Record corn, soybean yield potentialUSDA estimated record U.S. corn, soybean and cotton yields and a record corn crop in its Aug. 12 Crop Production Report. Corn: Production of 15.278 billion bu. on harvested acres

of 84.023 million and a yield of 181.8 bu. per acre. Soybeans: Production of 4.425 billion bu. on harvested

acres of 83.020 million and yield of 53.3 bu. per acre. Wheat: Production of 1.838 billion bu. was increased 14

million bu. from July. The national average all-wheat yield at 50.1 bu. per acre was raised 0.4 bu. from July.Cotton: Production of 18.080 million bales on harvested

acreage of 9.247 million and a yield of 938 lbs. per acre.

August report did not factor in stormsUSDA’s August corn and soybean crop estimates were based on conditions as of Aug. 1 — before the Aug. 10 derecho ripped through the central Corn Belt. USDA says any storm damage will be reflected in future reports.

We’ll assess damage to the corn and soybean crops when we sample fields Aug. 17-20 on the Pro Farmer Crop Tour. If a field we randomly stop at to sample has wind damage but the stalks are not snapped, we’ll measure biological yield potential. If all plants are snapped in the sample area of the field, it will be recorded as a zero.

Sharp rally after USDA reports — Corn and soybean futures rallied sharply following USDA’s August crop reports, despite the initial crop estimates coming in bigger than expected (see first item below) and hefty new-crop ending stocks projections (see News page 2). We advised hedgers and cash-only marketers to take advantage of the strong price rallies by making cash sales (see Analysis pages 2 & 3 for details). China is aggressively buying U.S. new-crop soybeans, but USDA already has strong export demand built into its balance sheet. Wheat futures followed the corn and soybean markets higher. But concerns about price strength choking off export demand limit the upside. Cattle futures extended their rally amid firming cash prices. Hog futures rallied sharply Aug. 10 but then paused.

Update on Phase 1 trade dealDiscussions between the U.S. and China have continued at the working and deputy levels. A rumored Aug. 15 video conference between U.S. Trade Rep Bob Lighthizer and China Vice Premier Liu He has reportedly been delayed, but it’s not be a big deal because there were no major issues to address. Here are some key items our China sources told us:

• All of our China watchers say China will not hit the $36.5 billion target for 2020 ag purchases, but if fourth-quar-ter soybean purchases are around $10 billion as one source indicated the final tally will be closer than many now think.

• “A big U.S. pork sale to China is coming,” one source says. Buys have slowed recently as China tries to boost profitability in its hog sector to promote more domestic production.

• China is “not interested in U.S. DDGS (dried distillers grains with solubles),” one source told us while refusing to give the reason. China also is not expected to purchase much U.S. ethanol as it has scrapped the E10 plans for this year and is “going all out for electric cars.”

• China needs more U.S. corn due to tight domestic sup-plies and the cutback of swill in hog feed. Previously, swill accounted for as much as half of hog feed needs.

• There are concerns whether the U.S. will have the ability to ship all corn sales due to a downed major export facility.

In each corn field — Get past the end rows and then take 35 paces into the field.• At the 35th pace, lay out a 30-foot plot and count all the ears that will make grain on two 30-foot rows.• From one of those two rows, pull the 5th, 8th and 11th ears. This gives us a consistently random process to select sample ears.• Measure the length of grain (in inches, rounded to the nearest one-quarter inch) on each ear.• Count the number of kernel rows around each ear.• Record the row width in the field.• To calculate the estimated yield, take the average number of ears in the two 30-foot rows TIMES the average length of grain per ear TIMES the average number of kernel rows around; DIVIDE the total by row width.Example: (50 ears X 6.5 inches X 16.7 kernel rows) / 30-inch rows = 180.9. This example gives you an estimated yield at that spot in the field of 180.9 bu. per acre.

In each soybean field — Pick a ‘representative spot’ in the field.• Measure 3-foot of row and count all the plants in that plot. Randomly select three plants. Count all the pods on those three plants and calculate the average number of pods per plant.• Multiply the average number of pods per plant by the number of plants in the 3-foot plot. Multiply that number by 36, and divide by row width.Example: (14 plants X 32 pods/plant X 36) / 15-inch rows = 1,075.2 pods in a 3’X3’ square. Compare your results to what we find on Tour.

