Scattered rains and seasonal tempsAfter a hot weekend across the Corn Belt, a weak high-pressure ridge is expected to shift to the west, bringing cooler temps and scattered rains across the Corn Belt this week. World Weather Inc. says, “Precipitation through the first half of August is expected to be highly variable with some areas getting more than others and some pockets of net drying. However, no widespread problems with dry-ness are expected during that period.”

U.S./China cold war brewingThe U.S. ordered China last week to close its consulate in Houston. Beijing retaliated by telling the U.S. to close its consulate in Chengdu. U.S. Secretary of State Mike Pompeo says, “The truth is that our policies, and those of other free nations, resurrected China’s failing economy, only to see Beijing bite the international hands that fed it. The CCP [Chinese Communist Party] ripped off our prized intellec-tual property and sucked supply chains away from America.”

China likely to fulfill grain TRQsThe rancor between the Trump administration and Beijing is worsening and President Donald Trump says the trade deal “means less to me now than it did when I made it.” But China is actively buying U.S. grains and is expected to fulfill its low trariff rate quotas (TRQs) as it agreed to under the Phase 1 deal. China imported 3.66 million metric tons (MMT) of corn and 3.35 MMT of wheat during the first half of this year. That put China’s corn imports at 51% of the 7.2 MMT TRQ for this year and wheat at 35% of the 9.64 MMT quota. One source told us, “China is going to import more corn from the U.S. and other origins than most realize.”

Key China policy meeting this weekA meeting of China’s top decision-making body, scheduled for the end of this month, will be closely watched by econo-mists and analysts for signals from the top Chinese leader-ship over what Beijing will do next. The economy, Covid-19 and the trade war are all on the agenda.

Soybeans firm on demand, grains pause — Soybean futures worked slightly higher last week on active demand from China and “unknown destinations.” The string of daily soybean sales announcements extended to nine consecutive days on Friday, countering gen-erally favorable weather for crop development. The corn market paused after finding no fol-lowthrough selling below the mid-July lows, suggesting strong crop ratings and yield pros-pects are mostly factored into prices. Wheat futures chopped sideways last week, though the market showed strength Friday amid the falling dollar, raising hopes for improved demand for U.S. supplies. Cattle futures retreated from their recent highs as traders waited on the cash market to catch up. Hog futures were pressured by their premiums to the cash index.

Still work to do on next Covid aid Democrats want specific legislation for the next Covid aid. Many Republicans prefer specific legislation as well, but the Senate may start out with broad, general authority. The ag aid provisions we cover on News page 4 are mostly from the House plan, which would be better for livestock, specialty crops, and dairy. But, it would not be good for row crops and wouldn’t cover livestock, dairy, or specialty crops if losses occur in the third and fourth quarters. A source says, “The Senate lan-guage may be broad enough to encompass 2020 crops.”

Cattle price probe continues USDA reached no conclusions on whether beef processors vio-lated laws in the wake of the August 2019 fire at the Holcomb, Kansas, Tyson plant or the Covid-19 pandemic. An investiga-tion into potential Packers and Stockyards Act violations is ongoing by the Department of Justice. Therefore, USDA can’t “publicly report the full scope and status of the investigation.”

The USDA report says a reduction in non-reporting of information under Livestock Mandatory Reporting would “provide improved price discovery” for the industry. However, there has yet to be an industry consensus on how to address the subject.

Biden would target 1031 exchanges Presumptive Democratic presidential candidate Joe Biden unveiled a $775 billion plan to bolster child care and care for the elderly that would be funded by real estate taxes, includ-ing like-kind exchanges. A senior campaign official said a Biden administration would take aim at like-kind exchanges, which allow investors to defer paying taxes on the sale of real estate if the capital gains are reinvested in another property.

Free digital Crop Tour meetings There will be digital nightly meetings, including live results, scout observations and historical analysis of the data during the Pro Farmer Crop Tour Aug. 17-20. You can participate in these virtual meetings no matter where you live. Register for free at www.profarmer.com/register.

News this week...2 — Corn, soybean crop ratings remain above average.3 — Another set of data showing strong pork demand. 4 — The next stimulus package, including ag relief.

