Market Snapshot | August 9, 2023

Corn is mostly a penny lower at midmorning.

• Corn futures are chopping around unchanged, with pressure stemming from the wheat complex, with gains in the soy complex limiting selling.
• Traders are starting to position ahead of Friday’s USDA reports, which will include the first survey-based crop estimates for corn, soybeans and cotton. Updated U.S. and global balance sheets will also be released. Click here to see the pre-report estimates.
• Weekly ethanol production during the week ended Aug. 4 fell 44,000 barrels per day (bpd) to an average of 1.023 million bpd but was 1,000 bpd above last year. Ethanol stocks rose 20,000 barrels to 22.880 million barrels.
• Northern China warned of crop and animal disease breaking out as flood waters retreated from rural areas, after more than a year’s worth of rainfall fell last week from storms that followed Typhoon Doksuri.
• In very narrow trade, December corn continues to meet resistance at $5.03 1/4, while $4.96 serves as initial support. 

Soybeans are trading mostly 6 to 8 cents higher, while September meal futures are around $1.00 lower. September soyoil is modestly higher.

• Soybean futures are posting followthrough gains amid forecasts for a warmer, drier period beginning early next week, though weakness in meal is limiting buyer interest.
• USDA announced daily soybean sales of 251,000 MT to China for delivery during 2023-24.
• World Weather Inc. reports a drier weather pattern will occur Tuesday through Aug. 23 while temps are expected to warm late next week into the following weekend. Some late-developing crops will be left in need of another round of timely rain.
• China saw a decrease in both consumer and producer prices in July for the first time since November 2020, escalating concerns about deflation in the world’s second largest economy. China’s consumer price index (CPI) fell 0.4% vs. last year in July, the first year-over-year decline since Feb. 2021.
• November soybeans poked above initial resistance of $13.17 1/4, with additional resistance at $13.28 1/2. Initial support lies at Tuesday’s close of $13.06.

SRW wheat is 13 to 16 cents lower, while HRW is 7 to 11 cents lower. HRS contracts are mostly 8 to 9 cents lower.

• Wheat futures are extending lower as technical resistance and expectations of little to no bullish changes on Friday’s USDA report create headwinds for the complex.
• Russian ports are overflowing with grain despite record shipments. Port capacity is being stretched with some terminals in the Azov Sea reportedly not accepting grain due to a lack of storage. Smaller ports are more overloaded than the main Black Se grain port of Novorossiysk, noted SovEcon. Any escalation in the Black Sea could have a sizable impact on global grain trade.
• Turkish President, Recep Tayyip Erdogan has said he aims to revive the Black Sea grain deal with an “expanded scope,” calling on western countries to help turn the initiative into the basis for peace between Russia and Ukraine.
• September SRW futures have dropped below support at $6.45 1/4, with additional support at $6.34 1/2. The 10-day moving average of $6.66 3/4 is providing initial resistance.

Live cattle are mixed, while feeders are posting modest gains.

• Live cattle futures continue to trade cautiously as cash cattle negotiations are expected to stretch deep into the week. 
• Cash cattle negotiations have been slow as expected, with packers wanting to buy cattle at lower prices while feedlots seek higher values.
• Wholesale beef made solid gains on Tuesday, with Choice rising 90 cents to $302.39, while Select gained $1.15 to $276.16. Movement improved to 120 loads for the day. 
• October live cattle are pivoting around the 20-day moving average of $181.29, while resistance stands at $181.78. Initial support lies at the 10-day moving average of $180.90, with additional support at $180.27.

Lean hogs are lower, with deferred contracts marking heavy losses.

• Nearby lean hog futures are edging moderately lower, while deferred contracts post sharp losses amid further evidence a seasonal top has formed.
• The CME lean hog index is down another r46 cents to $104.58 as of Aug. 7. The index has declined six of the last eight days and is $1.42 below its July 28 peak.
• The pork cutout value fell $3.22 lower on Tuesday to $112.09, led by a $17 drop in primal bellies, though all cuts were lower except picnics. The cutout is down $5.12 from its late-July peak. While pressure on the cash and product market hasn’t been sharp, there are increasing indications seasonal tops have been posted.
• October lean hogs gapped lower at the open, below the 10-day moving average of $84.21, which now serves as resistance, while support lies at the 40-day moving average of $82.04.