CORN
Corn futures were quiet overnight, trading only 2-1/4 cent trading ranges. Dec is down 1-3/4 cents this morning to 5.25. Prices are stuck in a consolidation pattern until more is known about this year’s harvested crop. Dec corn experienced an inside trading week last week with the previous week’s high of 5.37-1/2 noted as short-term resistance. U.S. yields have been generally good with weather conducive to a generally fast season. South America’s planting weather is closely being monitored. Cptec forecasts a 70% chance of rains in several Brazilian regions this week. Weather issues for two consecutive years now have been concerning agents, since second crops may be damaged again, majorly corn crops. Weekly Export inspections and harvest progress data will be out today. Any break out action on the charts may be remain holstered until Thursday’s Quarterly Grain Stocks report. Key USDA reports would end if Congress does not raise the debt ceiling Oct 1. This includes crop progress, export inspections and export sales and the Oct crop report. USDA will issue next weeks Sep 1 stocks report before the possible shutdown. U.S. corn stocks are seen at 1.15 bil bu as of Sept. 1, a decline of 766 mil from last year’s level at this time, according to the average estimate of as many as 23 analysts surveyed by Bloomberg.
SOYBEANS
Soybeans are mixed this morning with Nov up a penny to 12.86. Meal contracts are firm, and soyoil weaker, though regarded as the strongest market in the bean complex. Soybeans are still coiling above 200-day moving average resistance at 12.74-1/2 and look to stay above the June low of 12.40-1/2. Chinese Jan bean futures were down 46 yuan; Soymeal down 11; Soyoil up 24; Palm oil up 16; Corn down 7. Malaysian palm oil prices overnight were down 46 ringgit (-1.04%) at 4395. China curbed electricity to a few soybean crush plants due to fact their emissions where over targets. China also announced they will place control measures on hog breeding herd at 41 million 2021-2025. There is talk that EPA may announce cuts in 2020, 2021, 2022 biofuel blending obligations soon. This offset industry talk that increase soyoil use for biofuel could increase the need for more U.S. soybean acres. Soybean stocks are seen at 174 mil bu in Thursday’s USDA report, down 351 mil from Sept. 2020.
WHEAT
Winter wheat futures were unchanged overnight, Spring wheat up 4. Dec Chicago wheat gained 15 cents last week to hold above 50-day Moving Average support. Dry conditions in Canada’s wheat growing areas suggest prices have enough price support to battle the negative influence of a rising dollar. IGC lowered World wheat crop 1 mmt. Lowered Canada and EU, but raised Australia and Ukraine, and dry weather is delaying some plantings of the next Kansas wheat crop as some farmers wait for rain. For Thursday’s USDA report, U.S. 2020 wheat stocks are seen at 1.86b bu, 303 mil bu below last year. 2021 Wheat production seen down 15 mil bu from the USDA’s August estimate to 1.68 bil bu. The biggest decline is seen in spring wheat, down 12 mil bu to 331 mil bu. This will keep prices choppy.
CATTLE
Cattle futures are called steady to lower. The soft retail market will add selling pressure to the open. Technically, even with the strength, cattle futures are building a consolidation range, and forming a wedge pattern with a series of higher lows, and lower highs. With Friday’s Cattle on Feed report being slightly heavy, we are cautious of a technical move lower to start the week. The report came in a little heavy compared to expectations. Total Cattle on Feed on September 1 was 99% of last year at 11.234 million head, the market was expecting 98.1%, but the total was within expected ranges. Placements in August were 102% of last very versus an expectation of 99.5%, and at the top of the range. In August 2.104 million head of cattle were placed in feedlots. Marketings were at 100% of last year with expectations at 99.8%, so generally in line. The total cattle in feedlots were slightly higher than expected and the higher placement number may weigh on prices on the open today. Prices will need to hold a possible test of recent support levels. The country cash trade remained very quiet to end the week, with most of the business essentially done for the week. For the week, most trade has been at $123-124 cans and $198 dressed, mostly steady to slightly lower than last week, as cash trade stays lackluster. Retail carcass values trended lower on week, and closed lower as well on Friday, Choice carcasses lost 2.28 to 303.32 and Select was .46 lower to 274.53. Load count was light at 104 loads.
HOGS
Hogs are called mixed to higher. Futures saw choppy two-sided trade to end the weak, as the market was anticipating the USDA Quarterly Hogs and Pigs report to be released after the market close. The report showed a tighter hog supply than estimated. United States inventory of all hogs and pigs on September 1, 2021 was 75.4 million head. This was down 4 percent from September 1, 2020, but up 1 percent from June 1, 2021. Breeding inventory, at 6.19 million head, was down 2 percent from last year, and down slightly from the previous quarter. Market hog inventory, at 69.2 million head, was down 4 percent from last year, but up 1 percent from last quarter. The June-August 2021 pig crop was also below expectations, at 33.9 million head, was down 6 percent from 2020. Sows farrowing during this period totaled 3.05 million head, down 7 percent from 2020. Direct cash trade has been trending lower, but Friday Direct cash trade found some support with closing Carcass base prices up .40 to $76.93, Live prices were settle at $58.43, but had no comparisons due to confidentiality. The weak price tone during the week stayed reflected in the Lean Hog Index, which traded .76 lower to 91.89. The discount of futures to the index continues to narrow but is still a 4.615 premium of index to futures, which supported the hog market.
Author
Matthew Strelow