July 25, 2020 Vol. 48, No. 30

Go to ProFarmer.com

July 25, 2020 / News page 2

Follow us on Twitter:@ProFarmer@BGrete

@ChipFlory@JWilson29

@DavisMichaelsen@MeghanVick

IGC cuts global corn, wheat cropsThe International Grains Council (IGC) cut its 2020 global wheat production forecast by 6 million metric tons (MMT) from last month to 762 MMT, which would be in line with last year’s output. Smaller wheat crops are forecast for the U.S., Russia and the European Union. IGC trimmed projected 2020-21 global wheat stocks by 2 MMT to a still-record 288 MMT.

IGC lowered its global corn crop forecast by 5 MMT from last month, though production is still expected to rise 47 MMT from last year. The bulk of the cut was to the U.S. crop in response to the much-lower-than-expected U.S. planted acreage. IGC left its 2020-21 global corn ending stocks projection at 288 MMT, which would be down 12 MMT from the current marketing year.

IGC raised its 2020 global soybean crop forecast by 1 MMT on bigger Brazilian supplies. It also increased its soy-bean trade forecast by 1 MMT from last month amid expected bigger exports out of South America. Global soy-bean trade is now forecast up 3 MMT from 2019-20.

Chinese feedgrain imports surgeChinese imports of corn, wheat, sorghum and barley rose notably from year-ago levels during June amid tight domes-tic feedgrain supplies. China imported 880,000 metric tons (MT) of corn last month, which was a 23% rise from year-ago, with 2020 imports now at 3.66 MMT, up 17.6% from the first half of last year. Its wheat imports nearly tripled to 910,000 MT in June, with total shipments for 2020 now at 3.35 MMT, a 90.3% gain from year-ago. China’s sorghum imports shot from negligible levels in 2019 to 680,000 MT in June, with the year-to-date tally now at 1.78 MMT. China imported 500,000 MT of barley in June, which more than doubled from last year, though January-to-June shipments at 2.44 MMT were down 21% from the same period last year.

China plans to sell wheat, rice stocksChina plans to sell wheat and rice from its state reserves to animal feed producers, according to three sources cited by Reuters. The sources indicate that around 10 MMT of rice could be sold through state firms directly to feed makers rather than regular auctions to the broader market.

Chinese corn prices have surged more than 20% to five-year highs amid tight domestic supplies. Chinese end-users continue to buy all supplies put up for auction, despite rising prices and suspect quality.

Given the tight supplies and the big spread between domestic prices and U.S. corn, combined with transporta-tion disruptions from major flooding along the Yangtze River, China-based Shanghai JC Intelligence Co. expects China to continue to import high quantities of corn and other feedgrains.

Corn crop conditions hold, CCI dropsUSDA made no changes to its corn crop condition ratings for the week ended July 19, with 69% of the crop rated “good” to “excellent” and 8% “poor” to “very poor.” But on the weight-ed Pro Farmer Crop Condition Index (CCI; 0 to 500 point scale, with 500 representing perfect), the corn crop slipped 2.4 points to 376.2 points. The corn crops in Iowa and Nebraska dropped one point each. The corn CCI rating for the third week of July was still 4 points above the five-year average.

Soybean crop ratings improveUSDA rated 69% of the U.S. soybean crop as “good” to “excellent,” up one point from the previous week. Only 7% of the crop was rated “poor” to “very poor,” unchanged from the week prior. The soybean crop inched 0.4 point higher on our CCI to 369.3 points, which is 13 points above the five-year average for the third week of July.

Spring wheat CCI rating jumpsUSDA maintained its 68% “good” to “excellent” rating for the U.S. spring wheat crop. But that included a two-point rise in the “excellent” category and a one-point drop in the “poor” to “very poor” categories to 7%. On our CCI, the spring wheat rating improved 4.5 points to a 373.3 rating, with the North Dakota crop accounting for 2.6 points of the increase. Our CCI rating is 12.4 points above the five-year average.

Texas cotton crop improvesUSDA raised its “good” to “excellent” rating for the cotton crop by three points to 47%. Its “poor” to “very poor” rat-ing dropped four points to 22%. The Texas crop improved notably, with ratings rising five points in the top two cate-gories and dropping seven points in the bottom two. But only 28% of the Texas cotton crop is rated “good” to “excel-lent,” with 34% still “poor” to “very poor.”