Time to hit the fields on Crop Tour. Scout your fields, too!While we’re scouting fields across the Corn Belt Aug. 17-20 on the Pro Farmer Crop Tour, you can scout your own fields. That will allow you to compare your results to those we find in other areas of the Corn Belt.

News this week...2 — USDA’s August S&D, certified acreage data.3 — Meat exports slowed by Covid-19. 4 — What you need to know ahead of Crop Tour.

August 15, 2020 Vol. 48, No. 33

Go to ProFarmer.com

August 15, 2020 / News page 2

Follow us on Twitter:@ProFarmer@BGrete

@ChipFlory@JWilson29

@DavisMichaelsen@MeghanVick #PFTour20

Low FSA acres, but big PP Farm Service Agency (FSA) data showed certified acres at 81.1 million for corn, 75.9 million for soybeans, 44.1 million for wheat and 11.1 million for upland cotton as of July 31. Corn acres were the fewest reported in August since the data was made public in 2011, with soybeans also historically low.

Some of the low FSA acreage figures can be explained by added flexibility on acreage reporting due to Covid-19. USDA waived the late fee for 30 days for all remaining acreage reporting dates for the 2020 crop year.

But prevent-plant (PP) acres for the 10 major crops were big at 9 million acres, with 5.4 million for corn and 1.2 million for soy-beans. North Dakota led PP reportings at 2.6 million acres, followed by South Dakota at 1.2 million and Arkansas at 1.1 million acres. Those three states accounted for 54% of PP reportings through July 31. Combined PP and planted/failed acres for the major 10 crops at 235 million were 10 million less than any other year for August since 2011.

USDA’s National Ag Statistics Service (NASS) did not change harvested acres for corn or soybeans from its June esti-mate. NASS lowered its harvested acre-age estimate for cotton by 1 million acres.

Global wheat revisions USDA lowered global wheat production for 2020-21 by 3.7 MMT this month, led by a 4-MMT reduction for the EU. USDA also trimmed 1 MMT each from Kazakhstan Turkey and 500,000 MT from Argentina. Those cuts more than offset increases of 1.5 MMT for Russia and 500,000 MT for Ukraine. Despite the smaller global wheat production forecast, USDA raised its glob-al wheat ending stocks as use was trimmed more than supplies.

Brazil corn crop raised Conab raised its Brazilian corn crop esti-mate for this year to 102.1 MMT, roughly a 1.6-MMT increase from July due mostly to a bigger safrinha crop. Conab kept its 2019-20 corn export projection at 34.5 MMT. It raised the 2019-20 Brazilian soy-bean export forecast to 82 MMT.

August U.S. and global S&D highlightsCornU.S. carryover — 2019-20: 2.228 billion bu., down 20 million bu. from July; 2020-21: 2.756 billion bu., up 108 million bu. from July. Avg. cash price — 2019-20: $3.60, unchanged from July; 2020-21: $3.10, down 25¢ from July.Global carryover without China — 2019-20: 107.2 million metric tons (MMT), down 650,000 metric tons (MT) from July; 2020-21: 123.4 MMT, up 2.4 MMT from July.

SoybeansU.S. carryover — 2019-20: 615 million bu., down 5 million bu. from July; 2020-21: 610 million bu., up 185 million bu. from July. Avg. cash price — 2019-20: $8.55, unchanged from July; 2020-21: $8.35, down 15¢ from July.Global carryover without China — 2019-20: 68.6 MMT, down 3.8 MMT from July; 2020-21: 68.1 MMT, up 270,000 MT from July.

WheatU.S. carryover — 2020-21: 925 million bu., down 17 million bu. from last month. Avg. cash price — 2020-21: $4.50, down a dime from July.Global carryover without China — 2019-20: 149.2 MMT, up 3.3 from last month; 2020-21: 154.1 MMT, up 1.4 MMT from July.

CottonU.S. carryover — 2019-20: 7.2 million bales, up 100,000 bales from July; 2020-21: 7.6 million bales, up 800,000 bales from July. Avg. cash price — 2019-20: 59.5¢, up 0.5¢ from July; 2020-21: 59¢, unchanged from July.Global carryover without China — 2019-20: 63.8 million bales, down 110,000 bales from July; 2020-21: 69.3 million bales, up 1.9 million bales from July.

