TOP STORIES:
U.S., Chinese Officials to Meet Aug. 15, Assess Trade Deal
The U.S. and China have agreed to high-level talks on Aug. 15 to assess Beijing's compliance with the bilateral trade agreement signed early this year, according to people briefed on the matter.
The trade pact has emerged as one of the few remaining avenues for the two countries to engage on matters of mutual concern. Relations have deteriorated in recent months, with the Trump administration hammering Beijing over the coronavirus outbreak, Hong Kong and the treatment of Uighurs in western China.
Corn Drops on Higher Yield Forecast
Corn for December delivery fell 2.5% to $3.20 1/4 a bushel on the Chicago Board of Trade Tuesday following new estimates by StoneX of higher crop yields thanks to good weather in the Corn Belt.
Good weather seen for U.S. crops may bring higher yields than previously expected, said StoneX. In its latest forecast for U.S. corn and soybean crops, StoneX predicts corn yields at 182.4 bushels per acre and soybean yields at 54.2 bushels per acre. That's up from the USDA's most recent estimates of 178.5 bushels per acre for corn and 49.8 bushels per acre for soybeans -- and has big implications for 2020 crop production. "If these are close to the actual yield numbers than new crop corn ending stocks are very close to 3 billion [bushels] and new crop soybean ending stocks is pushing 800 million [bushels]," said Craig Turner of Daniels Trading. "This implies harvest lows sub $3 for corn and low $8 for soybeans." StoneX's figures were a main driver of trading Tuesday.
Grain Futures Down as Crop Conditions Stay Strong -- Market Talk
09:13 ET - US crop conditions have stayed high this week, according to the USDA's crop condition report released yesterday. The US corn crop in good or excellent condition stayed at 72% this week, while soybean condition rose one point to 73% good or excellent. Spring wheat rose 3 points to 73% good or excellent as well. For CBOT futures, yesterday's data shows that the weather in the Corn Belt has been supportive for crop growth this year. "Very little of the crop is poorly rated... given current weather outlooks, these numbers are expected to change very little next week as well," says Karl Setzer of AgriVisor. Wheat is down 0.9% pre-market, while corn is down 0.7% and soybeans are down 0.6%. (kirk.maltais@wsj.com; @kirkmaltais)
STORIES OF INTEREST:
Farm Bankruptcies Slow, Slightly -- Market Talk
1413 ET - US farm bankruptcies are rising at a slightly slower pace, though agricultural economists aren't necessarily cheering. The American Farm Bureau Federation says that over the first six months of the year, the pace of new filings declined 4% versus the first half of 2019 -- but the trade group notes that shifting the bankruptcy process online likely contributed to fewer filings. The group says government aid has helped some farmers stave off fiscal collapse, and calls for more. (jacob.bunge@wsj.com; @jacobbunge)
Family Farm Bankruptcies Rise 8% -- Market Talk
14:18 ET - Family farms that declared bankruptcy under Chapter 12 in 1H are up 8% from the same timeframe last year, says the American Farm Bureau Federation. Total filings of farm bankruptcies are down 10 cases to 284 filings in 1H, but family farms make up a bigger portion of those cases. Additionally, bankruptcies reported in the Midwest were up 23% for 1H, according to the AFBF. The implementation of the Cares Act has helped mitigate Chapter 12 filings over the past three months, says John Newton of the AFBF, but with the stimulus expiring, that effect is expected to dissipate. (kirk.maltais@wsj.com; @kirkmaltais)
THE MARKETS:
Cattle Futures Drop After Five Consecutive Higher Sessions -- Market Talk
15:44 ET - After rising for five straight trading sessions, live-cattle futures on the CME fall 0.7% at $1.07475 a pound. It's the highest cattle futures have traded at since early March. Hog futures, meanwhile, finish trading up 1.3% to 49.025c, making up some ground after falling 2.5% to start the week yesterday. "Hog futures have been under pressure as slaughter numbers continue to rise and demand is not following at an equal volume," Karl Setzer of AgriVisor says. "The sheer number of hogs in the US is weighing on the complex." (kirk.maltais@wsj.com, @kirkmaltais)
