Western corn rootworm beetles began emerging in southeast and south central Nebraska at the end of June. Beetles typically emerge somewhat later in northeastern and western Nebraska.
Beetles emerging before silk emergence may feed on corn leaves. They feed by scraping the surface tissue, leaving a white parchment-like appearance. Once silks emerge, they become the favored food. The earliest silking fields in an area often are most heavily damaged because beetles will move to them in search of green silks.
There are no thresholds for silk-clipping damage based on beetle numbers because damage levels are not correlated well with beetle densities. Usually an average of 5-10 beetles per ear is required to seriously affect pollination. Severe silk feeding (silks clipped to less than ½ inch from the ear) at 25%-50% pollen shed may indicate a need to apply insecticide. Silk feeding after pollination is complete does not affect yield potential.
It has been an interesting week in the markets. For the outside equities the sky seemed the limit coming into the week. By weeks end everything outside of technology is yielding to the market bears. The NASDAQ continues to post record highs while the S&P 500 and DOW Jones slide slowly away from theirs. In the macro picture traders are still nervous about the mounting corona virus outbreak. There is plenty of positive data, but the headlines continue to read doom and gloom. Thursday the weekly jobless claims came in at 1.31 million. That was below analyst expectations and the 14th week of continued declines, but now nearly 50 million Americans have filed for unemployment. It will be interesting to see how this report changes as states like Nebraska start to change the unemployment requirements back towards pre-covid. Tuesday the JOLTS job report showed the US had 5.4 million job openings in May. That was up from the expected 4.9 million.
Investors are hedging their bet and putting money back into safe havens. The interesting thing is the US Dollar is not being bought like it was earlier in the year. On Wednesday the US Dollar dropped 0.45%. Precious metals and US Treasuries were then the favored safe haven. August Gold is traded near it’s contract high above $1,822/ounce. After an auction the US ten year treasury yield has also dropped to nearly 0.60%. It should be pointed out that gold became a favorite following the selloff in the European equities. Coming into the end of the week traders are now back to favoring the US Dollar with it gaining over 0.35% on Thursday. It appears the Gold hit technical points of resistance and money started to move out back into the dollar.
Up to Thursday the lower dollar helped to keep energy bulls in the hunt. Then WTI crude oil futures broke below $40/barrel. The latest stocks and production numbers though are not that great. Crude oil stocks on Wednesday grew 5.7 million barrels to 539.2 million barrels. Excluding the strategic petroleum reserve that is about 18% higher than year ago levels.
For the week ending July 3 EIA data shows ethanol production increased 1.6%, or 14,000 barrels per day (b/d), to 914,000 b/d. Production is in 12.7% below the same week in 2019. Ethanol stocks bounced higher for the first time in eleven weeks, expanding 2.3% to 20.6 million barrels and 10.4% below year-ago volumes.
The volume of gasoline supplied to the U.S. market, a measure of implied demand, grew 2.4% to 8.766 million b/d. Gasoline demand was 10.1% lower than a year ago. While lower than a year ago, this data shows that the holiday driving was fairly strong over Independence day.
Grains have traded weather heavily this week. First is started off dry and no relief in sight. Mid week there was a chance, but going into Thursday morning the rain that did develop wasn’t enough to scare the weather bulls. The WASDE report on Friday held no real surprises. Expected yields were left unchanged from the June report. With the drop in acres that helped to reduce the overall harvest size. With a smaller harvest the 20/21 marketing year corn carryout came back below the 3 billion bushel mark. While that is a small sigh of relief the carryout is still expected to be well above 2 billion bushels. John Payne, Daniels Ag Marketing, in his afternoon commentary discussed how the WASDE was friendly in the short term, but brings up the long term question of how far can US production keep going. Global production continues to rise and the US dollar strength is keeping US commodities largely out of the global market place.
The latest crop progress report from NASS rated the national corn crop at 71% good to excellent. That is 2% lower than the previous report, but 14% higher than a year ago. Soybeans are the best they’ve looked in early July since 1999 at 71% good to excellent. That was unchanged week to week.
Wheat was given a boost when the French Ag ministry lowered the country’s wheat crop to 31.3 MMT. That is lower than USDA’s estimate of 33.8 MMT in June and last year’s 41.1 MMT. The US did miss out on Egypt’s latest tender for wheat. Russia was the winning bidder selling 230,000 MT for $218.80-$218.90/MT. That undercuts US wheat by about $20-$30/MT at the Gulf.