Corn CarryoverU.S. (Bil. Bu.)/Global* (MMT)

Soybean CarryoverU.S. (Mil. Bu.)/Global* (MMT)

Wheat CarryoverU.S. (Mil. Bu.)/Global* (MMT)

Cotton CarryoverU.S. (Mil. Bales)/Global* (Mil. Bales)

* Without China

* Without China

* Without China

* Without China

August 15, 2020 / News page 3

Meat exports slow dramatically in June The U.S. exported 515.3 million lbs. of pork during June — the smallest shipments since September of last year and the first monthly figure under 600 million lbs. since last November. Pork exports were still 16.3 million lbs. (3.3%) larger than June 2019, despite China being the only destina-tion of the top five to register a year-over-year increase. Through the first half of 2020, U.S. pork exports at nearly 3.8 billion lbs. were up 27.4% from the same period last year. USDA raised its 2020 pork export forecast by 24 mil-lion lbs. and now expects shipments to top year-ago by 19.4%. USDA did not adjust its 2021 pork export forecast, though another 1.4% increase is expected.

U.S. beef exports totaled 183.3 million lbs. in June, down 90.4 million lbs. (33%) from last year and the lowest figure since February 2016. During the first six months of this year, beef shipments at nearly 1.4 billion lbs. were down 7.6% from last year. USDA lowered its 2020 beef export projection and now expects shipments to fall 4.3% from last year. Its 2021 forecast was unchanged but exports are expected to rise 8.4%.

Chinese hog numbers bottoming USDA’s attaché in China expects “swine production and slaughter to hit record-lows” this year as African swine fever (ASF) continues to impact the country’s hog sector. But it expects supplies to bottom in 2020, with hog and sow invento-ries expected to climb 9% and 15%, respectively, in 2021. The attaché expects Chinese pork production to rebound to 41.5 MMT next year from a projected 38 MMT this year. It expects pig inventories to rebound to 370 million head by the end of 2021— equivalent to more than 80% of pre-ASF levels. Consequently, the attaché expects China’s total pork imports to peak this year at 4.3 MMT and decline to 3.7 MMT in 2021.

China expects bigger feed use China’s ag ministry raised its 2020-21 soybean import forecast by 1.5 MMT from last month to 95.1 MMT, though that would be down from an estimated 96 MMT of imports in the current marketing year. The ag ministry left its 2020-21 corn import forecast at 5 MMT, which would be down 1 MMT from this year, despite expectations of higher corn-for-feed use and increased purchases from the U.S. under the Phase 1 trade deal.

High pork prices fuel China CPI rise China’s consumer price index (CPI) rose 2.7% versus year-ago in July. Non-food prices were unchanged, but food prices increased 13.2%, driven by an 87.9% surge in pork prices. Consumer pork prices increased 10.3% from June.

China’s factory gate prices fell for the six straight month in July but at a slightly slower rate than expected. The pro-ducer price index (PPI) fell 2.4% from a year earlier.

Producer Crop Comments...Please send crop comments to editors@profarmer.com.

Black Hawk Co. (northeast) Iowa:“I traveled to Ringgold County in south-central Iowa and back. Crops looked very good from the road along Highway 20 and I-35 north of Ames. South of Ames, some of the corn on hills and lighter soils was show-ing some stress. Beans looked especially strong along the entire route. We took the Highway 330/Highway 14 ‘diagonal’ from Des Moines north on the way home. Crops looked the same as on the drive down, with lim-ited crop stress. But that was a day before the devas-tating derecho flattened crops through central Iowa.”

Greene Co. (west-central) Iowa:“Corn was suffering from drought. Then we got a little rain and my hopes increased. But then the derecho storm roared through. All of my corn fields are flat and a bit of it is snapped. Sad thing is, we sprayed fungi-cide on Aug. 8 to help with standability this fall. Don’t need to worry about that now.”

Pottawattamie Co. (southwest) Iowa:“Beans on lighter soils are giving up.”

Crawford Co. (west-central) Iowa:“From our place to Cedar Rapids is 200 miles. Almost every field from Ames to Cedar Rapids along Highway 30 is flat. The closer you get to Cedar Rapids, the worse it is. I’ve never seen that much devastation. More bins are dam-aged than not. Beans look like they had a roller in them.”

Peoria Co. (central) Illinois:“We had high wind reported in our county but I haven’t heard or seen any wind damage to corn yet.”

Pike Co. (west-southwest) Illinois:“We had four inches of recent rain. Corn is denting and soybeans are filling, though there are some issues with wet feet. Thankfully, we only lost tree branches from the high winds.”

