CORN
Corn futures were narrowly mixed overnight, trading only a 3-3/4 cent trading range in the December contract between 5.65 and 5.61-1/4. Prices reacted favorably to a 2% decline in weekly crop ratings, but, overall have closed lower three days in a row after a bullish Supply and Demand report released last week. Fundamentals are supportive, but until the demand starts to show up like in beans,
prices are unlikely to rally. In comparing the U.S. to our South American competitor, Argentina is still the cheapest corn on the export market, and they have been absorbing the global export business, particularly amid a rise in the greenback. Corn-yield averages in Indiana looked to be above estimated averages in 2020, according to a scout on day 2 of the 4 day Pro Farmer Midwest Crop Tour. Corn is rapidly maturing amid dry weather, and stalk quality is good, but the crop is seeing “heavy disease pressure”. Yields in north-central Indiana average 193.6 bu/acre after nine stops through midday. Last year, statewide the yield average was 179.84 bu, tour data shows. Corn yield potential averaged 179.1 bu/acre after seven tops in Nebraska counties of Seward, Saline, Gage and Lancaster, with a low of 118 bu in Gage and high of 237.2 in Seward. That’s on par with the 2020 crop tour average of 179.9 bu for this part of Nebraska and above the three-year average of 175.8. Today, we’ll get Weekly Ethanol Stats. Output for the week ending Aug. 13 is seen slightly higher than last week at 987,000 bu per day with Stockpiles average estimate at 22.172 mil bbl vs 22.276 mil a week ago.
SOYBEANS
Soybean futures are down a nickel this morning to 13.56-1/2 (Nov). Technically, prices continue to plot a sideways course around congested moving averages, underpinned by the 100-day at 13.47. The soybean market has seen nine consecutive days of export sales announcements to China and unknown, but the November contract looks to struggle to test the 13.80 area of near-term resistance as harvest nears. Soybeans for delivery to unknown destinations for the 2021/2022 marketing year are also viewed as supportive and continue to suggest that importers are now turning to the U.S. for their needs. Chinese Jan bean futures overnight were up 13 yuan ; Soymeal down 25; Soyoil down 100; Malaysian palm oil prices overnight were down 117 ringgit (-2.65%) at 4291 with weakness in other vegetable oils, a slump in Malaysian shipments and the country’s move to increase the reference price to calculate export taxes hurting sentiment. Soybeans are looking taller and better as the Pro Farmer tour moves west from Ohio toward Iowa: Soybeans averaged 1116.57 pods in 3-foot-by-3-foot square. Last year, Indiana was 1281.12 pods, and the 3-yr average for Indiana is 1172.31 pods. Tour doesn’t estimate soybean yields. On the western leg, soybean pod counts averaged 1,181 pods in a 3-by-3-foot square, with a low of 672 pods in Gage, NE and a high of 1,881 in Saline, NE. The average is below 1,375 pods on the tour last year and the three-year average of 1,286 pods.
WHEAT
Wheat futures were down slightly overnight with Dec Chicago, KC and MPLS contracts off 3-1/2 cents to 7.45, 7.25-3/4 and 9.04, respectively. The dollar is on the rise again and is taking a third stab at making new multi-month highs, thus weighing on export potential for U.S. wheat supplies. This is one of the bearish influences a wheat complex that is continuing to correct itself, technically, from an overbought condition. Rain in the forecast for the Dakotas this week after a hot spell is also noted. The US spring wheat harvest is at 58% complete, which is well ahead of the 36% average for this time of year. Meanwhile, the German wheat crop was estimated lower following a heat wave.
CATTLE
Cattle futures are called steady to weaker following a soft finish yesterday after prices failed to push through resistance. More profit-taking pressure can be expected this morning after prices faded into the close despite another strong move higher in retail carcasses. At midday, Choice carcasses gained over $5.00, and finished with strong gains, up 8.26 to 338.06, and Select pushed 3.22 to 306.77 on Moderate demand of 122 loads. The Choice/Select spread remains extremely wide at 31.29, reflecting the strong bid for Choice by retailers. Despite the strong retail market, the cash market has stayed quiet, disappointing the market. A few deals are starting to form, but not enough to establish a trend. More trade will build later in the week. Feeder cattle have been trending lower in the near-term, and close technically weak on Tuesday. This could lead to additional long liquid on Wednesday.
HOGS
Hogs are called steady to lower. Futures consolidated within Monday’s strong trading range on some profit taking yesterday and may be looking for direction or some news to push prices higher. The cash market has been weak, but on Tuesday the National Average prices ranged from $92.50-105.00, and averaged 98.32, up 2.64 from the previous day. The Lean Hog Index was .23 lower to 109.67, but still trading at an $21.77 premium to the October contract, which is supporting the market. Retail pork carcasses were strong at midday, gaining 8.46 as buyers stepped into the market, but lost those values closing 1.23 lower to 118.12. Demand was strong at 406 loads. The high amount of volatility in the pork carcass values is making the hog market cautious, and the weak close in retail value will weigh on the price open today.
Author
Matthew Strelow