Market Snapshot | August 18, 2023

Corn is mostly 3 to 5 cents higher at midmorning.

• Corn futures posting gains for the third straight session amid escalating tensions between Russia and Ukraine and a return of hot, dry weather over the weekend.
• USDA reported a daily corn sale of 112,000 MT to Mexico for 2023-24.
• A Ukrainian drone smashed into a building in central Moscow earlier today after Russian defenses shot it down, Russian officials said. The attack on Russia’s capital raised fears of further escalation in the Russia/Ukraine war. Meanwhile, a fire broke out in a cargo area of Russia’s Black Sea port city of Novorossiysk, according to state media.
• December corn has extended above the 10-day moving average of $4.89 1/4 for the first time since Aug. 11, though $4.95 is providing resistance. Initial support lies at $4.83 1/4.

Soybeans are trading 18 to 20 cents higher, while September meal futures are around $3.50 higher. September soyoil is marginally higher.

• Soybean futures sharply higher amid heightened production concerns on forecasts of hot, dry weather into the end of the month.
• Heat and dryness is expected to build across the Plains and Midwest during the weekend and next week, raising the potential for crop stress, states World Weather Inc. This will maintain concern about soybean production.
• India is heading for its driest August in more than a century, with scant rainfall likely to persist across large areas, partly due to the El Niño weather pattern. August rainfall is expected to be the lowest since records began in 1901, threatening the country’s crops.
• November soybeans have jumped above the 200-day moving average $13.32 1/4 and the 20- and 40-day moving averages of $13.43 1/2 and $13.45. Additional resistance stands at $13.51, while initial support lies at Thursday’s close of $13.30.

SRW wheat futures are 16 to 20 cents higher, while HRW futures a 13 to 15 cents higher. HRS contracts are around a dime higher.

• SRW wheat futures are seeing corrective buying following an extended selloff since July 25.
• Russia’s wheat export tax for Aug. 23-29 will be 4,269.9 rubles ($45.64) per metric ton based on an indicative price of $235.40. That’s up from a rate of 3,712.8 rubles per metric ton the previous week and the highest level since the week of May 31- June 6.
• Romanian Prime Minister Marcel Ciolacu said earlier today he hoped 60% of Ukrainian grain exports will transition through Romania, but noted it was an ambitious target.
• September SRW futures have pushed above resistance at $5.98 1/4 and $6.07 1/4, $6.13 1/4 and the 10-day moving average of $6.22 1/2 serving as the next areas of resistance. Meanwhile, Thursday’s low of $5.86 1/4 is providing initial support.

Live cattle are posting mild gains, while feeders are sharply higher.

• Live cattle futures have rebounded from the lowest intraday level since early July, though gains will likely be limited as traders wait for USDA’s Cattle on Feed Report, due out after the close.
• While cash cattle prices have traded steady to $1 lower so far this week.
• Traders expect USDA’s Cattle on Feed Report this afternoon to show feedlot inventory as of Aug. 1 down 1.6% from year-ago, which would be the 11^th consecutive month of year-over-year declines. Placements are expected to have declined 5.5%, though that category has topped expectations the past couple of months. July marketings are expected to have dropped 5.2%.
• Wholesale beef prices rose solidly on Thursday with a $5.15 gain in Choice to $314.14, while Select rose $1.49 to $286.26, taking the Choice/Select spread to $27.88. Movement totaled 100 loads for the day. Packer margins are near positive, which could make them more aggressive with cash bids next week.
• October live cattle have traded as low as $177.625, breaching support at $177.81 for the first time since July 7, before modestly rebounding. Additional support lies at $177.29, while resistance stands at $178.64.

Lean hogs are posting moderate to strong gains at midsession.

• Lean hogs are higher as corrective buying efforts pull futures from near-term oversold territory.
• The CME lean hog index continues its seasonal slide lower, at $101.03 as of Aug. 16.
• The pork cutout value rose 52 cents on Thursday to $107.79, while movement totaled 209.7 loads.
• October lean hogs futures above resistance at $80.06, the 100-day moving average of $80.35 and the 10-day moving average of $80.77. Additional resistance serves at $81.00.