The cotton CCI improved 4.4 points to a 344.1 rating, which is still 7.4 points below the five-year average for this week. The Texas CCI rating improved 3.8 points.

Root Zone Soil Moisture

982 20 70 90

nasagrace.unl.edu%

The central Corn Belt generally has sufficient soil moisture within 1 meter of the surface. But there are pockets of dryness in the west-ern/northwestern Corn Belt and especially in far eastern areas of the region. Root zone soil mois-ture is the lowest in the Southwest.

July 25, 2020 / News page 3

Demand chews through extra pork USDA’s Cold Storage Report showed there were 464.4 million lbs. of pork in frozen storage at the end of June, a 3.6-million-lb. (0.8%) decline from the month prior. While that was well shy of the five-year average drawdown of 30.2 million lbs. for June, it came amid a 6.9% increase in pork production, sig-naling demand is chewing through extra supplies. Pork inventories were down 155.1 million lbs. (25%) from June

2019 and 127.9 million lbs. (21.6%) under the five-year average.

Beef stocks at the end of June totaled 428.1 mil-lion lbs., up 10.8 million lbs. (2.6%) from May ver-sus the five-year average of a 1.8-million-lb. draw-down during the month.

The slow reopening of the restaurant sector was the major reason for the rise in beef stocks in June. Beef stocks were up 22.5 million lbs. (5.5%) from last year but down 13.6 million lbs. (3.1%) from the five-year average.

Total poultry stocks at 1.337 billion lbs. were up 50.8 mil-lion lbs. (3.9%) from May but 41.6 million lbs. (3%) under year-ago. Frozen chicken breasts were a June record at 214.7 million lbs., due largely to slowed restaurant demand.

China pork imports remain strong China imported 400,000 metric tons (MT) of pork in June, a 128% surge from year-ago. Halfway through the year, China has imported 2.12 MMT of pork, a 143% surge from year-ago. When offal is included, China imported 540,000 MT of pork in June, up 102.5% from year-ago, and 2.82 MMT from January to June.

China’s beef imports including offal in June were 180,000 MT, up 31% from a year earlier, with shipments for the first half of 2020 reaching 1.01 MMT.

China heightens Covid-19 meat regs China’s National Health Commission says imported meat products must now come with certificates for passing nucleic acid tests for Covid-19 before being processed in Chinese plants. Meat processors will need to keep track of the source of poultry and meat and establish a complete traceability mechanism. The guidelines also say that ani-mals to be slaughtered should come from non-epidemic areas, without specifying regions. Meat processors in medi-um- and high-risk areas must collect five environmental samples for nucleic acid tests, while those in low-risk areas must do sample testing at least once every week. Experts continue to say the virus cannot be transmitted by food.

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

Central Illinois:“I’ve been missing the rains for the past month or more, but we got 0.9 inch on July 19. Perfect timing.”

Seneca Co. (north-central) Ohio:“We are extremely dry and crops are looking worse with each passing day. We completely miss or get very little rain. The fronts that come through literally fall apart by the time they reach us. This will be the 5th year in a row with poor crops.”

Guthrie Co. (west-central) Iowa:“It’s heartbreaking. Our corn is tightly rolled, brown and crispy. Less than two inches of rain since June 1.”

Southwest Iowa:“Conditions remain very dry and rains July 20-21 did lit-tle more than settle the dust. Compared to corn I saw driving to Okoboji in northwest Iowa, our crop is up to a foot shorter, leaves are rolling and plants are just start-ing to shoot tassels — if at all yet. Soybeans here are also significantly shorter than in northwest Iowa.”

Yellow Medicine Co. (west-central) Minnesota:“Got a nice rain overnight July 21. First rain in a month. Corn is looking pretty good yet.”

Walworth Co. (north-central) South Dakota:“Just what the doctor ordered. Two inches of rain was perfect timing for crops. Thankful for the rain!”

Codington Co. (northeast) South Dakota:“Crops look very good. Receiving timely rains.”

