CORN

Corn futures  were down 3 to 4 cents overnight as farmers reward the recent rally with sales and the market digests all the numbers from Monday.  Corn crop ratings dropped another 2% to 62% Good-to-excellent and 14% poor-to-very poor (12% last week, 13% last year) with warm, dry weather quickly pushing this crop to maturity and reducing potential yield.  Iowa, the top US corn grower and number 2 soybean producer lost another 5% to 45% G/E as the impact of the derecho and dry weather deteriorate the crop, and down sharply from 73% at the start of the month.  US corn dented was 63% versus 44% a week ago; 37% last year, and; 56% average.  Corn maturity was 12% versus 5% a week ago, 5% last year, and 10% average.  Dec corn prices, at 3.54 are fighting strong resistance at the $3.63 level, which could contain upside in the short-term.

SOYBEANS

Soybean futures traded firm overnight.   Crop ratings slipped 3% to 66% G/E and; 10% poor-to-very poor (8% last week, 13% a year ago).  Dry weather across the corn belt could cut into yields further, bringing concern for even tighter supply in next Friday’s USDA report.  Soybeans dropping leaves was 8% versus 4% a week ago, 3% last year, and 8% average.  Demand in the market is strong and tighter supply will be supportive of price.  Prices are becoming overbought after having moved $1.00 off the August lows.  The 6 to 10 day outlook for the Midwest has mixed ideas from the models with both seeing a system for later Monday into Wednesday.  The GFS has light to moderate rains for the southern MN, northeast IA, and souther WI, northern IL, and most of MI.  The Euro model has light to moderate rains for all regions of the Midwest.  Temperatures will be falling to below average by the weekend and the first half of next week.

WHEAT

Wheat futures were weaker overnight while searching for a short-term top, and will likely be a follower of other grains.  The technical picture is improved and while searching for a high, heavy overall global supplies make for headwinds in that endeavor.  Wheat exports are running up 2% ahead of a year ago (up 2% last week) with the USDA currently forecasting a 1% increase on the year.  Overnight, S. Korea passed on a 70,000 ton option origin feed wheat tender.  Japan seeks 106,937 tons of option origin wheat in a routine tender likely to be sourced from the US and Canada.

CATTLE

Live cattle futures are called mixed to lower.  Charts are staying technically weaker as the October contract failed to push above the 50-day moving average.  Cash trade is undeveloped at this stage, and retail carcass values were softer at midday yesterday.  The trend in cash and retail values will likely lead the cattle market this week.

HOGS

Lean hog futures are called mixed.  Despite a $5.00 jump into retail value at midday, pork prices failed to move higher and consolidated.  Charts are technically weak after last week’s close and weekly reversal.  Ample supplies of market hogs to work though will limit rallies.  U.S. commercial pork production in August reached a new record at 2.339 billion pounds.

Author

Matthew Strelow