USDA flash sales started the week strong with China and Mexico buying corn and soybeans. China purchased 264,000 MT of soybeans for the 2019/2020 marketing year. China purchased 202,000 MT for the 2020/2021 marketing year. Mexico purchased 182,880 MT of corn split between the 2020/2021 & 2021/2022 marketing year. There have been no other flash sales so far this week.
The latest USDA export sales report for the week ending July 2nd was mixed. Wheat net sales compared relatively close to previous weeks at 326,100 MT. Exports of wheat were 410,100 MT. Mexico was the top destination. Taking in over 25% of total exports. Corn net sales were up 66% at 599,200 MT for the 19/20 marketing year. China was the top buyer at 407,200 MT. Exports of corn notched another week at over a million metric tons, but was still down 25% from the previous week. Mexico was the top destination for US corn at 358,500 MT. China dominated all segments of sorghum exports with net sales of 50,900 MT and taking delivery of 51,100 MT. Soybean net sales were up noticeably from the previous week at 952,200 MT. China was the top buyer at 461,400 MT. Soybean exports were up 20% at 467,500 MT. Mexico was the top destination at 144,200 MT. China was a distant third.
The latest USDA grain export inspections were delayed until early afternoon on Monday due to technical difficulties. Overall the report held few surprises. Corn exports fell below a million metric tons. That widens the deficit corn is running with the previous marketing year. Sorghum also fell sharply to just over 50,000 MT. Year to date though sorghum is running almost 3 million metric tons more than a year ago. Soybean exports were strong over 500,000 MT.
Export business for US grains has been decent in 2019/2020. US soybean export commitments are 254.8 million bushels. That is up 180% from a year ago. South American grain exports though continue to grow rather than shrink. Brazil exported a record 505.1 million bushels in June vs. 314.1 million bushels last year. Argentinian and Brazilian FOB corn offers are $4-$15 cheaper per metric ton than US corn at the Gulf.
Livestock futures trended higher most of the week. Traders are cautious to take up to short of a position ahead of Friday and the latest WASDE report. That will help shed light on the latest protein demand trends. Going into the report though the load movement is starting to slow. On Wednesday midday pork was a sluggish 170 loads. Just a week ago it was nearly 400 loads. For cattle cash continues to develop firm to stronger. That could create follow through support later this week. As for pork traders they are expecting to see a significant increase in Chinese export business. China suspended imports from two more Brazilian meat plants on Monday. The suspension comes over corona virus concerns. Reports indicate that recent mass testing in Brazil revealed more than 1,000 positive corona virus cases at meat plants in Mato Grosso do Sul. Stone X analysts point out that the Chinese government continues to limit the sources of meat that can be imported over fears that the corona virus will be carried into the country on the meat, even though literally tens of thousands of tests of such meat in recent weeks have failed to produce a single positive test result.
The latest export sales report from USDA confirmed China was a large buyer and destination of US pork. Pork net sales were 31,500 MT. That was down 20% from the previous week. Mexico was the top buyer at 9,100 MT. China was a close second at 8,100 MT. Pork exports were up 8% at at 33,500 MT. China was the top destination at 12,700 MT. Mexico was a close second at 10,300 MT.
Beef net sales were uneventful and down 23% from the previous week at 9,500 MT. Japan and South Korea were the top buyers at 2,900 MT and 2,300 MT respectively. Beef exports were up 3% at 15,100 MT. South Korea was the top destination at 4,500 MT
A very light trade in parts of the North on Thursday at generally steady money with the rest of this week’s business. The South only saw a little scattered trade here and there. A regional did light business in Nebraska, at $157, $3 higher than last week’s weighted average. On Monday Kansas trade was marked at $93 to $95, Nebraska also reported just a handful of trade at $160. Show lists this week are higher in Kansas, somewhat higher in Texas and lower in Colorado and Nebraska.
The Fed Cattle Exchange Auction today listed a total of 1,390 head, with 659 actually sold, 731 head listed as unsold, and 0 head listed as PO (Passed Offer). The state by state breakdown looks like this: KS 1,048 total head, with 659 head sold at $95.00-$95.25, 389 head unsold; NE 123 total head, all went unsold; TX 219 total head, all went unsold. The delivery date/weighted averages breakdown is as listed: 1-9 day delivery: 643 head total, 509 head sold, with a weighted average price of $95.16; 1-17 day delivery 747 head total, 150 head sold, with a weighted average price of $95.00.
