CORN

Corn futures rose more than 6 cents overnight to a fresh 3-week high.  The USDA WASDE report pushed corn yield above expectations to 181.8, but with adjustments to demand, (75 mil bu increase for exports) kept carryout close to expectations at 2.756 billion bushels, up from 2.648 last month.  The corn market is rallying off in-line numbers and the prospects of the crop getting smaller due to damage this week in IA.  Analysts expect that the storm was much more detrimental to corn than soybeans.  The improved technical picture with Dec back above 3.30 opens the door to additional short covering.  The contract got to 3.33-1/2 overnight.  Managed Money is net short an estimated 157,000 corn contracts.  Trade estimates for this morning’s USDA combined Weekly Export Sales are 400,000 to 1.40 mil tons versus 2.60 mil last week.  Currently South Korea seeks 69,000 tons of option-origin corn.  Taiwan passed on a 65,000 ton option-origin tender.  Weather-wise, one of the more notable increases of rainfall in last night’s GFS model run was across much of the norther Corn Belt and all of Iowa Aug 22 through 24.  Temps are seen running average to a bit below average over the next 10 days.

SOYBEANS

Soybean futures jumped another 7 to 8 cents overnight after a bullish reversal higher close to the end the day yesterday.  Despite the USDA WASDE report projecting yield and carryout above market expectations, beans prices rallied, in part, on adjustments by the USDA in the demand side, boosting exports and domestic crush.  Plus, the global soybean carryout was 2.8 MMT under expectations at 95.4 MMT.  The USDA also raised potential Chinese crush moving it higher to 98 MMT.   Favorable demand news preceded the report with a fifth consecutive day of soybean export sales to China and Unknown destinations announced bringing the sales totals for the week to 44 mil bu.  The new projected yield was 53.3 bu per acre and carryout moved to 610 mb for the 2020/21 market year.  This morning’s weekly U.S. old crop export sales are estimated near 100,000 to 550,000 tons versus 435,000 last week, new crop is estimated near 1.10 to 1.80 mil tons 1.405 mil last week.  on Wednesday.

WHEAT

Wheat futures were firm overnight on spillover support from row crops and and downturn in the dollar.  All three exchanges posted gains of at least 4 cents while creating base of support.  The overall weak technical picture keeps the market poised for additional long liquidation, though.  The USDA moved global wheat carryout to 316.8 mmt, 3.3 MMT above expectations, thus weighing on the market.  U.S. wheat prices are struggling versus global wheat prices, which are trending lower on the strength of Russian and Australian wheat crops.  Weekly U.S. Wheat export sales are estimated near 250,000 to 800,000 tons versus 605,000 last week.  In tender activity, Egypt is in the market for option-origin wheat, and Jordan passed on a 120,000 option-origin tender.

CATTLE

Live cattle futures are called steady to higher.  Cash strength and improved midday retail values is positive for the cattle market, so we might see lingering support today.  Cash trended upward to $105 in some regions, $3-5 over last week.  Wednesday was active with large sales volumes across most regions except Nebraska where cattle owner held to higher asking prices.  Despite deliveries against the August contract, prices are holding firm.  Technically, the October contract followed through on Tuesday’s gains but struggled with resistance at $110.

HOGS

Lean hog futures are called mixed.  Hog futures have moved into consolidation mode off the most recent rally.  A firming cash index and strength in the midday retail value provide support in the market. The supply side of the hog market stays heavy, but weekly export sales could stay supportive.

Author

Matthew Strelow