Quick Glance
- Reuters reports Chinese importers are expected to purchase about 10 U.S. soybean cargoes
- Corn crop conditions improve by 2%, soybeans stay the same at 54%
- USDA has started paying out farm aid to farmers afflicted by the U.S.-China trade war
- Ideal weather is expected with chances for drying out crops for harvest
- China’s pork imports rose 76% in August from the same month a year earlier
U.S.-China trade updates
- Reuters reports Chinese importers purchased 10 U.S. soybean cargoes on Monday. Two traders with direct knowledge of the deals said the shipments are out of the Pacific Northwest export terminals and are expected to be shipped from October to December. This comes just shortly after Chinese official canceled a visit to U.S. farm states last week as trade negotiators wrapped up talks in Washington. The two countries are expected to resume trade talks in October.
Crop Progress
- Corn conditions increased by 2 to 57% good to excellent (GTE) vs. 69% GTE last year
- U.S. harvest is at 7% completed versus the 11% five-year average.
- Corn denting is up to 79%, yet still behind the five-year average of 94%
- Only 29% of corn is mature compared the 57% average.
- Soybean conditions stayed stagnant at 54% GTE compared to last year’s 68% GTE condition rating.
- Soybean setting pods should be completed by now, according to the USDA.
- 34% of surveyed soybeans are dropping leaves versus the 59% average.
- These numbers aren’t surprising, but they reinforce that this year’s crop remains behind schedule versus recent years. Some soybean harvesting has begun across the Delta, but the USDA has not yet added soybean harvest paces to their weekly reports.
USDA updates
- As of Monday, the USDA has paid $4.07 billion of its latest round of compensation for farmers suffering from the trade war with China. The Trump administration announced in July to compensate farmers with a $16 billion package for lost sales due to tariffs.
- Corn found some support from higher-than-expected export sales reported by the USDA last week. The large drops in corn prices over the last month and a half have contributed to stronger U.S. export competitiveness, but the large Brazilian corn crop will continue to pressure U.S. export volumes. The Brazilian corn crop is expected to exceed the 100 million metric ton mark for the first time this year, with analysts on average expecting the crop to yield 102.3 million metric tons, a 2.3% increase from the 99.98 mmt collected from the prior harvest.
Weather
- Weather is great for drying crops out for harvest. We are seeing rapid acceleration of harvesting and this heat will bring the crops to maturity. Despite the lateness of the crops in the Midwest, there is no frost risk on the horizon and suspect farmers may get crops out rapidly this fall. Rapid harvest will accelerate the chances the lows are in. A drawn-out harvest gives the chance for prices to retrench, but rapid ones give little time for retrenchment. Crop quality is likely to be good as well this year.
China Aug pork imports jump 76% as disease decimates local supply
- Reuters reports China’s pork imports rose 76% in August from the same month a year earlier, customs data showed on Monday, after African swine fever reduced the country’s pig herd by more than a third. Domestic pork prices have surged, and China’s meat imports are swelling in response, straining global supplies and sending ripples across the global economy. In Brazil, poultry shipments to China have jumped 31% from a year ago and retail prices for chicken breasts, thighs and legs have increased roughly 16%. Consumers in other countries are paying more for pork as more domestically produced meat is being sent to China. U.S. consumers have yet to feel price impacts but that could change as China exempts U.S. pork, among other products, from tariffs.
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