York Co. (east-central) Nebraska:“Dryland corn is at blister stage and received 1.5 to 3 inches of rain. Time for foliar fungicide. We are set up to have a better dryland corn crop locally than 2019.”

Gage Co. (southeast) Nebraska:“It’s not very often Nebraska receives one to two inches of widespread rain in the middle of pollination. Can the state produce a record corn crop with dryness in the northeast corner? When I drove through the Norfolk area, it was dry.”

Jefferson Co. (east-central) Missouri:“The rains were right on time for the pollinating corn.”

Randolph Co. (north-central) Missouri:“Our corn is still hurt, but after 3.5 inches of rain ahead of pollination it will make something now.”

Wallace Co. (west-central) Kansas:“Shout out to corn plant breeders. There are fields here that should not be alive let alone look decent still. Drought tolerance has come a long way in the past 15 years.”

Oldham Co. (panhandle) Texas:“I’m surprised how good the corn looks after all the hail and heat we had. We were 102 to 110 degrees for over a week straight. My moisture probes show I used up most of my subsoil moisture. If we can get some rain to help finish it out, it might be a decent crop.”

Meat Stocks (Mil. lbs.)

July 25, 2020 / News page 4

Democrats, Republicans and the White House are in the final stage of the next Covid-19 relief and stimulus plan.

Timeline: End of this week... or into AugustBoth chambers are bumping up against a month-long

break. But it may take until the second week of August before a Covid-19 relief and stimulus measure clears Congress — potentially longer. “We may need to hunker down for a long August,” a contact close to the situation says.

Cost: House price tag much bigger than the Senate’sHouse Speaker Nancy Pelosi (D-Calif.) calls the Senate’s

$1 trillion mark a “beginning point.” Some GOP lawmakers are concerned about the growing size of the spending bill.Outlook: The final measure will be more than the $1

trillion Senate plan, but less than House’s $3.4 trillion.

Liability protection: GOP insists, Democrats balkSenate Majority Leader Mitch McConnell (R-Ky.) insists

the package include liability protections for businesses, medical workers and schools — a proposal Democrats fiercely oppose. Ag businesses, especially meat process-ing plants, favor the protection. Outlook: Final language will weed out those acting negli-

gently from being protected. Democrats will use it as leverage.

Jobless benefits: Democrats insist on an extensionAll sides want an agreement before the supplemental

increase in unemployment benefits runs out at the end of July. Over 20 million Americans would lose emergency unemployment benefits when they expire, including a fed-eral rental moratorium on millions of apartment units. Republicans believe the benefits make it more lucrative for workers to stay home than re-enter the labor market. Outlook: The White House wants to see the $600 per-

week payment reduced, and some Republicans prefer a one-time bonus.” Pelosi signaled a willingness to be flex-ible on the payment amount. Some type of unemploy-ment payment will be included.

Funding for Covid-19 testingDemocrats and a growing number of Republicans want

more money for testing and the Centers for Disease Control and Prevention. Senate Republicans are seeking $25 billion. The House in May approved $75 billion for testing, contact tracing and isolation for people forced into quarantine.Outlook: White House officials now support funding.

Stimulus checks: Another payment is assuredThere’s broad support for more stimulus. But who gets

checks and the size of payments is still under discussion.

Aid for schools: Trump wants it contingent on reopeningThe GOP plan includes $105 billion to help schools

reopen. Senate Democrats want a $430 billion plan for child care and schooling and money for spacing students apart, buying masks for daily use and alternating bus schedules.Outlook: Funding is coming, but the amount is unclear.

Paycheck Protection Program: More money is comingAg will more easily initially qualify for funding this time.

Ag relief: What’s in, what’s out• Senate GOP calls for $34 billion, including directing

USDA to use $14 billion in Commodity Credit Corporation funds; House Democrats have $33 billion in funding, including an optional $10 billion in CCC funds.

• House plan calls for direct payments to producers of at least $16.5 billion, but no help for 2020 crops. The Senate language may be broad enough to encompass 2020 crops.

• USDA is considering more commodities for the Coronavirus Food Assistance Program but does not think a third round of the Market Facilitation Program (MFP) is needed. It is, however, considering using a MFP-2 model to pay Covid-related losses because it’s easy to administer.