Newton Co. (northwest) Indiana:“Our highest wind gust hit 73 mph, according to the local news. None of our corn is down. Thank the Lord. I drove around quite a bit and didn’t see any laying flat.”

Greene Co. (southwest) Indiana:“Our crops were picture perfect three weeks ago but the flat bottom ground is now hurt by too much water. However, our high ground will make up for some of the losses on the bottoms. Overall, we have a big crop.”

Paulding Co. (northwest) Ohio:“We received 0.2 to 0.6 inch of rain locally on Aug. 10. It’s better than nothing and we didn’t have the damag-ing winds others dealt with.”

Waseca Co. (south-central) Minnesota:“Found the first instance of SDS in soybeans.”

Gage Co. (southeast) Nebraska:“Our 2.6 soybeans should have enough water to finish at this point.”

Nuckolls Co. (southeast) Nebraska:“Corn and soybeans are in great shape.”

August 15, 2020 / News page 4

Due to Covid-19, the number of scouts participating on Crop Tour is down from past years and we’ve taken

precautions by reducing scouting teams to two people. As a result, our sample numbers will be down from previous years. But the measuring procedure and routes we randomly sample will remain the same. Because USDA no longer col-lects objective yield samples in August, this will be the indus-try’s first broad look at field data from across the Corn Belt.

How to receive up-to-date information from TourThere will be exclusive daily route reports from Tour

leaders on www.profarmer.com/crop-tour. Also, don’t for-get to log onto the live-streamed Crop Tour meetings each evening where you will get daily Tour results and route observations from Tour participants.

Brian Grete, Eastern Tour Consultant Mark Bernard and Jeff Wilson, will provide daily commentary in “From the Rows” on www.profarmer.com and on the Pro Farmer app. Also, tune into AgriTalk each day at 10:06 a.m. and 2:06 p.m. CT on www.agweb.com/agritalk or the AgriTalk app, or your favorite farm radio station to hear a Crop Tour update from Chip Flory and Davis Michaelsen.

Search #PFTour20 on Twitter to get Tour-related tweets and follow @BGrete, @JWilson29, and @MNWeedWizard for tweets from the field each day. Follow @MeghanVick and @profarmer for daily Tour results.

Compare with last year; apply the historical difference!The best analysis of this year’s data will be to compare

state-by-state results to last year’s Tour, with close atten-tion to the percentage changes. Also, apply the historical difference for each state! We know the yield calculated dur-ing Crop Tour will be different than USDA’s final yield for each state. Fortunately, we know by how much on average.

The historical difference is the result of where the Tour travels. Examples: In Nebraska, about 60% of the corn crop is irrigated, but Crop Tour samples include about 40% irri-gated fields. In Minnesota, we cover only the highest yield-ing southern districts. There are reasons for the differences and understanding them makes Tour yields valuable.

On soybeans... no yield, but lots of data!The number of pods it takes to make a bushel is different

in each state. Instead of yield, we calculate the number of pods in a 3X3-foot square. Compare pod counts to past Tour data to get an idea about the size of this year’s yield “factory.”

All Samples

Ohio

Illinois

South Dakota

Minnesota

Nebraska

Iowa

Indiana

The best piece of data —The most reliable set of data is the average yield of all corn samples from the seven Tour states. On average since 2001, the yield cal-culated from all corn samples has been 6.0 bu. above USDA’s final national average corn yield. (The average yield from the seven Tour states — Ohio, Indiana, Illinois, Iowa, Minnesota, South Dakota and Nebraska — should pull up the national average yield!)

Historical Difference —Tour Yield Vs. USDA Final

(avg. since 2001)

Ohio ADD 3.6 bu.Indiana ADD 2.8 bu.Illinois ADD 2.4 bu.Iowa ADD 5.6 bu.Nebraska ADD 15.1 bu.Minnesota SUB 8.0 bu.S. Dakota SUB 4.9 bu.7-State SUB 6.0 bu.

On each of the charts above, USDA’s 2020 yield is the Aug. 1 yield estimate. For all other years, USDA’s yield is the final yield.

