After the Bell | August 21, 2023
Corn: December corn fell 10 1/2 cents to $4.82 1/2, closing near the session low. Corn futures gave up overnight strength, with SRW wheat weakness and a fading soy complex casting a shadow over prices. A daily export sale of 111,770 MT for delivery to Mexico during 2023-24 and forecasts of hot, dry weather this week failed to lend continued support. USDA’s weekly export inspection data earlier today showed inspections of 482,526 MT (19.0 million bu.) for week ended Aug. 17, which rose 23,496 MT on the week and were near the top-end of the pre-report range of 200,000 to 550,000 MT. Traders are anticipating USDA’s updates to weekly crop ratings, which are expected to stay flat on the week at 59% “good” to “excellent,” according to a Reuters poll.
Meanwhile, the first state results of the Pro Farmer Crop Tour will be released this evening. Scouts on the eastern leg of the tour began sampling fields in Dublin and will work their way to Noblesville, Indiana. The western leg of the Tour began scouting in Sioux City, South Dakota and will finish the day in Grand Island, Nebraska. Tour results will be released on our site this evening for Ohio and South Dakota.
Soybeans: November futures closed nearly 20 cents off overnight highs, settling 8 1/2 cents higher at $13.61 3/4. Soybean oil saw similar price action, rising sharply in overnight trading but faded lower as the day went on, with September futures falling 31 points to 63.78 cents. September soybean meal showed relative strength, rallying $5.90 to $409.80. Dry weather is expected to dominate the central and western Midwest along with the middle three fourths of the Great Plains and northern Delta for at least another ten days, World Weather Inc says. Hot temperatures are expected in this region as well, with highs in the 100’s for most of the region. Cooling is expected from Friday into the first part of next week, the forecaster says.
USDA reported weekly export inspections of 316,074 MT for week ended Aug. 17, which were down 101,831 MT from the previous week. However, inspections were within the pre-report range of 200,000 to 500,000 MT. Inspections for the week ended Aug. 10 were revised higher as well, pointing to a likely beat of the current USDA export estimate. This morning, the USDA reported a daily sale of 159,350 MT for delivery to unknown destinations during 2023-24. Crop conditions are expected to rise one point to 60% “good” to “excellent” in this afternoon’s Crop Progress report, according to a Reuters poll.
Wheat: December soft red winter wheat futures fell 13 1/2 cents to $6.25 1/2. December hard red winter wheat futures were down 12 1/2 cents at $7.48 1/4. Prices closed nearer their daily lows. December spring wheat fell 18 3/4 cents to $7.99, the lowest close since June 1. The wheat futures markets today fell victim to increasing optimism Ukrainian grain shipments out of the country will continue to flow and reach intended destinations. Reports said Ukraine is finalizing a deal with global insurers to cover grain ships traveling to and from its Black Sea ports.
Earlier today, USDA reported weekly U.S. wheat export inspections of 311,314 MT in week ended Aug. 17, which rose 42,046 MT from the previous week and were within market expectations. World Weather Inc. today said the Northern Plains will see limited rainfall in the next seven days. However, some pockets of meaningful rainfall are expected. Much of the rain that occurs will be in western Montana and in northern areas near the Canada border. This afternoon’s weekly USDA crop progress report is expected to show the U.S. spring wheat condition at 42% good to excellent, compared to 42% last week and 64% last year at this time. U.S. winter wheat harvested is seen at 96% complete, compared to 92% last week and 95% last year at this time.
Cotton: December cotton rose 9 points to 83.71 cents, ending near the session low after trading as high as 85.16 cents. Cotton futures were able to ratchet out mild gains despite a notable retreat following a test of technical resistance at the 10- and 20-day moving averages. A fading demand outlook for the natural fiber continues to hover over prices despite a lingering heat wave across the southern Plains. World Weather Inc. notes cotton in Texas is not likely to receive any serious relief from dryness anytime soon, though a tropical disturbance in the Gulf of Mexico will make landfall on southern Texas early Tuesday likely as a tropical depression or a weak tropical storm, which will discolor some cotton while rain is not likely to be heavy enough to string out cotton from the bolls. The forecaster indicates drier weather will resume Wednesday through Sep. 3 and the infrequent and mostly light showers that occur should not have much of an impact on cotton or soil conditions, which should cause dryland yields in western Texas, southwestern Oklahoma and the Blacklands to continue to decline. Meanwhile, USDA will update its weekly condition ratings, which will likely show continued crop degradation in Texas. Last week, USDA reported a 5% drop to 36% in the crop’s “good” to “excellent” rating.
Cattle: October live cattle futures rose $1.05 to $179.875, while October feeder futures gained $1.95 to $252.65. The cattle futures markets drew some support today from lower corn prices and from scorching heat over much of the Midwest and southern Plains that will likely cause serious heat stress on livestock this week. World Weather Inc. today said dryness and extreme heat will continue to impact the region through Thursday. The high-pressure ridge is likely to build back into the region to some extent in the second week of the outlook with a potential for more extreme heat. Also supportive for cattle futures today, last Friday’s bullish USDA Cattle-on-Feed report showed there were 11.03 million head of cattle in large feedlots as of Aug. 1, down 259,000 head (2.3%) from year-ago and 140,000 head less than the average pre-report estimate. Placements fell 8.3% from year-ago levels in July and were lower than anticipated after consecutive months of topping expectations. Last week’s cash cattle trading averaged $185.04, down 84 cents from last week’s five-area average. Today’s noon report showed wholesale beef prices lower, with Choice grade down 87 cents to $315.24, while Select grade fell $2.46 to $285.90. Movement at midday was light at 39 loads.
Hogs: Hog futures failed at technical resistance Monday, with nearby October dropping $1.50 to $80.625. After futures rebounded strongly late last week, seasonal weakness in the hog and pork sector again took over futures Monday. A portion of the selling likely reflected the ongoing cash market slide, as indicated by the latest readings for the CME Lean Hog Index. The exchange officially confirmed last Thursday’s 71-cent drop to $99.61. In addition, the USDA’s data for last Friday puts that day’s preliminary index quote another 80 cents lower at $98.81. The ongoing seasonal slide in pork cutout values, reflecting the usual late-summer combination of reduced demand and increasing production, seemed to stall at midsession, with cutout edging up 17 cents to $106.34. Firmness at this time isn’t terribly surprising, since grocers are probably buying rather aggressively as they build inventories ahead of planned retail features over Labor Day weekend. Still, the industry is just as likely looking forward to reduced consumer demand as the grilling and BLT seasons wind down.
