The current Drought Monitor shows Iowa’s Abnormally Dry to Drought area increased almost 17 points last week to now over 79% of the state is in that category, 6% is in the Extreme Drought condition. For the Midwest region however, the dry area declined 3.5% to now 33.8% of the area is categorized as dry. Next week’s forecast brings heat back to most of the cornbelt with some rains, but Iowa is projected to receive little precipitation. The USDA will release its August Crop Production report at 11:00am CT next Wednesday, August 12th. FSA’s initial estimate of crop acreage, including Prevent Plant acres, will be released the same day. Trade representatives from the U.S. and China will video conference August 15th to assess the progress of the Phase 1 deal. A massive explosion in Lebanon’s Port of Beirut is reported by their economy minister to have made wheat reserves there unusable, therefore they will need to start importing replacement supplies.
Argentina’s corn harvest is complete now, with a production estimate of 50mmt by BAGE, the same level as USDA currently. China again sold all the corn offered in its weekly auction, at an average price of about $7.33/bushel, down slightly from last week. Ukraine’s UGA raised the estimate of their corn crop 2.1mmt to 38.9mmt. USDA currently has them estimated at 39mmt. Agroconsult is projecting that Brazil’s total corn crop next year could reach a record 110.3mmt as crop area is expected to increase.
Corn was rated 72% Good/Excellent in the Crop Progress and Condition report, unchanged from last week. Iowa dropped 4 points to 73% G/E. 39% of the crop is in the dough stage, above the 5 year average of 33%. Ethanol production declined 27,000 bpd to 931,000 bpd last week. Ethanol stocks increased by 74,000 barrels to 20.35 million barrels. Corn export sales were 2.7mmt vs. estimates of 2.1mmt – 3.2mmt.
Rusagrotrans increased their estimate of Russia’s wheat crop 3.5mmt to 81mmt because of better than expected yields in the Central region. Egypt’s GASC bought 410tmt of wheat in a snap tender on Wednesday; 120tmt of Russian wheat for September 11-20 shipment and for Sept. 21-30 shipment there was 175tmt Russian plus 115tmt Ukraine wheat. A Canadian farm advisory estimated their all-wheat production could be a record large 38.9mmt while USDA is at 34mmt in their July report. The current record is 37.6mmt. Romania’s wheat crop was estimated to be about 5.5-5.6mmt by their Ag Minister, that would be over 40% smaller than last year’s crop.
Spring Wheat conditions improved 3 points from last week to 73% G/E. Harvest progress increased 4 points over the week to 5% complete; the 5 year average is 10%. Winter Wheat is 85% harvested as of Sunday, close to the average of 88% for this date. Wheat export sales were 610.5tmt vs. estimates of 200tmt-800tmt. China was the largest buyer this past week, purchasing 55tmt SRW and 30tmt HRS.
Brazil is projected to increase their soybean area by 1 million hectares in the coming season, which could result in a record 132.6mmt of production, according to Agroconsult. Abiove estimated Brazil will export 80mmt of soybeans next year amid a forecast of 130.5mmt production there. USDA is currently 83 and 131mmt respectively. Brazil exported a record 10.37mmt of soybeans in July, compared to 7.44mmt in July 2019, according to government data there. China imported 10.09 million tonnes of soybeans in July. This is the 2nd largest monthly import total on record, only behind June of 2020 at 11.16 million tonnes.
Soybeans were rated 73% G/E, up 1% from last week in yesterday’s report. That is the highest rating for this date since 1994. Soybean export sales were outstanding this week. New crop sales were very strong at 1.4 million tons with China buying 1/3 of the total. There was a record 177.28 million bushels of soybeans crushed in June according to the Fats and Oils report. The previous record for the month of June was 169.6 million bushels.
Cash cattle traded much higher this week. Trade in Kansas jumped from $97 to $101. Packer margins continue to remain very strong at $230/head only down slightly from last week.
China’s crude oil imports surged by 25% in July compared to a year earlier. The increase in buying was due to shipments from April arriving late to ports due to delays. China imported a total of 12.08 million bpd of oil in July. BP has announced that it plans to sell a large portion of its oil and gas assets regardless of prices for the commodities. The company stated that the reason in doing so was so that it could invest more in renewable energy. The current national average price of retail gasoline according to AAA is $2.179. Prices a month ago at this time were $2.180 while prices a year ago were running at $2.710.