Expected Slaughter numbers Friday
120,000 hd today 109,000 hd wk ago 117,059 hd yr ago
69,000 hd Sat. 1,000 hd wk ago 64,859 hd yr ago
468,000 hd today 204,000 hd wk ago 460,276 hd yr ago
276,000 hd Sat. 4,000 hd wk ago 38,552 hd yr ago
Midday Carcass Value Friday
Choice up 1.17 204.76
Select dn 0.91 193.92
C/S Spread 10.84
Carcass up 4.01 71.13
Bellies up 2.24 106.19
Corn dn 6 12 – 12 1/4
Soybeans dn 6 3/4 – 10 3/4
Chicago Wht up 2 – 9 1/2
Kansas City Wht dn3 – 4 3/4
Live Cattle up 0.70 – 0.95
Feeder Cattle up 1.12 – 1.42
Lean Hogs dn 0.82 up 0.12
Class III Milk up 0.03 – 0.76
Pre-Opening Market Broker Commentary
Mark Gold, Top Third Ag Marketing, discusses overnight grains and what the trade may see today. China made a big buy of corn. It is WASDE report day and there is a lot of directions it could go.
Jerry Stowell, Country Futures, looks at what may impact the livestock futures today. Fed cattle supplies are becoming more current.
Mike Zuzolo, Global Commodity Analytics, takes a look at the midday trade. The WASDE report is out, but weather is starting to occupy traders mindset again.
John Payne, Daniels Ag Marketing, looks at the grain settlements. The WASDE did not help corn from a global perspective. Payne believes American production will have to address how it plans to handle rising global production.
Jack Fenske, York Commodities, looks at the closing market numbers.
Moving into a strong weather market. We talk about that and marketing the grain you have left with this weeks Trading Bits & Bytes with Jeff Peterson of Heartland Farm Partners. How are the markets comparing the weather of 1988 & 2012?
What is the current driving force in the markets?
What role are the funds currently playing in the corn and soybean markets?
How does a weather market normally progress?
What are you expecting for changes in the WASDE report for corn?
Are you expecting much for changes the WASDE report for soybeans?
Weather is the primary factor and a bigger factor then reports on Friday
Some much-needed rain will hit fields…then watch out here comes the heat
June first to present the U.S. corn belt there were two years that were hotter ’88 & 2012.
Ethanol production continues to increase
Money and coronavirus…deaths per week are at a low
How will COVID continue to effect meat demand
Looking at what the market is looking like…does it look like 2012?
What happened in 2012 with the market?
Can we learn from marketing in 2012 for 2020?
For the first full week of July corn and soybean ratings started to drop slightly across the nation.Corn silking is the first crop condition area we see that is actually behind the five year average. Winter wheat harvest is rolling along ahead of schedule in most states. Top soil and subsoil moisture continue to be dry and dropping across the country.
NASS estimated that 71% of the corn crop was in good-to-excellent condition as of Sunday, July 5, down 2 percentage points from 73% the previous week but still well above 57% at the same time a year ago.
For corn Iowa and Minnesota set at the top of the pile with 85% good-to-excellent condition ratings. Pennsylvania stays a close second at 82% and Nebraska it towards the top at 74% good to excellent. On the opposite end of the scale Michigan and Colorado have the highest percentage of corn rated very poor to poor, at 14% and 16%, respectively.
Up to this point in the growing year much of the crop progress has been well ahead of the five year average. Corn silking however continues to to run behind the five year average. NASS estimated that 10% of corn was silking, 6 percentage points behind the five-year average of 16%.
Soybean development, on the other hand, was near to slightly ahead of normal last week. Soybeans blooming was estimated at 31%, 7 percentage points ahead of the five-year average of 24%, while soybeans setting pods was estimated at 2%, near the five-year average of 4%.
Looking at the state by state break down Iowa is now 37% in bloom, Minnesota 43% and Nebraska 41%. All these ratings are well ahead of their respective 5 year average.
The national soybean condition rating came in the same as the corn crop: 71% good to excellent nationwide. That was unchanged from the previous week and still well ahead of 53% at the same time last year. Iowa was 84% good to excellent, along with Minnesota 83% , Wisconsin 79% and Nebraska 76% .
Meanwhile, winter wheat harvest moved ahead 15 percentage points last week to reach 56% complete as of Sunday, 1 percentage point ahead of the five-year average of 55%.
Harvest in Kansas in 80% complete, Illinois is 81% and Missouri is at 84% finished,. Nebraska winter wheat is 16% harvested, and South Dakota has not started yet.
Winter wheat condition — for the portion of the crop still in fields — was rated 51% good to excellent, down 1 percentage point from 52% from the previous week. Sixty-one percent of North Dakota’s winter wheat crop was rated good-to-excellent.