CORN

Corn futures were up 4 cents overnight supported by talk that USDA could drop the World corn crop at 11 AM Central today, increase U.S. corn exports fueled by an increase in Chinese corn imports and lower US/World corn end stocks.  Dec 2020 through Sept 21 contracts are all trading at, or above $4.00 per bushel.  Dec 2021, peaked at 3.98-1/2 overnight while targeting the contract high at 4.01-1/2 from 10/21.  News of positive results in testing a new COVID virus vaccine has also raised hope of more normal food and fuel demand in 2021.  Trade estimates for today’s USDA November crop report are for the U.S. 2020 corn crop to come in near 14.659 bil bu versus USDA 14.722.  Trade estimates for U.S. 2020/21 corn carryout are near 2.033 bil bu versus USDA 2.167.  Heading into the report, Managed Money is net long an estimated 307,000 corn contracts.

The U.S. corn harvest was 91% complete as of Sunday, the USDA said in a weekly crop progress report on Monday, ahead of the five-year average of 80% and matching the average estimate in a Reuters analyst poll.

SOYBEANS

Soybean futures continued to stay strong overnight with Nov posting an ‘inside’ session with gains of 3-1/2 cents to 11.08-1/2.  Jan beans eclipsed Monday’s high of 11.18 by one cent on gains of 8 cents. Trade estimates today’s Nov Supply/Demand report have the U.S. 2020 soybean crop near 4.251 bil bu, versus USDA 4.268 bil bu.  Trade estimates for U.S. 2020/21 soybean carryout are near 235 mil bu versus USDA 290. This would be a five-year low.  Managed Money is net long  Corn; net long an estimated 245,000 soybeans; 91,000 lots of soymeal, and; 100,000 soyoil.

The U.S. soybean crop was 92% harvested, the USDA said, ahead of the five-year average of 90% but behind the average analyst expectation of 94%.

WHEAT

Wheat futures were mostly steady overnight with an upturn in the dollar lending resistance.  Dec CBOT wheat is hovering around the $6 price level ahead of today’s USDA report.  Globally, there continues to be signs that over the next 2 weeks, rainfall in Russia, South Brazil and east Argentina will be less than normal.  Many feel that USDA should drop the World/Russia wheat crop, and the trade will be watching to see if Russia announces wheat export quotas as they crop is stressed due to dry weather. Trade will also watch to see if USDA reduces EU wheat exports due to higher domestic feeding.  U.S. south plains 2 week forecast calls for normal to above temps and below normal rains.

The USDA rated 45% of the U.S. winter wheat crop in good to excellent condition, up from 43% a week earlier and just above the average estimate of 44%.  By state, wheat ratings improved sharply in OK, with 52% of the crop rated in good to excellent condition, up from 34% a week earlier. In KS, the biggest winter wheat producer, 31% of the crop was rated good to excellent, up from 28% a week earlier.  Farmers have nearly finished planting the winter wheat crop that will be harvested in mid-2021. Planting was 93% complete by Sunday, the government said, ahead of the five-year average of 91%, and 79% had emerged from the ground.

CATTLE

Cattle futures calls are steady to higher as strength in the equity markets lending support.  Futures have also pushed higher on hope for stronger cash and retail trade.  Feedlots are asking $112/cwt.  Choice carcasses gained $3.07 on Monday to 217.39.  Select gained 3.88 to 202.37, adding to cash optimism.  Technically, Monday’s rally left gaps on the charts that may fuel further buying support today. 

HOGS

Lean hog calls are mixed to lower.  Despite finishing higher, hog futures traded within Friday’s range and Friday’s poor technical close, and the CME Lean Hog Index lost another .40 to 71.12.  Retail values did close 1.69 higher to 85.69, softer from midday. The CME Pork carcass cutout index (IJ.X) was down .17 to 83.82, trending lower since 10/22.   Slaughter was estimated at 493,000, nearly 50,000 over last year, so the heavy slaughter runs provide excess production, pressuring prices. 

Author

Matthew Strelow