Provided by Stewart-Peterson Inc.
CORN
Corn futures traded 8 cents higher overnight with Sept at 6.12-1/4 and Dec at 6.11-3/4. Higher beans and wheat, as well as outside markets are offering support with the dollar down 68 points, crude up 1.70 and stock index futures up 258 points. Weekly Export Inspections will be out this morning followed by Weekly Crop Progress data after the close. As of July 10, only 15% of the U.S. corn crop had reached the silking stage vs 24% a year ago and a five year average of 25%. The USDA is forecasting the U.S. corn yield this summer at 177 BPA and is projecting ending stocks at 1.470 bil bu. This would result in a stocks-to-use ratio of 10.1% which would be the second lowest since 2013/14. If the yield were to shift 2% lower, ending stocks could fall to 1.183 bil bu and result in a stocks-to-use ratio of 8.1%, the lower since 2012/13. For now, row crops may have made a bottom for on tightening supplies and less than ideal US/EU summer weather.
SOYBEANS
Soybean futures traded higher overnight. Aug beans were up 20 cents to 14.86. Nov gained 21-1/2 cents to 13.63-3/4. August meal was up 3.10 to 431.10. August soy oil gained 1.36 to 61.44. The U.S. 2-week Midwest weather forecast is warm and dry. Weekly U.S. row crop crop ratings could increase this week in the north and east sates, but drop in the SW corn belt and Delta. The uncertainty of weather at this time of year is sparking some buying across the bean complex to start the week. USDA is currently forecast the 2022/23 U.S. yield at 51.5 BPA and ending stocks at 230 mil bu. This would be the lowest the ratio has been since the 2013/14 season. A 2% deviation to the downside in the forecast would drop ending stocks to 140 mil bu and the stocks-to-used to 3.1%, the second highest on record.
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WHEAT
Wheat futures were firm overnight with Sept Chicago up 12-1/4 cents to 7.89, KC up 8-1/2 to 8.46; And, MPLS up 8-1/4 cents to 9.15. Markets are trying to stabilize after the bottom fell out in recent weeks as bullish traders exit long positions after this year’s strong rally. EU wheat export supplies may be sold out. This allowed last week’s U.S. wheat export sales to be higher than expected. Managed funds were net sellers of 7,000 Chicago wheat on Friday and are now estimated to be net short 14,000 SRW contracts. Talk that Russia could soon except a deal to allow for Ukraine grain
exports may be in doubt after Russia bombed Ukraine capital. Russia escalated the continuing war in Ukraine east and Russia is burning Ukrainian wheat fields. World supplies of corn, wheat and sunoil remain tight if Ukraine exports do not resume.
CATTLE
Cattle futures are called mixed after posting modest gains for the week last week, but closing well off the highs. Futures continue to struggle above the 50 and 20-day moving averages. Some cash cattle trade moved $2-3 lower than in prior weeks. Beef export sales totaled 9,200 MT, which is down 35% from the four week average and a marketing year low. Exports of 17,100 MT were down 16 percent from the previous week and 13 percent from the prior 4-week average.
HOGS
Hogs are called mixed while staying range bound. August futures retested and failed to close above the 100-day moving average again last week. Strong cut out values have offered support to the nearby futures contracts while sitting at the highest levels since August of 2021. Cumulative exports for 2022 have reached 981,900 MT versus 1.217 MMT the year before and 1.285 MMT in 2020. Mexico was the largest buyer last week at 10,139 MT, followed by Japan at 3,373 and China at 1,559.
Author
Matthew Strelow