CORN
Corn futures were lower overnight. After consolidating around the 3.40 area in the December contracts, prices have fallen back below the 100-day moving average at 3.38 to 3.36 after losing 4 cents last night. Despite the impact of the derecho in Iowa, the market still has a heavy overall supply picture. A clearer picture of damage to crops in the path of last week’s storm emerged on Wednesday, as crop scouts on the annual Pro Farmer tour scrambled across blown over corn stalks and wind-battered soybean fields in Illinois and Iowa; Iowa officials on Tuesday warned much of the crop in the path of the Aug. 10 storm would not be harvested; some 14 million acres, or 57% of Iowa’s area planted, were impacted. The tour projected corn yields in Iowa’s crop District 1, in the state’s northwest corner, at 181.26 bushels per acre (bpa), down from 184.88 bpa last year and below the tour’s three-year average of 183.47 bpa. Corn yields in west-central District 4 were pegged at 172.41 bpa, down from 192.71 bpa last year and the three-year average of 186.28 bpa. Corn yields in southwestern District 7 were seen at 184.74 bpa, down from 186.28 bpa a year ago and the three-year average of 183.92 bpa. Export demand will be closely watch on this morning’s USDA weekly exports sales. Trade estimates range between 500,000 and 1.35 mil bu combined for old crop and new crop. The dollar managed to reverse its lower course yesterday and firm this morning. U.S. corn is holding a premium to our global competitors at these prices. September option expiration on Friday will likely keep volatility in the market through the end of the week. Managed Money is net short an estimated 116,000 corn contracts.
SOYBEANS
Soybean futures lost 8 cents overnight after topping out on Wednesday as demand stays strong for U.S. beans. Beans posted a new summer high for the 3rd consecutive day this week. Yesterday marked an 11 for 12 record of days with announced export sales. China and the U.S. have agreed to hold trade talks “in the coming days” to evaluate the progress made on their Phase 1 trade deal at the six-month mark after it was reached in January, China’s commerce ministry said. Weekly export sales should stay supportive with expectations of 2.1-3.0 MMT old and new crop sales last week. The 6 to 10 day forecast for the Midwest does see a front bringing light to moderate rainfall to 65% of the region favoring the north and east; Temperatures are seen moving to average to above as we move into the weekend and next week. Should dry conditions prevail, prices should find support as the final development of this years bean crop diminishes. The Pro Farmer crop tour found soybean pod counts per three-by-three foot area averaged 1,013.31 in District 1, compared with 1,095.93 pods last year and the three-year average of 1,054.75. In District 4, pod counts averaged 1,177.41, down from 1,196.06 in 2019 and the three-year average of 1,204.74. District 7 soybean pod counts averaged 1,164.03, below last year’s count of 1,221.13 and the three-year average of 1,266.65. For today, Managed Money is net long an estimated 61,000 contracts of soybeans; net short 18,000 lots of soymeal, and; long 63,000 soyoil.
WHEAT
Wheat futures traded 5 to 6 cents lower overnight and could be poised to move lower with seasonal weakness. Prices had consolidated at the top of the most recent rally with resistance over the December Chicago contract at $5.30. Global wheat supplies are heavy and, despite a weak dollar, U.S. prices are not competitive overall with the rest of the world. Tender activity wires showed Japan buying 117,000 tons of wheat from the U.S., Canada and Australia in a routine purchase. Trade estimates for this morning’s USDA Weekly Export sales are 300,000 to 600,000 tons. Managed Money is estimated to be net short 7,000 contracts of SRW wheat.
CATTLE
Live cattle calls are steady for this morning. The market is having a having a hard time pushing higher despite the strength seen in retail values and the trend higher in cash. Cash trade is still developing around $106-107, up $2-3 over last week in the south. Look for activity centered around this and tomorrow afternoon’s August Cattle on Feed report.
HOGS
Lean hog futures are called steady to lower. Today’s Weekly export sales could be key this week after a disappointing week last week. Hog prices were supported on Wednesday with a firm retail value, supported by a $19.00 jump in hams. The market is on a short term uptrend and could see additional short covering with a strong export sales numbers.
Author
Matthew Strelow