Headlines:
Driest Areas of Midwest May Get Boost from Rains Next Week
Dry weather in recent weeks has brought crop conditions down from high levels, but precipitation forecast next week may boost ratings. Rainfall is forecast for much of the Corn Belt next Tuesday and Wednesday as a weather system moves up from western Mexico through West Texas and into the Midwest, said Joel Widenor, a meteorologist with Commodity Weather Group in Bethesda, Maryland. Precipitation this week will likely be confined to the extreme eastern part of the Corn Belt, which could give crops a boost in Ohio, Indiana and possibly southern Michigan, but next week’s weather event will be more widespread, he said. “We see a good opportunity to reduce some stress in the driest areas in southern Iowa and Missouri and some parts of northern Illinois that have been missing out as well,” Widenor said. Little or no rain has fallen in much of Missouri and southern Iowa in the past 30 days, according to the National Weather Service’s precipitation page. Weather forecaster Radiant Solutions said in a report Wednesday that the outlook for the next five days calls for drier conditions in much of the central Midwest and central Plains, while it’s expected to be wetter in the southern Delta. “Rains across the Delta would continue to favor corn and soybeans,” the forecaster said. The driest areas will continue to be in northern Missouri, southern Iowa and north-central and far-western Illinois, Radiant said.
Wheat Falls Overnight on Easing Heat in Europe, Argentina Outlook
Wheat futures were lower in overnight trading, falling from the highest prices in three years, as the heat wave in Europe breaks and on reports that Argentina crops are looking good. Temperatures in France are expected to ease late this week following a round of intense heat. Cooler air is expected Friday and into the weekend after temperatures in France and Germany reached almost 100˚F., according to Accuweather. Cooler weather is too late for some crops as Strategie Grains cut its outlook for European Union soft wheat production to 128 million metric tons from about 130 million projected in late July, which is down about 10% from the prior year’s harvest. The hot air will instead be replaced with thunderstorms, which could turn severe and lead to flash flooding or damaging winds, the forecaster said. In Argentina, meanwhile, growers who are finishing planting reported moist soils and cool weather that’s giving crops a boost. While it’s still early in the season, the Buenos Aires Grain Exchange has projected a crop of 19 million metric tons. The USDA has pegged output in Argentina at 19.5 million tons, which would top a record set in the 2007-2008 marketing year.
Summary:
Quiet day with prices softer ahead of the USDA August report. Tomorrow’s report will update its supply/demand and production estimates. Trading are weighing the prospect that China might need to cut its losses and concede defeat in it tariff battle with the US. Indications show that China is running out of retaliatory tariffs against the US and has watched other major parties like the EU and Japan close ranks against it. Some serious discussions are going on in China as they face an escalating trade war with the US which has slowed domestic growth and increased investment restrictions in the US and Europe. There seems to be recognition that the previous playbook drafted by hardliners has not worked and Beijing needs to change its strategy. Beijing’s strategy of a tit-for-tat retaliation over tariffs has been failing. If anything, their strategy escalated the conflict. The direct retaliation after the US announced the first batch of 25% tariffs on 50 billion in Chinese goods (with the increase from 34 billion just finalized and coming into effect on August 23) brought few benefits for China. If anything, it gave the US an excuse to plan for a new batch of tariffs covering an additional 200 billion in Chinese goods. Even still, a China returning to the market place may not be enough to absorb current record soybean yield projections.