• No boost for USDA’s current CCC $30 billion borrow-ing cap. Congress likely will replenish CCC funds later.

• More funding for food aid purchases assisting dairy, poultry, meat and specialty crop sectors.

• Allow CCC to remove/dispose of surplus livestock and poultry and help processing plants maintain supply chains.

• Indemnities to producers forced to euthanize animals. • Aid for market-ready livestock and poultry losses.• Support for processed commodities like ethanol pro-

ducers and textile mills. • Dairy donation program.• Dairy Margin Coverage (DMC) premium discount for

a three-year signup. • Supplemental DMC for small dairies.• Recourse loans for commercial dairy processors.• Specialty crop block grants.• Support for local agricultural markets. • Support for farming opportunities training and outreach. • Support for farm stress programs.

Next Covid-19 relief and stimulus packageby Washington Policy Analyst Jim Wiesemeyer and Editor Brian Grete

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 remain hand-to-mouth on corn-for-feed needs until the market signals a low is in place. Barring an extended summer weather rally, upside price risk will be limited.

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

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

DAILY OCTOBER LEAN HOGS

Position Monitor

HOGS - Fundamental AnalysisHog futures held firm after testing support. The CME Lean Hog Index looks to be forging a low, yet the hog supply will be record large into late-year. This could keep cash and futures prices range-bound for an extended period. Futures' premiums to the cash market limit upside potential without strong wholesale pork and cash hog market prices. Pork stored in freezers fell 25% from a year ago at the end of June, despite a record slaughter last month. The largest decline from a year ago came in ham stocks, which fell 74%. This reflects strong demand from China and Mexico and supports stronger cash bids.

Game Plan: Fall- and winter-month contracts hold contra-sea-sonal premiums to the cash index. As a result, we are closely monitor-ing futures for hedging signals.

CME FEEDER INDEX ($/CWT.)

CME LEAN HOG INDEX ($/CWT.)

Position MonitorGame Plan:Fed cattle p r o d u c e r s should keep all risk in the cash market. We plan to increase hedges 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%

Initial resistance is at $54.975.Bulls' next target is horizontal

resistance at $57.375.

Initial support is at $49.20.Stronger support is at $48.00.

DAILY OCTOBER LIVE CATTLECATTLE - Fundamental AnalysisCash bids were steady to firm last week, and wholesale beef prices are beginning to show some underlying stability after the plunge from records in May. The futures' premium to cash bids could further delay marketings and add to ample supply. Beef featuring is starting to show up in supermarket advertisements, but retail prices have yet to fully reflect the lower wholesale costs. Traders are concerned by the rapid rise in U.S. Covid-19 cases and the impact it will have on reviving demand from restaurants and food service purveyors. Exports are sluggish and better sales are needed to sustain a rally.

$49.20

$299.50

$54.975

Consecutive closes above $107.25 may target downside gap resistance from February at $112.425 (not shown).

Initial support at the 40-day moving average (green line) aligns with the uptrend line near $101.80. Stronger support is at $99.30.

$92.50

$99.30

$107.25

$57.375

July 25, 2020ANALYSIS

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

Initial resistance is at $299.50. Downtrending resistance is near $307.30.

Support beginsat the uptrend line near$293.30. Strong support is $287.50. $287.50

$48.00$48.00

July 25, 2020 / Analysis page 2

$5.07

$4.79 1/2

$5.77 1/2

$5.54 1/2

DAILY DECEMBER SRW WHEAT

WHEAT - Fundamental AnalysisSRW - Futures started lower last week on better yield reports in Europe, Russia and Ukraine but quickly recovered on improved global tenders, including U.S. sales thanks to a weaker dollar. Warm and dry forecasts for spring wheat in Europe and the Black Sea region added support.

Position Monitor

Game Plan: Use rallies to get current with sales, especially if you are selling SRW wheat. Main-tain the hedges in December SRW futures. Look for a second low after production is better de-fined the next two months.

A close above the downtrend line near $5.48 1/2 and the July 15 high at $5.54 1/2 would target

the March 31 high at $5.77 1/2.

