TFM Daily Market Summary 9-9-21


The most recent data from the USDA and US Meat Export Federation have shown the strong pork export sales have been maintained into July 2021.  Export totals for July pork and products stays strong as the value of those products were up 20% to $657.3 million compared to last year.  Total pounds of pork products was relatively steady at 221,809 MT, but the higher price for pork product in 2021 helped lift the value.  For January through July, pork exports were 1% above last year’s record pace at just under 1.8 million MT, while value increased 8% to $4.98 billion.  China has stayed active in the export market, locking in strength in the pork variety meat, but pork muscle cuts have tailed off recently.  Mexico has stayed as an aggressive buyer of U.S. pork products, as the July exports were up 22% from last year.  The activity by Mexico in volume of pork is challenging record levels.  In 2017, the record year for export volume to Mexico, January-July exports are 1% higher in Volume and 10% in value.  The pork export market has stayed strong, and will be the key in U.S. pork prices into the end of the year.


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CORN HIGHLIGHTS: Corn futures ending quietly, but once again, lower. September lost 2-1/4 cents to end the session at 4.96 and December lost 0-1/4 cent to close at 5.10, after posting a low of 5.04-1/4, testing the 200-day moving average. A lack of positive news and sharp losses in wheat spilled into the corn market. Tomorrow, the USDA will release the Supply and Demand report for September. The average yield is expected to be 175.5 bushels an acre, a slight improvement from the Aug estimate of 174.6. Attention will focus on planted acres. Tomorrow’s report could show an increase in supply, beginning stocks and planted area. A social media post revealed FSA was scheduled to release its 2nd batch of certified acreage data Friday after USDA’s September crop reports, but the data appeared on the FSA site yesterday. As of Sep 1, FSA reported corn planted/failed acres at 91.2 million acres, up from 90.3 million acres reported in Aug. Basis bids for corn shipped by barge to the U.S. Gulf Coast did improve, though on Wednesday. Long liquidation can still drive prices lower, despite prices dipping into oversold territory. On the one hand, we were encouraged today that the 200-day moving average held, yet after trading higher, prices again failed into the close. Expectations for increased harvest pressure and continued fallout from hurricane Ida are still headline news.

SOYBEAN HIGHLIGHTS: Soybean futures closed with another round of losses, as continued shipping concerns and expectations that tomorrow’s USDA report will show an increase in acres and yield. September futures led today’s drop, closing 12 cents lower at 12.58 and November down 9 at 12.70-1/2, its lowest close since June 25. An announced sale of 132,000 mt to China failed to provide support. While China has been buying as of late, the amounts are not overwhelmingly large. In other words, more confirmation that at the moment, their purchasing practice is more hand-to-mouth. From a big picture perspective, if in fact China is importing more beans in the year ahead, unless the USDA comes out with some significantly bearish numbers tomorrow, a confirmation of tight US supplies will again be reiterated. It is just a matter of time before significant purchases begin to stack up. High prices do tend to cure high prices, yet it doesn’t happen overnight. Increased supplies and lower prices may ultimately occur, yet increased supplies only come after a longer period when increased production occurs, demand diminishes, or both. While demand may be minimal at high price levels, a recent drop of more than 1.00 and soybeans may be considered a bargain.

 WHEAT HIGHLIGHTS:  Next Tuesday will be last trading date for both Chicago & KC September futures.  With that said, both contracts are trading on thin volume this week, with September Chicago down 16 3/4 cents, closing at 6.81 1/2 and December down 17 1/4 cents, closing at 6.92 1/4.  KC September lost 20 1/2 cents, closing at 6.76 1/2, with a volume of only 19 contracts today, and December contracts lost 22 cents, closing at 6.82 3/4.  Minneapolis wheat paved the way for the wheat market today, down 30 cents at one point, breaking the 50-day moving average for the first time since May. The other two markets gradually slipped lower throughout the trade today.  Concerning to see all three markets give up key moving day averages, if a technical trader today is a day you decided to jump in and sell. Today’s move is still greatly attributed to the market’s reaction to yesterday’s higher-than-expected July 31 all wheat stocks in Canada from Stats Canada.  Paris milling futures were also down today.  Also, the market is trying to digest the numbers from the FSA ahead of tomorrow’s USDA report.  FSA numbers suggest wheat acres could be 500,000 acres higher than trade expectation for tomorrow’s report.   Australian wheat production is being pegged at near record large at 32.6 mmt, which is still below USDA’s last estimate last month of 30 mmt.  From a demand side of things, the situation is still bullish in that regards on a global scale.  We’ll see if US wheat is gaining any traction with global wheat prices increasing, potentially making US wheat more competitive  in tomorrow’s export report (delayed due to 3-day holiday weekend).

Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency. A customer may have relationships with all three companies. TFM Market Updates is a service of Stewart-Peterson Inc. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.


Amberlee Bratcher

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