Ground-truthing this year’s corn, soybean yield potentialby Pro Farmer editors

News alert and analysis exclusively for Members of Professional Farmers of America® 402 1/2 Main St. Cedar Falls, Iowa 50613-9985General Manager Joel Jaeger • Editor Brian Grete • Editor Emeritus Chip Flory • Sr. Market Analyst Jeff Wilson • Chief Economist Bill Nelson

Washington Policy Analyst Jim Wiesemeyer • Digital Managing Editor Meghan Vick • Inputs Monitor Editor Davis MichaelsenSubscription Services: 1-800-772-0023 • Editorial: 1-888-698-0487

©2020 Professional Farmers of America, Inc. • E-mail address: editors@profarmer.comFarm Journal CEO, Andrew Weber

Feed MonitorFEED

Corn Game Plan: You should re-main hand-to-mouth on corn-for-feed needs until the market signals a low is in place. Be prepared to be a buy-er once a seasonal low is confirmed.

Meal Game Plan: Livestock producers should have soybean meal coverage in the cash market through the end of August. Our next downside target is sub-$280.00 basis December futures.

Corn III’20 0% IV’20 0% I’21 0% II’21 0%

Meal III’20 66% IV’20 0% I’21 0% II’21 0%

Analysis page 1

DAILY DECEMBER MEAL

$308.90

$301.90

DAILY OCTOBER LEAN HOGS

Position Monitor

HOGS - Fundamental AnalysisFutures are following the strengthening cash and product markets. Pork cutout values have rallied more than $10 from the July lows, led by strength in hams, ribs and bellies. The CME Lean Hogs Index touched the highest since early June. Market hog weights are slowly retreating, a sign that producers’ feed management changes are helping to ease the backlog of pork supplies. But market-ready animals are going to remain record large into the fall, and that will require some help from the export market. China reduced prior purchases in the weekly export sales report but should return in coming weeks.

Game Plan: Fall and winter con-tracts don’t reflect typical seasonal price weakness. However, hedges are risky unless you can lock in a profit. Rallies are hedging opportunities.

BEEF PRODUCTION (MILLION LBS.)

PORK PRODUCTION (MILLION LBS.)

Position MonitorGame Plan:Fed cattle p r o d u c e r s should keep all risk in the rising cash market. We plan to hedge on further strength or signs the rally has stalled.

Feds Feeders III’20 0% 0% IV’20 0% 0% I’21 0% 0% II’21 0% 0%

Bulls must clear the July high near $54.975 to energize

upward momentum from the June low.

Initial support at the broken resistance linenear $50.45 is backed by the 40-day moving average (green line) near $50.00.

DAILY OCTOBER LIVE CATTLECATTLE - Fundamental AnalysisThe uptrend continues, with prices rising to the highest level since early March. Beef cutout values reached the highest price since June 14, boosting packer margins. Cash bids finally led the rally, with prices gaining $2 to $4 last week, reducing futures’ premiums to the cash market. As beef prices and supplies normalize, retailers continue to expand beef featuring. That has produced stronger domestic demand for wholesale beef supplies. USDA’s beef featuring index rose to the highest since mid-March. Export demand has slowed recently and that may cap rallies.

$54.975

Consecutive closes above $108.45 target downside gap resistance from February at $112.425 (not shown).

Initial support at the uptrend line near $105.10 is backed by the 40-day

moving average (green line) near $104.35.

$108.45

$57.375

August 15, 2020ANALYSIS

Lean Hogs III’20 0% IV’20 0% I’21 0% II’21 0%

Initial resistance is at the June high near $301.90. Strong resistance is at $308.90.

Initial support is at $287.50.Stronger support is at $280.00 (not shown).

$287.50

August 15, 2020 / Analysis page 2

$5.07

$4.79 1/2

$5.25 1/4

DAILY DECEMBER SRW WHEAT

WHEAT - Fundamental AnalysisSRW - Prices consolidated below support as world use is forecast down more than production, leaving inventories at a new record high. Export competition will remain intense, and that offsets USDA’s projection for the lowest U.S. ending stocks in six years.

Position Monitor

Game Plan: Use rallies to get current with cash sales. Maintain the short hedges in December SRW futures. The market’s function is to stay low to help buy some global export demand. Rallies will be led by a new overseas weather threat.

Initial resistance at the May low at $5.07 is backed by the 40-day moving average (green line) near

$5.17 3/4. Stronger resistance is at $5.25 1/4.

Strong support is thecontract low at $4.79 1/2.

