TFM Sunrise Update 8-31-2021


Corn futures were mostly unchanged overnight.  Dec corn is at 5.41 this morning, down 1-3/4 cents in a weaker looking trend heading into harvest.  The December chart is highlighted by a series of lower highs since topping out at 6.38 on May 7, and yesterday’s early gains gave way to a weaker close.  This week’s USDA Crop Progress report showed the Good-to-Excellent category left unchanged at 60%.  The trade was expecting a slight decline of 1%.  Rains from Hurricane Ida are expected to keep harvest progress at bay in many areas of the south.  Corn dented is 59% vs 41% last week, and 60% a year ago.  Corn dough is at 91% vs 85% last week, and 93% a year ago.  Maturity, 9% vs 4% last week, and 11% a year ago.  Basis bids for corn and soybeans shipped by barge to the U.S. Gulf Coast fell sharply on Monday after Hurricane Ida damaged at least one export terminal and knocked out power to others, leaving traders uncertain when shipments would resume.  The USDA is scheduled to release its July Fats and Oils report along with the Grain Crushings report tomorrow at 3pm.  Corn used in ethanol production seen up 5.8% year over year to 448.8 mil bu.


Soybean futures stabilized overnight after weakness to start the week.  Nov beans traded a 10 cent range last night between 13.12 and 13.02 near the lower end of Monday’s trading range.  Downward momentum in beans spell a choppy to weaker technical outlook for the complex.  Like corn, bean contracts are plagued by a series of lower highs on the charts since peaking on June 7.  Yesterday, Stats Canada pegged the canola crop at 14.7 mil tons, down from 24% last year but well above the trade estimate of 14.1 mil.  Weekly U.S. crop ratings  were 56% G/E vs 56% last week, and 66% a year ago.  Soybean dropping leaves at 9% vs 3% last week, and 7% a year ago.  Chinese Jan bean futures were down 72 yuan overnight; Soymeal down 18; Soyoil down 34; Palm oil down 42;  Malaysian palm oil prices overnight were down 79 ringgit (-1.82%) at 4254.  The USDA is scheduled to release its July Fats and Oils report along with the Grain Crushings report tomorrow at 3pm.  Soybean crush is seen at 165.2 mil bu in July, a 10.4% drop from year ago.  Crude and once-refined soybean-oil reserves at end of July are seen at 2.136 bil lbs, up from 2.123 bil.


Wheat futures were mixed overnight and are down slightly this morning.  Prices are underpinned by Stats Canada’s all wheat production estimate of 22.9 mil tons, down 35% from last year and slightly higher than average estimates for 22.6 mil.  This is the lowest production in 14 years.  Another positive for U.S. wheat prices is that the recent lower wheat crop estimates and export potential from Russia.  Meanwhile, the beginning of row crop harvest season could keep rallies in check, unless corn and bean prices reverse and move higher.   Dec Chicago wheat is off a nickel this morning to 7.18-1/2.  Dec KC is unchanged at 7.12-1/2.  Dec MPLS wheat is down 4-3/4 cents to 9.05.  Spring wheat harvest 88% G/E vs 77% last week, and 66% a year ago


Cattle futures are called steady to lower as long liquidation keeps pressure in the market.  Retail values are turning softer and retail beef may be reflecting the post-Labor Day seasonal window.  At the close, Choice beef lost 2.56 to 342.78, and Select was down 2.97 to 312.55.  The load count was light at 86 loads.  Despite weakness, boxed beef values are still at historical highs, and could support the market.  The cash market was undefined to start the week.  The trend in the cash market will have an impact on futures prices this week.  Expectations are for a steady to possibly higher bid.  Technically, futures are challenging support levels, and if the fundamentals continue to soften, could fall in both Live cattle and feeder cattle charts, opening the door for additional long liquidation along with the prospects of money flowing in on the short side of the market.


Hogs began the week softer, but held the majority of the gains from the strong close last Friday.  Look for a choppy to weaker start today.  The weak cash market market makes it difficult for futures to push higher.  National Direct cash hogs are trending lower, and closed lower on Monday afternoon, losing 1.82 to 90.72, with a range of $88.00-96.00 on Carcass Base prices.  Pork cutout values were weak at the close losing 6.87 to 109.72, disappointing the market.  Load count was light at 271 loads.  The weak retail values will likely pressure the market.  The strong close on Friday allowed front month prices to challenge trend line resistance over the recent highs, the lack of follow through on Monday and the weak fundamental picture will likely pressure the market today.


Matthew Strelow

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