TFM Daily Market Summary 08-24-2021


Record protein exports are likely to continue well into 2022. AS U.S. census export data becomes available, the amount of beef, pork, and poultry being shipped as exports is running at record levels. Expectations for beef exports are projected to grow by 15%, to a record high 3.4 billion pounds. U.S. pork and broiler exports continue to reach new heights. Exports have exceeded the pace of production growth for beef and pork, with exports as a percent of production expected to reach new records of 12.2% for beef and 29% for pork. Meaning 12 out of every 100 pounds of beef and 29 pounds of every 100 pounds of pork produced is shipped overseas. Record levels. Broiler exports are at 17% of production, down slightly from the record of 25% in 2012-13. Expectations are for exports to continue to grow and add to those new record levels into 2022.

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CORN HIGHLIGHTS: Corn futures rallied finishing 6-1/2 higher in Sep at 5.44-1/2 and 9-3/4 higher in Dec to close the session at 545-1/4. This week’s USDA Crop Progress showed the corn crop at 60% good-to-excellent vs 62% a week ago and 64% a year ago. Illinois saw the biggest change at -7% G/E from last week. Corn dented is 41% vs 22% last week and 41% a year ago. The dough stage is 85% vs 73% last week and 86% a year ago. Maturity is at 4% vs 5% a year ago. On an interesting note, we believe the big increase in the corn dent stage could be signaling overall bushel reduction, that is, an argument for smaller yield. The technical picture continues to suggest more sideways trade which currently is the likeliest pattern. Yet, the decline in crop ratings and increase in dent corn might suggest that farmer selling now remains light. Expectations are for stronger export activity, and a day like today could signal to end users to take stronger buying action. We have made the argument that end users have been buying hand to mouth and likely do so into harvest, yet we wouldn’t be surprised if they more aggressively begin to step up to the plate for delivery.

SOYBEAN HIGHLIGHTS: Soybean futures closed with sharp gains. Nearby Sep closed 43 cents firmer at 13.37 and new crop Nov up 39 higher to close at 13.31-3/4. Today’s low price for Nov was 12.92. The U.S. soybean crop is rated 56% good-to-excellent vs 57% a week ago, and 69% a year ago. Soybean’s blooming is 97% vs 94% last week and 99% a year ago. Leaf drop is 3% complete vs 4% a year ago. India has relaxed import rules to allow shipments of 1.2 million tonnes of genetically modified (GMO) soymeal, the government said on Tuesday, a move that could help the poultry industry after animal feed prices tripled in a year. South America continues to struggle with dry weather which causes the ability to move grain through certain waterways restricted due to low water levels. Argentina is the world’s largest soybean meal exporter and concerns could begin to surface that drier crop conditions could suggest a drawdown to production. The dollar was weaker for the third consecutive session and with ideas that the recent downturn in bean prices was too much, it didn’t take long for short covering and new buying to develop today. August weather is critical for yield potential, and it looks like a hot week and only scattered rain is quickly putting back some last weather premium. Lastly, an announced sale of soybeans of over 100,000 mt was noted this morning helping provide bulls with additional information.

WHEAT HIGHLIGHTS: Sep Chi down 1-3/4 cent closing at 7.18 & Dec down 1-1/4 cent closing 7.32-1/4. Sep KC wheat flat at 7.04-1/4 & Dec down 1/4 cent closing at 7.17-1/4. Today was a pretty lackluster day in the wheat market, although it’s a little discouraging to see corn and soybeans up and leave wheat behind. Paris milling futures were down today which borrowed early pressure first thing. Russia is reporting yields down 12% from last year which could easily mean they only produce 72-73 mmt this year. With that said, Russia’s cash prices continue to move higher, with most analysts not looking for that trend to slow down anytime soon. Argentina wheat is also of concern between La Nina weather pattern and a threat of frost this week, current analysts have projected this could cut their wheat production by 20-30% depending on how severe everything materializes.

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Bryan Doherty

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