CORN
Corn futures were mixed overnight, trading a 5 cent range inside Monday’s December contract trading range. The contract is unchanged this morning at 5.68-3/4. The Dec 2022 contract is down 1-1/2 cents to 5.16. This week, the market will be watching the Pro Farmer Crop Tour as it begins today and runs through Thursday. Daily yield totals will give the market a picture of the variation that is likely out there from west to east. A lack of rain in southeastern South Dakota was hitting yield potential for corn and soybeans, according to scouts Monday on the first day of the four-day tour. Corn yield potential averaged 140.1 bu/acre after 10 stops in Minnehaha, McCook, Hanson, Davison, Aurora and Douglas counties, with a low of 102.4 bu in McCook and high of 167.4 in Aurora. That’s below the crop tour average last year of 179.2 bu and the three-year average of 170.4. Overall, corn yields in South Dakota averaged 151.5 bu/acre, according to 88 samples taken Monday by participants. That compares with 2020 South Dakota tour average of 179.2 bu/acre; three-year avg of 170.4. Corn yields in Northern Ohio are “decent,” Mike Berdo, a scout on the Midwest crop tour’s eastern leg and a farmer from Washington, Iowa, says in interview Monday. Corn yields were averaging ~174.7 bu/acre after nine stops through midday, Berdo says. Last year, overall tour yield average for Ohio was 167.69 bu; three-year average is 167.20 bu, tour data shows. On another route in Northern Ohio, corn yields were averaging ~176.1 bu/acre after eight stops, says Brian Grete, editor of the Pro Farmer newsletter and leader of the eastern half of the Midwest crop tour. Yesterday’s Weekly USDA Crop Ratings showed the corn crop 62% Good-to-Excellent, a 2 point drop in the ‘Good’ category from the previous week for the U.S. crop.
SOYBEANS
Soybean futures are firm this morning and took out last week’s highs overnight. Nov beans are up a nickel to 13.73-1/4 after eclipsing Monday’s high of 13.78 with an overnight high of 13.79-3/4. The Nov 2022 bean contract is up 5 to 13.73-1/4. Yesterday’s Weekly USDA Crop Ratings showed the bean crop 57% Good-to-Excellent, a 3 point drop in the ‘Good’ category from the previous week. Day one of the Pro Farmer Midwest Crop Tour that began out west in SD showed soybean pod counts averaged 1,131.4 pods in a 3-by-3-food square, with a low of 420 pods in Davison and a high of 1,654 pods in Minnehaha. The average is below 1,250.9 pods on the tour last year but above the three-year average of 1,036.1 pods. NOTE: The crop tour doesn’t estimate soybean yields. The pod count in 3-by-3-foot squares averaged 996.9 pods, according to 88 samples. While the pod counts were closer to normal for this part of the country, soils in most fields were dry several inches down into the dirt and rains were needed to boost prospects. “The pod count in the beans in eastern South Dakota was better than expected but, as we went west, it got drier,” says Tim Gregerson, a Nebraska farmer and crop scout. On the eastern leg in Ohio, late plantings contributed to a low pod count averaging 923.3 pods in a 3-by-3 foot square area after seven stops. The three-year average for Ohio is 1055.97 pods. Last year, Ohio averaged 1155.68 pods.
WHEAT
Wheat futures were down overnight after having become technically overextended to the upside recently. Dec Chicago contract is down a dime to 7.65. Dec KC is down 8 to 7.41-1/4. Dec MPLS Sprig wheat futures are off 3 cents to 9.24. All three contracts saw prices stall in Monday’s action after rallying sharply to a strong finish last week. A lack of follow-through to the upside may create short-term concern regarding the sustainability of the move. However, with the falling world numbers and U.S. ending stocks estimated to be at their lowest since 2013-14, additional strength cannot be ruled out.
CATTLE
Cattle futures are called firmer for today. Live cattle futures finished mixed on Monday with buying strength in the front months, as prices challenge the top of the range. October closed at its highest level since mid-July. If prices were to break through, additional money flow and short covering is likely; If prices fail in this area again, prices could easily pull back and retest the bottom of the range. We view a correction setup in the feeder market where futures stayed softer on Monday, as price saw moderate losses and charts break technically. The strength in the retail carcasses is the supportive news under the cattle market. With slaughter holding at 120,000 and under, available beef supplies have been limited, and retailers are willing to step in a bid up the market. Last week, Choice carcasses gained over $25, and Select was $16 higher. The trend in retail values maintained, at the close as Choice carcasses added an additional 4.97 to 329.80 and Select was 5.53 303.55. This moves retail values to their highest levels since this spring and within range of the $340.00 high from that window. The concern will be the cost starting to pare demand, and load count was light at 78 loads today.
HOGS
Hogs are called steady to higher. Futures had a strong start to the week as the discount in the October contract to the index and the expired August contract brought the buyers forward. Going into Monday, October futures were trading $23.00 under the index, a historically wide discount, and the market decided to start closing the gap. The lean hog index was .29 lower to 109.90, and with the strong futures move, the discount narrowed by 2.765 to -20.900 of futures under the index. Futures gapped higher in October and finished near the high for the day, opening the door for additional buying support on Tuesday morning. Resistance over the October hogs will be near the $90-91 level, hitting the trend line over the most recent set of highs. Moving beyond that point will take some friendly fundamental news. Cash hogs prices were quiet due to confidentiality, but National direct prices ranged from 94-100, with an Average of $95.68, down $2.29. Carcass values have failed to support the market, losing 6.33 to 119.35 at the close on Monday on moderate demand of 317 loads. The weak close will provide pressure on the Today’s open.
Author
Matthew Strelow