the 5 year average at 69%. Nebraska corn in the dough stage is set at 88%. That is 16% higher than the 5 year average. Iowa and Kansas corn were both rated to have reached 81% in the dough stage. 4% and 9% ahead of their respective 5 year averages.
Corn entering into the dent stage across the country is now at 23%. That more than doubles the amount of corn in the country from last week in the dent growth stage. Nebraska corn is 29% in the dent stage up from the 5 year average of 20%. Iowa corn in the dent stage is rated 26%. That is 7% higher than the 5 year average. Kansas corn in the dent stage is rated at 40%.
The number that many were wanting to see was the national corn condition and it fell 2% to 69% good to excellent. Iowa corn condition fell 10% to 59% good to excellent. The sharp drop in condition comes after the big winds last week that damaged to some extent as much as 14 million acres. Kansas corn actually improved 1% to 63% good to excellent. Nebraska corn fell 5% from last week to 73% good to excellent.
The soybean crop has essentially finished blooming at 96% across the country. Nebraska joins Louisiana and Michigan at 100% bloomed. Iowa soybeans have reached 97% bloomed and Kansas soybeans have reached 90%.
Soybean setting pods across the country is considered 84% complete. That is up 5% from the 5 year average. Iowa and Nebraska are both tied at 90% setting pods. Kansas soybeans have set pods on 73% of the crop.
The national soybean condition rating reverted back to what it was just a few week ago, 72% good to excellent. Like corn Iowa soybeans took a big hit falling 8% from last week to 62% good to excellent. Kansas soybeans dipped to 69% good to excellent. Nebraska soybean condition fell 5% week to week to 76% good to excellent.
Sorghum is almost completely headed out in Nebraska at 95%. That is actually the most headed out sorghum in the country. Texas is a close second at 91%. Nationally 83% of the sorghum crop has headed out.
The national sorghum condition fell 1% to 67% good to excellent. Nebraska sorghum is now rated 71% good to excellent. That is an increase of 7% from last week.
Winter wheat harvest is almost to the finish line across the country at 93% complete. That is still 3% behind the 5 year average. Idaho and Montana are the still the biggest stragglers with only 60% of the winter wheat corp harvested.
Oat harvest continues to roll along and is almost 2/3rds done across the country. Nebraska is just behind Texas with 98% of the oat crop harvested.
Pasture and range condition continues in mixed fashion across the country. Nebraska and Kansas range is considered 55% good to excellent. Vermont actually has the highest rating of pasture and range condition in the country at 92% good to excellent. Of large states Florida has one of the best range conditions at 79% good to excellent.
Topsoil moisture continues to gain in Kansas at 76% adequate to surplus. Nebraska top soil is trying to hold it’s own at 53% adequate to surplus.
Subsoil moisture is a similar story with Kansas at 75% adequate to surplus and Nebraska subsoil moisture at 58% adequate to surplus.
See the full crop progress report here: https://downloads.usda.library.cornell.edu/usda-esmis/files/8336h188j/zc77tc78q/bv73cn80z/prog3420.pdf
Clay Patton has an audio recap of the report here: