TFM Midday Update 10-1-21

CORN

Dec up 2 @ 5.40
September 1 quarterly stocks at 1.236 bb vs pre-report estimate of 1.167 bb and 1.919 bb at this time last year
Though higher than estimates, Sep 1 corn stocks are the lowest in 7 years
USDA reported 395 mb of corn was held on farms, down 41% from this time last year
Corn production for 2020 was lowered – yield was revised to 171.4 bpa vs 172 and harvested acres were reduced by 200,000
Rain expected in South Dakota, Minnesota, and the Southern Plains over the next few days

Nov down 11 @ 12.45
September 1 quarterly stocks at 256 mb vs pre-report estimate of 172 mb and 525 mb at this time last year
USDA also revised last year’s crop higher, with a yield of 51 bpa (up 0.8) and an increase of 100,000 harvested acres (production increased by 81 mb)
China is not expected to make any purchases between Oct 1-7 due to their Golden Week holiday
US soybeans are currently the cheapest offer in the world

Dec wheat up 22 @ 7.47, Dec KC up 19 @ 7.51, Dec MNPLS up 18 @ 9.31
September 1 quarterly stocks at 1.780 bb vs pre-report estimate of 1.857 bb and 2.158 bb at this time last year
Small Grains Summary all wheat production at 1.646 bb vs pre-report estimate of 1.681 bb and 1.826 at this time last year
US wheat production is the lowest in 19 years
First quarter wheat demand at 896 mb (an 8 year high)
All wheat yield at 50.2 bpa vs 50.9 last year (spring wheat dropped to 32.6 bpa vs 48.6 last year)

Oct LC up 0.325 @ 120.900 & Oct FC up 1.150 @ 153.70
Packers need cattle – cash has traded steady across the country (despite recent weakness in boxed beef and futures)
From a technical perspective the market is oversold
Choice cuts down 2.35 and select down 2.46
Cattle slaughter projected at 116K
CME Feeder Cattle Index for 9/30: down 0.88 @ 153.78

Oct hogs up 0.850 @ 92.450 & Oct pork cutout up 0.600 @ 111.000
There is a large gap on the charts below current levels (Dec and Feb contracts now have an additional gap below)
African swine fever was found in one of Germany’s biggest pork finishing farms
China was a large buyer of pork on Thursday’s export sales report
National Direct Afternoon report declined 0.73
Hog slaughter projected at 473K
CME Lean Hog Index for 10/1: down 0.02 @ 92.90

Brandon Doherty