Initial support is the 40-day movingaverage (green line) near $5.18 1/2.Stronger support is at $5.07.

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

CORN - Fundamental AnalysisFutures slipped on better Midwest rainfall and forecasts for cooler temps and showers into early August. The market did find some underlying support on hopes the surging prices in China will lead to increased demand for U.S. corn after recent large purchases. China’s state auctions have attracted active demand with each successive sale at higher prices, indicating strong feed demand. China continues to actively buy U.S. milo. Weather remains the key price determinant, with some dry pockets in need of a drink. The recovery in ethanol production stalled last week for the first time since April. Production this season is down about 10% from last year and stocks are more than 12% lower.

The 40-day average (green line) near $3.52 1/2 is initial resistance.

Stronger resistance is at $3.59.

Support is at $3.38 3/4 and the contract low at $3.33 3/4.

DAILY MARCH CORN

$3.59

$3.38 3/4

$3.80 3/4

DAILY DECEMBER CORNPosition Monitor

Game Plan: Hedgers should maintain a 10% old-crop hedge and a 20% new-crop hedge in December futures. You should be prepared to claim hedge profits if futures retest the June lows and that support holds. Wait on the next price rally to get current with advised sales and make additional sales. Weather remains non-threatening and that should cap rallies unless Chinese purchases jump.

A close above the July 13 chart gap from $3.42 to $3.43 3/4 may target another test of $3.47. Strong resistance is at $3.69.

The April low at $3.25 1/2 stands as strong support. Weekly chart support starts at $3.22 3/4 (not marked).

$3.47

$3.25 1/2

$3.69

’19 crop ’20 crop

Cash-only: 100% 30% Hedgers (cash sales): 90% 30% Futures/Options 10% 20%

’20 crop ’21 crop

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

July 25, 2020 / Analysis page 3

DAILY SEPTEMBER HRS WHEATDAILY DECEMBER HRW WHEAT

HRW - Harvest is nearly complete and HRW basis has begun to firm. Focus now turns to USDA’s Aug. 12 world production and trade updates. Brazil recently bought Russian wheat, driving home the point that U.S. wheat is still at a premium. Global importer demand is uncertain amid Covid-19 restrictions and some financing issues.

DAILY MARCH SOYBEANS

HRS - Spring wheat fell to new lows on rains in Canada and the Northern Plains but some areas are getting too wet and more rain is in the forecast. The cash market is quiet and the Federal judge order to close the Dakota Access Pipeline may lead to rail congestion, raising shipping costs for U.S. exporters ahead of harvest.

The downtrend remains tough resistance. Strong resistance

is at $4.95.

Violation of the uptrend would point to a test of the contract low at $4.37 1/4.

$4.95

The downtrend drawn off the April high will be tough resistance.

Initial support is the line drawn off the May and June lows.

$9.09 3/4

Initial resistance is $9.09 3/4.Stronger resistance leftfrom February is at $9.25 and $9.36 (not shown).

The 40-day moving average (green line) has provided strong

support since mid-May.

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

WHEAT EXPORT BOOKINGS (MMT)

AVERAGE WHEAT BASIS (SEPTEMBER)

SOYBEANS - Fundamental AnalysisPrices firmed on increased export sales announcements to China and firming cash bids at the Gulf. Stepped-up Chinese purchases pushed total new-crop sales commitments as of July 16 to the highest since 2014. China’s import needs for fourth-quarter delivery remain high as feed demand continues to grow and Brazil has mostly exhausted exportable supplies. Rising political tensions with China and beneficial Midwest weather remain a cap on rallies. Brazil is planning to boost planted area and export prices for February delivery to China are well below U.S. offers. Shipments of old-crop soymeal are strong and ahead of the pace needed to reach USDA’s annual projection.

Initial support at $8.87 is backed by the 40-day moving average (green line) near $8.80. Stronger support is the updtrend line near $8.59.

$9.23 3/4

Position Monitor ’19 crop ’20 crop

Cash-only: 95% 20% Hedgers (cash sales): 95% 20% Futures/Options 0% 0%

Game Plan: Wait on the next price rally to get current with advised sales if you are behind. A push near the $9.20 level in November futures would be an opportunity to advance new-crop sales, and we would likely finish old-crop sales at the same time. With funds net long soybean futures, there’s risk prices may retest contract lows if weather remains non-threatening into August or China cancels recent big purchases.

