We will likely see further reductions in inflation with traders now seeing a 100 percent chance of a Federal rate cut by September, with 93.5 percent odds for a 0.25 percent reduction, following June Consumer Price Index (CPI) data showing a 0.1 percent drop, bringing inflation to 3 percent, the lowest in 3 years.
3. AAFC Outlook for Principal Field Crops is scheduled to be released on July 22. This report is most likely going to be unchanged vs. the last report with production of all crops at 94.4 mmt as we have had favorable growing conditions until now. But a heat wave that is expected over the next 7-14 days accompanied by very little moisture. It will start to stress crops and could impact production and yields as later planted canola has started to flower.
4. The USDA Cold Storage Report comes out Thursday July 25th. USDA reported red meat stocks at the end of May were 5 percent lower than last year at 929.67 million pounds, reflecting strong demand. Beef in cold storage was slightly below a year ago at 423.684 million pounds, while pork dropped 9 percent to 481.887 million pounds. Expect stocks to be lower than last year, but still slightly higher than last month due to lackluster U.S. demand for pork this summer.
5. For Canadian readers, there is one more important report. The Bank of Canada (BOC) is expected to cut interest rates again on July 24th for the 2nd consecutive time with a 93 percent probability after June inflation figures were lower than expected at 2.7 percent down 0.1 percent vs. expectations for a 0.1 percent increase to 2.8 percent. The Canadian economy remains under a fair amount of pressure due to elevated interest rates, and many are projecting 2 more cuts by the end of the year to alleviate some of the consumer stress being felt on mortgage renewals, unsecured lending and on the consumer spending.
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