8.21.26 Tredas Weekly Recap

Weekly Action:

Sep26 Corn up 24.5 to $4.8375

Nov26 Beans up 48.25 to $12.395

Sep26 Chi Wheat up 7.5 to $6.815

Sep26 KC Wheat up 3.25 to $7.5625

Oct26 Cotton up 341 points to $0.8707/lb

Oct26 Hogs down $0.875 at $80.875

Aug26 Fats down $0.575 at $223.05

Aug26 Feeders down $6.075 at $334.75

Dec26 Corn up 24.75 to $5.085

Nov26 Beans up 48.25 to $12.395

Jul27 Chi Wheat up 12 to $7.2225

Jul27 KC Wheat up 6.75 to $7.86

Dec26 Cotton up 363 points to $0.8835/lb

Grains:

Grains notched out another positive week of trade, sustaining a rally with multiple input factors. The ProFarmer tour kicked off earlier this week, with field scouts checking yields from South Dakota to Ohio. Yield checks were disappointing for corn, and beans along expectations. After the market close on Friday, ProFarmer released their preliminary yield estimates (below)

At a national yield of 173.2bu on corn, that would signify a ~560Mbu drop in production across the US. This large of a drop in production would take our projected carryout to ~1.093Bbu, taking stocks/use to 6.693% As for beans, a 53.3bpa yield would be 0.6b higher than USDA’s latest WASDE projection. Below is a chart showing what a 1.093Bbu carryout, with equal demand, could look like with historical reference.

ProFarmer does not write the whole book, however. Export inspections for corn and beans were both high, Europe’s crop does not seem to be growing, and continued escalation in the Russia/Ukraine conflict have all thrown global grain trade into a frenzy.

Livestock:

Cattle futures battled adversity this week, attempting to trade higher but meeting resistance nearly every day. News of a program to lower consumer beef prices spread Thursday evening, which led to a sharp open to the downside on Friday. By the end of trade, Dec cattle futures battled back $4.275 from the daily low to close slightly down on the week. Oct feeders followed a similar story, coming $7.70 off the low of the week.The August COF report was released on Friday afternoon, as well. Trade expectations/USDA numbers are as follows:

Cattle on feed Aug 1: Expected 102.5%, USDA 102%

Placed on feed Aug 1: Expected 93.5%, USDA 89%

Marketed in July: Expected 92.6%, USDA 93%

Weather:

The current 10-day forecast for the US sees moderate rainfall throughout the plains with some scattered precipitation throughout the rest of the corn belt. A high-pressure ridge still sits in the South-West US, helping push storms from Nebraska through the corn belt. Temperatures are to remain slightly above normal throughout the plains.

Economy:

Major indices saw troubled trade this week due to increased tension worldwide. President Trump aired out some seemingly friendly comments towards North Korea and seemingly dissing South Korea for their lack of involvement with the Iranian conflict. President Trump has also floated the idea of putting sanctions on Iran in an effort to end the conflict in the Middle East, with Iranian trade partners rejecting such measures.

Crude oil continued to rally this week, marking ~$6/bbl gains through the end of trade on Friday. Diesel futures followed suit, with September trading above $4.47. In fuel news, the EPA issued an emergency waiver this week to allow usage of E10 through September 15^th and E15 through August 31^st. This move should free up available gasoline supply state-side, hopefully curbing rising fuel prices.

Something That Probably Means Nothing:

When you wake up in the morning, you are actually taller than you are at the end of the day. The body decompresses during sleep, and on average most people “grow” 1cm overnight, and that growth disappears after a few hours rooting about your daily routine.

Quote of the Week:

“I can’t change the direction of the wind, but I can adjust my sails to always reach my destination” – Jimmy Dean

Have a great weekend!