CORN
Corn futures traded were flat overnight as prices settle into a consolidation phase near the mid point of contract the contract highs from May 7 and a series of intra-day lows on the daily charts. Dec corn is up a penny to 5.57-1/4 between 50-day moving average resistance at 5.81 and 100-day MA support at 5.50. For the week, the contract is up 28 cents while trading inside Wednesday’s trading range for the 2nd consecutive day. Concerns of weather in South America continue as Argentina and Brazil remain dry. The Parana River in Argentina is also thought to be at its lowest levels in around 80 years. There are concerns that if this continues South America will be unable to meet USDA estimates for exports. Weather-related problems with Brazil’s second corn crop have sparked a spate of companies exiting their contracts on washout clauses, causing what some traders described as potentially the biggest wave of export cancellations for the world’s No. 2 supplier in five years. The outlook for this year’s U.S. crop yield is up from previous forecast of 175.00 bu/acre, and has risen for a third consecutive time, according to data issued by Planalytics on Thursday. Yield in key “I” states versus previous Planalytics forecast (in bu/acre): Iowa 193.90 vs 193.40, Illinois 196.80 vs 196.20, Indiana 185.00 vs 183.70.
SOYBEANS
Soybean futures, as well as meal and soyoil traded higher overnight. Malaysian palm oil prices overnight were up 55 ringgit (+1.32%) at 4228. Malaysia’s palm oil exports have risen 5.45% month-over-month during July 1-15, according to Intertek Testing Services. Aug beans are up 12 cents to 14.59-1/2 to cap off an 80 cent move to the upside for the week and get back to the contract’s 50-day moving average resistance area. Nov gained 11 cents to 13.91 to a fresh 2-week high, also back above its 50-day MA. Technically, this week’s rally closed a gap left on the daily chart from a post-Fourth of July Holiday price drop. NOPA crush on Thursday showed June crush being smallest monthly crush in two years at 152.410 mil bushels. The average estimate of analysts in a Bloomberg survey was 159.45 mil bu. Soybean-oil inventories at the end of last month were 1.537bil lbs, compared with 1.78 bil a year earlier; average estimate by analysts was 1.637 bil. In May, the crush was 163.52 mil bu with soybean-oil reserves at 1.671 bil lbs. The outlook for this year’s U.S. bean crop yield is unchanged from previous forecast of 50.10 bu/acre, according to data issued by Planalytics on Thursday. Yield in key “I” states versus previous Planalytics forecast (in bu/acre): Iowa 56.60 vs 56.00, Illinois 59.40 vs 59.20, Indiana 56.80 vs 56.40.
WHEAT
Wheat futures continued to soar overnight led by new contract highs in MPLS Spring wheat contracts amid harsh weather conditions. Sept MPLS gapped higher en route to advancing 18 cents to a new peak of 9.12, rounding out a nearly $1.00 move on the week. Elsewhere, rains are currently disrupting the EU wheat harvest and may give the U.S. a decent window to ship more wheat through exports. Sept Chicago futures are up a dime to 6.82 and up 67 cents for the week. Sept KC reached 9.50 on gains of 9-3/4 cents while adding 56 cents for the week. Price-wise, momentum studies are trending higher, supporting more buying interest from bullish traders. The outlook for this year’s U.S. spring wheat crop yield is down from previous forecast of 45.20 bu/acre, and has fallen for a third consecutive time, according to data issued by Planalytics on Thursday. Yield in key states versus previous Planalytics forecast (in bu/acre): North Dakota 36.20 vs 44.10, Minnesota 50.00 vs 60.00, Montana 27.70 vs 32.90.
CATTLE
Cattle futures are called mixed to lower. Buying strength stays supportive in the deferred contracts as the prospects of tighter cattle numbers and improved competition in the cash market have supported prices into 2022. Front months, though, may stay pressured by lackluster cash performance this week, trading steady to slightly lower than last week. There should be more clean up trade to end the week, but the quiet tone has limited futures’ upside momentum. Boxed beef values were trading mixed at midday, but closed lower. The pressure remains in the Choice market with carcasses dropping 3.01 to 269.87, and Select losing 1.27 to 252.48 The load count was light at 142 loads. Weekly export sales failed to move markets with disappointing numbers on this weeks report. Taking into account the July 4th holiday, total new sales of beef were at 9,300 MT reported for 2021 were down 61% from the previous week and 44% from the prior 4-week average. Top purchasers for the week were Japan, Mexico, and China. The technical picture in both live and feeder charts are cautious after Wednesday’s price action. The tone going into the weekend may be key setting the mood for next week.
HOGS
Hog calls are mixed. Futures are coming off a mostly higher trade on Thursday, with the exception of .80 losses in the nearby August contract. July hogs hit expiration yesterday, closing trade down .25 to 112.125. This likely weighed on the performance in the August futures. Weekly export sales were the focus of the morning, and numbers were disappointing at 10,600 MT reported for 2021, down 76% from the previous week and 68% from the prior 4-week average. Top buyers of U.S. pork last week were Mexico, Japan, and Honduras. The impact of the July 4th holiday may have limited sales totals, and the weaker number limited gains on Thursday. The lean hog index was firmer on Thursday, gaining .33 to 111.000. The index has the chance of breaking the recent down trend and close higher on the week for the first time after three consecutive weeks lower. Pork carcass cutout values have slowly worked higher this week, which has help support the market. At the close, the market worked firmer. gaining .83 to 119.52. The firmer afternoon close could help support prices on the open. Technically, hog futures are trying to turn the corner higher, following through as some fundamentals are starting to firm, but it may come down to the demand to push this market higher.
Author
Matthew Strelow