August 20, 2018

Words for The Week, “Crop Surveys”

August 20th, 2018

Good Morning! From Allendale, Inc. with the early morning commentary for August 20, 2018.

Grain markets are preparing for several crop tours and survey results over the next few weeks. Two well followed crop surveys such as Allendale and Pro Farmer’s crop tour will be well promoted and will catch air-time, both begin today. Pro Farmer will release results on Friday.

Allendale’s Annual Yield Survey begins today and run through August 31. Participate in the survey by clicking here. You know your field better than anyone! We will be releasing the survey results on September 5. You can also share the results of your farm by calling us at 800-262-7538.

Crop conditions report this afternoon are expected to be steady to lower than last weeks 70% good/excellent in corn and the 66% good/excellent in soybeans. The crop is maturing which likely be a reason for the lower expectations.

CFTC Commitments of Traders showed managed money funds reducing their net short position in corn by 4,743 contracts while adding to a short position in soybeans by 2,641 contracts. They were net buyers of 2,361 wheat. Managed money funds were net sellers in precious metals to push their position to a record net short level.

Mexico's economy minister Ildefonso Guajardo said on Friday he hopes to conclude by the middle of this week the outstanding bilateral trade issues with the United States.

Funds on Friday were estimated net sellers of 7,000 corn contracts and 4,000 soybeans. They were net buyers of 10,000 wheat contracts.

Negotiators are planning a road map to resolve the China and US dispute by November. Lower level representatives are expected to get together this week to pave the way for higher level talks. So far, the U.S. has imposed levies on $34 billion in Chinese goods and another $16 billion in goods scheduled to take effect this week.

Agriculture Department representatives told The Wall Street Journal that the agency expects to announce official guidelines for the $12 Billion Federal Aid Programs by Aug. 24 and be ready to implement them by Sept. 4.

Managed money funds were net sellers in live cattle of only 431 contracts. However, they bought 5,076 contracts in lean hogs and remain net short 6,293 contracts.

Cash cattle trade happened early last week and then late Friday at mostly steady prices with the previous week. Choice beef cutout jumps as retailers finish purchases for Labor Day Holiday.

October futures rallied on Friday closing 1.62 higher for the week. Resistance crosses at 112.25 and support this week will come in at 107.65.

Cash hog index continues to slide as meat protein is in an oversupply and is competing for retail counter space with chicken and beef. However, cheap pork could catch some buying interest as we move into September.

October futures saw late week short covering, rallying 7.42 last week. Friday’s close above the 50-day moving average sets the stage for a test of the 100-day average at 60.40.

Dressed beef values were mixed with choice up 2.28 and select down .54. The CME Feeder Index is 149.59. Pork cutout value is down .86.

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