CORN
Corn futures traded mostly flat overnight atop Monday’s higher trading ranges. Dec corn is down a penny to 5.38-1/2 this morning. Weekly Crop Progress on Monday afternoon showed the corn condition held steady at 59% good to excellent – which is what the market had thought. Harvest progress of corn was slightly below expectations at 18% completed versus a 19% estimate. The five-year average is just 15%, though. Corn dented is 97% vs 93% last week, and 98% a year ago. Maturity is 74% vs 57% last week, and 73% a year ago. There are rains expected for the southern Plains soon which could slow progress. For Thursday, trade estimates for USDA Stocks report for U.S. 2021/22 corn carryout 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. Basis bids for corn and soybeans shipped by barge to the U.S. Gulf Coast were about steady on Monday, with bids underpinned by rising demand as grain terminals began ramping up loadings following disruptions from Hurricane Ida, traders said.
SOYBEANS
Soybeans are 4 cents lower this morning as the stalled rally in corn allows bean prices to ease. Nov beans, at 12.83-1/2, traded an overnight range from 12.80-3/4 to 12.87. Technically, the market remains mired in a sideways, choppy pattern as harvest progresses. USDA reported 16% of the U.S. soybeans are harvested, and crop ratings held steady at 58% good to excellent. Leaf drop is estimated at 75% vs 58% last week, and 72% a year ago. The nearby contract is staying just above 200-day Moving Average support at 12.76. The trade will be watching to see if U.S. Congress increases the debt limit, passes new spending bill and then Thursday’s USDA estimate of U.S. Sept 1 stocks. Overnight, Chinese Jan bean futures were down 80 yuan ; Soymeal up 2; Soyoil down 146; Palm oil down 106; Corn up 2. Malaysian palm oil prices overnight were up 56 ringgit (+1.27%) at 4450.
WHEAT
Winter wheat futures were firm overnight despite a surge in the dollar to a test of the Aug 20 high. Dec Chicago and KC contracts are up 3-1/2 cents to 7.25-3/4 and 7.24-1/4, respectively. Dec MPLS is up 1-1/2 cents to 9.23. Managed funds have added longs to the Dec Chicago contract on chart buying, post U.S. harvest and the fact many World buyers are short wheat needs. In addition, talk of lower Canada export supplies, lower EU milling quality export supplies and talk that after Jan 1, Russia may ration wheat exports is supportive. There are rains forecasted for the southwest U.S. Plains this week which should help winter wheat conditions. In the eastern Midwest, there is good soil moisture ahead of drier forecasts. Winter wheat planted is at 34% vs 21% last week, and 33% a year ago. Winter wheat emerged 9% vs 3% last week, and 9% a year ago.
CATTLE
Cattle futures are called steady to lower following moderate losses to start the week, as the cattle market reacted to the COF numbers from last week. Price action was relatively quiet and prices traded softer, but in the middle of Monday’s range. Overall, charts look technically weak, especially the feeder market. Prices look to be poised for a further downside move, especially if the fundamentals can’t build some support. Cattle on Feed was down 1% from last year, which was close to expectations. Numbers were slightly heavier, keeping the thought of a steady cattle supply in the near-term in the market. The Placement number was 2% over last year, and was at the high end of expectations. This weighed on feeder markets and that spilled over into the Live market. The fundamentals are lacking strength, which isn’t helping support the market. Carcass values have been on a steady decline, but were softer at the close. Choice carcasses lost .62 to 302.70 and Select lost .15 to 274.38. The load count was light at 109 loads.
HOGS
Hogs are called mixed to higher. Prices are poised to work higher, but the limit up move yesterday put the December contract at overhead resistance in the $82 area. This could hold the rally, but if prices can push through, a test of $90 in December seems likely. Feb hogs also finished the 4.750 limit higher on Monday. With the limit higher close, the Lean Hog market will have expanded limits of $7.00 per contract today. Friday’s hog report showed total hog numbers well below expectations and last year. The U.S. hog herd was down 4% from last year, approximately 3 million head less. The market as expecting lower numbers, but was 1.5 million light. In additional, the USDA made major revisions to previous report numbers, which in total could lower slaughter by 6% in the months ahead. Helping the hog market, the fundamentals are getting some footing. Cash prices seemed to have slowed their decline, but are still trading choppy. The index lost .42 to 91.47 while quickly closing the gap with the October futures to 1.220. The discount to Dec futures is still over $10, which supports the market. Retail values have gained some value, and were trading higher at midday. Pork Carcasses were 5.59 higher, and held some gains finishing the day 1.18 higher to 111.95 with a moderate load count at 301.
Author
Matthew Strelow