DAILY NOVEMBER SOYBEANS

$8.87

$9.03 1/2

A close above resistance at $9.03 1/2 would target stronger resistance at $9.23 3/4.

July 25, 2020 / Analysis page 4

’19 crop ’20 cropCash-only: 100% 30% Hedgers (cash sales): 100% 30% 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.

U.S. Consumer Spending Spending slowed in June.

FRI 7/317:30 a.m. CT

5

USDA Export Sales ReportChina soy, corn purchases rising.

THUR 7/307:30 a.m. CT

4

FOMC Interest Rate DecisionNo change is expected by the Fed.

WED 7/291:00 p.m. CT

3

USDA Crop Progress ReportWatching rain's impact on crops.

2

USDA Export Inspections Waiting for soybean export boost.

MON 7/2710:00 a.m. CT

1

WATCH LIST

MON 7/273:00 p.m. CT

but still the second smallest position for the date since data began in 2006.

The last time funds went net short in cattle was September 2019, after a fire at a Tyson plant in Kansas; the market staged a $30 rally into the end of the year as managed money moved to a net-long position of more than 90,000 contracts.

Do not expect a rally of that magni-tude, but the market could extend gains. We plan to hedge into that strength.

Funds are net long almost 10,500 hog contracts as of mid-July, the fifth small-est since 2006. The backlog of hogs will take longer to reduce without China importing more U.S. pork. We also plan to use rallies in hogs to add fall and winter hedges.

Cattle futures have been recovering since Covid-19 shut processing plants and backlogged animals from April forward. It has taken time for the market to adjust to a more normal flow of supply from feedyards to supermarket meat cases.

Retail beef prices are finally coming down to levels that are more competitive with cheaper pork and chicken, which have been grabbing the majority of retail ad space since the pandemic. Last week, ground beef and some steak features showed up in one leading retailer's ad.

Funds have been slowly adding to long positions in live cattle since going net short in March for only the second time.

As of July 14, fund net longs were reported at 21,678 futures and options,

By Sr. Market Analyst Jeff WilsonFROM THE BULLPEN

Precious Metals: Silver prices surged last week to the highest level in 6 1/2 years as investors jumped into the white metal as a cheaper inflation hedge than gold.

Silver has been following gold higher after touching an 11-year low in March. Inflation fears are rising due to unprec-edented government and central bank spending to stave off economic reces-sions from the Covid-19 pandemic.

Last week's $4.00 surge was trig-

GENERAL OUTLOOKgered after Sprott Physical Silver Trust filed with the U.S. Securities & Exchange to issue up to $1.5 billion in new shares to buy physical metal the next two years.

Just as important, the U.S. dollar weakened against many currencies, with commodity-linked dollars in Australia and Canada leading the way.

Investors are realizing the inflation potential, and China is aggressively buy-ing U.S. commodities to build inventories.

DAILY DECEMBER COTTON

Game Plan: Make sure you are current with advised old- and new-crop sales. We are targeting additional new-crop sales above 65.00¢ in December futures.

Position Monitor AVERAGE COTTON BASIS (OCTOBER)

COTTON - Fundamental AnalysisOld-crop cotton export shipments are behind the pace needed to meet USDA's forecast, and new-crop sales have slowed. That's offset by crop concerns in Texas, though rains are aiding crops across the South. Weather and Chinese demand will set price direction through August.

COTTON EXPORT BOOKINGS (’000 BALES)

MONTHLY SILVER FUTURES

Old resistance at the June high of 61.14¢ is key near-term support.

Violation of that level would likely trigger a test of the uptrend line near 59.50¢.

A close above the July high at 64.90¢ may signal a test of old support fromearlier this year in the 66.00¢ to 69.00¢ area.

56.44¢56.44¢

61.14¢61.14¢

64.90¢64.90¢

$49.52$49.52

The push above the 100-month The push above the 100-month moving average (green line) moving average (green line)

triggered new buying.triggered new buying.