CORN EXPORT BOOKINGS (MMT)AVERAGE CORN BASIS (SEPTEMBER)

CORN - Fundamental AnalysisPrices jumped to four-week highs as derecho winds on Aug. 10 ripped through the Midwest, laying crops down and chasing funds out of some short positions. The extent of the damage will take time to assess and next week’s Pro Farmer Crop Tour will be part of that discovery process. Historically, weather events like last week have limited impact on national production, albeit devastating to those impacted. Iowa crop losses will do little to alleviate abundant world supplies. The market will need to generate better demand amid rising competition. Ukraine continues to offer corn into China as Brazil wraps up the harvest of a record crop with plans to seed more next year.

Initial resistance is at $3.54. Stronger resistance is at $3.59 3/4.

Initial support is at $3.41. Stronger support is at $3.33 3/4.

DAILY MARCH CORN

$3.41

$3.54

$3.33 3/4

$3.59 3/4

DAILY DECEMBER CORNPosition Monitor

Game Plan: On Aug. 14, we advised hedgers and cash-only marketers to sell the final 10% of 2019-crop to complete sales. Hedgers were also advised to exit the 10% old-crop hedge in De-cember futures. We also recommended hedgers and cash-only marketers sell another 10% of expected 2020-crop production for harvest de-livery to get to 40% forward priced. Maintain the 20% short new-crop futures hedge position.

Initial resistance is at the July 10 low at $3.43 3/4. Stronger resistance is at the June high of $3.48 1/2.

Initial support is at $3.25. Strong support remains the Aug. 5 contract low at $3.20.

$3.43 3/4

$3.20

$3.25 1/2

$3.48 1/2

’19 crop ’20 crop

Cash-only: 100% 40% Hedgers (cash sales): 100% 40% Futures/Options 0% 20%

’20 crop ’21 crop

Cash-only: 65% 10% Hedgers (cash sales): 65% 10% Futures/Options 20% 0%

August 15, 2020 / Analysis page 3

DAILY SEPTEMBER HRS WHEATDAILY DECEMBER HRW WHEAT

HRW - Russian exporters are aggressively pricing supplies now that farmers are selling this year’s harvest. Russia sold 415,000 MT to Egypt last week. U.S. exports have slowed in recent weeks, contradicting USDA’s increase to its U.S. sales forecast last week. Rising La Niña predictions could be a bad omen for U.S. winter wheat output in 2021.

DAILY MARCH SOYBEANS

HRS - USDA raised its spring wheat crop forecast 28 million bu. from its July forecast on higher yields. Expectations for a bumper Canadian crop will keep competition tough going into the winter. Wheat shipments may compete with rail cars carrying corn soybeans to the Pacific Northwest for exports to China.

The downtrend is initial resistance. Strong resistance is at $4.95.

Support is the Aug. 7 contract low at $4.20 3/4

$4.95

Initial resistance at $5.07 1/2 is backed by the 40-day moving

average at $5.12.

Initial support is the Aug. 10contract low at $4.90 1/2.

$9.09 3/4

$8.85

Initial resistance is at $9.09 3/4.Stronger resistance leftfrom February is at$9.25 (not shown).

Prices bounced off $8.85 and the uptrend from the

April low, marking them as strong support.

SOYBEAN EXPORT BOOKINGS (MMT)AVERAGE SOYBEAN BASIS (NOVEMBER)

WHEAT EXPORT BOOKINGS (MMT)

AVERAGE WHEAT BASIS (SEPTEMBER)

SOYBEANS - Fundamental AnalysisFutures jumped, despite USDA forecasting a record national yield and raising U.S. ending stocks, as traders’ attention swung to potential crop damage. The hurricane-force winds left a trail of damage in the Midwest and that was evident from social media pictures, triggering fresh speculative buying. Adding to the bullish tone were drier, but not dry forecasts, despite cooler temperatures. The eight consecutive days of daily USDA announcements of new Chinese purchases through Aug. 14 on top of stepped-up buying in recent months lifted total U.S. export sales from a 10-year low in April to a 10-year high. More China demand and confirmation of actual crop losses are needed to sustain rallies.

Initial support is the 40-day moving average (green line) near $8.87. Strong support is the uptrend line near $8.66.

Position Monitor ’19 crop ’20 crop

Cash-only: 100% 50% Hedgers (cash sales): 100% 50% Futures/Options 0% 20%

Game Plan: On Aug. 14, we advised hedgers and cash-only marketers to sell another 10% of expected 2020-crop production for harvest delivery to get to 50% forward-priced. Use the current market strength to make catch-up sales on final 2019 supplies and 2020-crop. Hedgers are also short November futures to hedge 20% of expected 2020-crop production. Maintain a buy-stop at $9.05 to exit that position.

