CORN
Corn futures are down 4 cents this morning to 5.46-3/4 within a 7 cent range between 5.551-1/2 and 5.44-1/2. Nearby September corn is down 1-1/2 cents to 5.51-1/2 ahead of option expiration scheduled for today. Tightening old crop supplies and lack of deliveries is helping the contract stay supported near above 5.50 ahead of First Notice Day (FND) next Tuesday. The next USDA report is Friday, Sept 10. For the week, Sept corn is up 13 cents and Dec is up 9. For now, an active radar featuring widespread rains over the northern Corn Belt is limiting buying interest in the corn market as we near the end of the month. More scattered showers are expected to move through the Midwest over the next week that will benefit final stages of filling corn. Spot basis bids for corn and soybeans shipped by barge to the U.S. Gulf for export rose on Thursday on dwindling supplies of old-crop grain, coupled with fears that a tropical storm expected to reach the Gulf Coast early next week could slow the harvest, traders said. Outside markets have the dollar choppy and crude making a new two-week high on gains of 1.00/ bbl this morning.
SOYBEANS
Soybean futures were down a 9 cents in the November contract to 13.17-1/4 overnight. Rains in the upper Midwest could add bushels to the 2021 bean crop and offset the potential for lower yields in the Central Midwest where rain has been below normal and temperatures above normal. This could push USDA’s 50 bushel per acre (BPA) 1 bpa higher and suggest an increase in carry out by roughly 20 to 30 mil bu from 160 mil. Planalytics raised their outlook to 50.20 BPA. Meanwhile, market participants are exhibiting caution ahead of this afternoon’s Fed comments. The theme seems to be surrounding whether, or not they will delay tapering, which could be bullish commodities, or whether they will start setting a date. Most analysts thought they would set a date in September and maybe later in the 2021 season. Overnight, Chinese Jan bean futures were down 2 yuan ; Soymeal down 5; Soyoil down 70; Palm oil down 80; Malaysian palm oil prices overnight were down 60 ringgit (-1.37%) at 4332 after two days of gains amid lower soybean oil prices and expectations that inventories in Malaysia are poised to climb.
WHEAT
Winter wheat futures were unchanged overnight after working higher on talk of lower world wheat crops. Dec Chicago wheat, at 7.39-1/4 got to a one-week high of 7.45 overnight and is currently up 11 cents for the week. Dec KC is at 7.28, down 7-1/2 cents from last night’s high of 7.35-1/2, and up 20 cents for the week. Dec MPLS is fractionally lower to 9.10-3/4 and up 8 cents on the week. Protein premiums for HRW wheat delivered by rail to or through Kansas City rose by 5 cents a bushel for ordinary protein wheat, according to CME Group data. Premiums were unchanged for all other grades of wheat. The International Grains Council lowered the World wheat crop 6 mmt to 782 from a previous outlook of 788 mil. Russia was lowered from 81 mmt to 75, Canada was lowered from 28.5 to 24.6 and US from 47..5 to 46.2. The increase Ukraine from 29.5 to 32 and Australia from 28.9 to 30.1 was not enough to offset the declines.
CATTLE
Cattle futures are called steady to lower as October cattle challenge support levels that the market broke through to being the week. The price action in the cattle market has been weak the past couple sessions. After three consecutive weaker closes, the close as we go into the end of the week will be key to next week. If prices were to trend softer, the technical picture will turn more bearish in the short-term. August is under the influence of the cash market, as some light trade has been developing with $123 in the south, and $125 in the north. Both of these were slightly higher than last week, but not enough to motivate the market. Retail values have showed some signs of softness, as retailers may be through the Labor Day buying window. Carcass values did bounce back slightly at the close with Choice gaining .38 to 347.27 and Select gained 3.90 to 319.59. Load count was light at 77 loads. Weekly export sales were not impressive at 10,400 MT, down 6% from last week and 33% below the 4-week average. Japan, South Korea, and China were the top buyers of U.S. beef last week.
HOGS
Hogs are called mixed. Hogs futures saw additional choppy trade on Thursday as prices traded on both sides of the range before settling lower. Technically, the hog market is working in a sideways pattern, with October holding the $88 window. The market may need some fundamental news to break out of this pattern in the near-term. Some early strength came into the market as the USDA attache to China forecast hog production in 2022 down 14%, next year. In addition, the attache sees 2022 pork imports rising to 5.1MMT. This is a friendlier long-term view, as U.S. pork export demand will likely stay strong. Weekly export sales for pork were improved at 24,100 MT, up 21% from last week, but still down from the 4-week average. Mexico and Japan were the top buyers of U.S. pork last week. China added 1,300 in new sales last week. Shipments were at 29,900 MT, up 4% from last week. Midday pork carcasses were much higher, gaining 9.05 , and held most of those gains into the close, finishing 6.16 higher to 116.40 on moderate demand of 251 loads. This should support prices on the open today. The hog cash market has been trending steady to lower. National Direct hogs closed 2.24 lower to $93.86 with a range of $91-101. The lean hog index is still holding a strong premium to the futures market traded 1.56 lower to 106.34 trying to narrow the gap.
Author
Matthew Strelow