DAILY NOVEMBER SOYBEANSConsecutive closes above the downtrend line near $8.97. would target resistance at July 6 high at $9.12 1/2.

August 15, 2020 / Analysis page 4

’20 crop ’21 cropCash-only: 30% 0% Hedgers (cash sales): 30% 0% Futures/Options 0% 0%

Free Crop Tour MeetingAttend the digital Crop Tour meetings for live results, scout observations and historical analysis. Register for free: www.profarmer.com/register.

USDA Cattle on Feed ReportPlacements increased in July.

FRI 8/212:00 p.m. CT

5

Pro Farmer Crop EstimatesOur corn, soybean crop forecasts.

FRI 8/211:30 p.m. CT

4

USDA Cold Storage ReportClues to meat demand last month.

THUR 8/202:00 p.m. CT

3

USDA Export Sales ReportChina buying remains the focus.

2

USDA Crop Progress ReportHow much wind damage occurred?

MON 8/173:00 p.m. CT

1

WATCH LIST

THUR 8/203:00 p.m. CT

final USDA soybean yield rose 26 times from August or 58% of the time.

USDA estimated a national average corn yield of a record 181.8 bu. per acre.

Since 1975, USDA forecast record corn yield in August 12 times before this year. The final yield was higher in the January final estimate in five years of those years. The average increase for all five years was a 7.0-bu. by the final esti-mate. In the other 33 years, the yield rose 19 times by the final estimate in January.

This week’s Pro Farmer Crop Tour will help provide ground truth about the size of the soybean factory and, more importantly, measure corn yield poten-tial after the wind damage last week.

USDA used a combination of farmer surveys and satellite imagery to estimate U.S. soybean yields will rise to a record 53.3 bu. per acre this year, well above the pre-report estimate of 51.2 bushels.

Given the current high crop ratings, recent rains and historical changes, U.S. soybean yields may end up even higher by the final estimates in January.

Since 2000, USDA’s August yield esti-mate was too low 70% of the time com-pared with the final. This year was only the seventh time since 1975 that USDA forecast a record national yield in August.

In four of those six prior years, the agency raised its yield by the final esti-mate, including 3.2 bu. in 2016 and 2.4 bu. in 2014. For all years since 1975, the

By Sr. Market Analyst Jeff WilsonFROM THE BULLPEN

Interest Rates: U.S. Treasury yields rose to a one-month high as the number of new Covid-19 cases fell, signs of eco-nomic green shoots emerged and infla-tion worries increased.

U.S. producer and consumer prices rose more than expected in July, adding to the inflation worries already signaled by the record-breaking rally in gold.

Core prices last month increased at the quickest pace in 29 1/2 years amid

GENERAL OUTLOOKbroad gains in the costs of goods and services. The jump helps dispel fears that a general decline in prices will lead to consumers and businesses delaying purchases and slowing the economy.

The Federal Reserve and Congress will continue to pump money into the economy to jump start growth.

Don’t expect a sudden surge in bor-rowing costs but make sure you look to lock rates for as long as possible.

DAILY DECEMBER COTTON

Game Plan: Make sure you are cur-rent with advised 2020-crop sales. We are targeting additional new-crop sales above 65.00¢ in December futures.

Position Monitor AVERAGE COTTON BASIS (OCTOBER)

COTTON - Fundamental AnalysisUSDA surprised the trade by sharply increasing its yield forecast to a record, more than offsetting a 1-million-acre cut in harvested acreage. World and U.S. ending stocks are rising amid slowing demand and big crops. U.S. exports slowed again, with China cancelling some prior purchases.

COTTON EXPORT BOOKINGS (’000 BALES)

DAILY U.S. 10-YEAR TREASURY NOTE YIELD

Initial support at the 40-day moving average (green line)

near 62.15¢ is backed by the uptrend line near 60.60¢.

A close above the July high at 64.90¢ could spark a test of prior support from earlier this year in the 66.00¢ to 69.00¢ area (not marked).

64.90¢64.90¢

U.S. 10-year yields are U.S. 10-year yields are breaking out above breaking out above the 100-day moving the 100-day moving

average, a sign of average, a sign of market bottoming. market bottoming.