After the Bell | August 24, 2023

Corn: Corn futures traded modestly lower most of the session, trying and failure several times to turn prices positive but ultimately failed as price fell 2 1/4 cents to $4.88 1/4. Today’s Crop Tour looking at objective yield samples across Iowa will give a good look as to how dry conditions have affected the top producer. Temperatures are expected to cool Friday and into the weekend in the Midwest and northern Plains, reducing crop stress that has likely caused some early crop maturation, World Weather Inc says. Precip is expected to remain scarce over the next ten days across the central and western Midwest and portions of the Plains.

Scouts on day 3 of the Pro Farmer Crop Tour found an average yield of 193.72 bu. per acre in Illinois, up from 190.71 bu. last year and the three-year average of 192.14 bu. per acre. In western Iowa, average yields for Districts 1, 4 and 7 were 182.58 bu., 168.71 bu. and 184.84 bu. per acre, respectively, compared to 183.37 bu., 188.74 and 173.70 bu. per acre, respectively last year. The three-year averages for Iowa Districts 1, 4 and 7 are 182.11 bu., 184.77 bu. and 183.64 bu. per acre, respectively.

USDA’s Weekly Export Sales Report showed net sales reductions of 22,700 MT for 2022-23, which were down noticeably from the previous week and four-week average. Net sales of 673,500 MT were reported for 2023-24. Traders expected sales to range from 0 to 250,000 MT for 2022-23 and 200,000 to 750,000 MT for 2023-24.

Soybeans: November soybeans rose 11 1/4 cents to $13.71 3/4, a three-week high close, while September meal rose $9.70 to $422.70, while September soyoil rose 61 points to 65.54 cents.Soybeans turned decidedly higher after briefly falling victim to pressure in soyoil futures early in the session. Sustained strength in meal futures after a gap higher to begin the overnight session lent the necessary support gains to a three-week high close. USDA’s Weekly Export Sales data also proved noteworthy, with old-crop export sales in week-ended Aug. 17 reaching the highest level this late in the marketing year at 364,900 MT, topping the expected range of 0 to 200,000 MT. Meanwhile, new crop sales of 1.218 MMT were reported, which were near the top-end pre-report estimate of 1.25 MMT. Meanwhile, traders will continue to monitor weather closely as August winds down. World Weather Inc. reports rainfall will continue to be limited in the western and central Midwest and in a portion of the Great Plains for another ten days, though remnants of Tropical storm Harold will bring heavy rain through the central Rocky Mountains and emerge into the central Plains late this weekend.

On Day 3 of the Pro Farmer Crop Tour, scouts found average soybean pod counts in a 3’x3’ square of 1,270.61 in Illinois, up from 1,249.70 last year and above the three-year average of 1,258.96. In western Iowa Districts 1, 4 and 7 scouts found average pod counts of 1,137.24, 1,120.30 and 1,170.28, respectively, compared to 1,089.74, 1,258.94 and 1,223.85, a year-ago and the three-year averages of 1,064.13, 1,220.52 and 1,251.83. Final results for Iowa and Minnesota will be released on our website tonight at 8:00 p.m. CT.

Wheat: December SRW wheat futures lost 8 cents at $6.31 3/4 and near mid-range. December HRW wheat futures were down 1 1/4 cents at $7.62 1/2 and nearer the session high. December spring wheat futures fell 4 cents on the session before closing at $7.99 1/4. The wheat futures markets were pressured in part today by modest losses in the corn futures market and solid gains in the U.S. dollar index, which was poised to close at its highest level since last March. Ideas that Ukrainian grain shipments will reach their destinations via routes other than the Black Sea are also a bearish underlying element for the wheat markets at present. USDA this morning reported U.S. wheat sales of 406,000 MT for 2023-24, up 13% from the previous week and 3% from the four-week average. The sales were at the upper end of trade expectations. World Weather Inc. today said that in the northern Plains any rain in the next seven days will occur mostly in northeastern areas, such as northern Minnesota and northeastern North Dakota. “This rain will be helpful for any immature, late season crops. However, more rain will still be needed in other parts of the region,” said the forecaster.

Cotton: Cotton futures continued the recent bounce but remain in a downtrend from the July 26 high close, closing 27 points higher on the day at 86.09 cents. Futures appear to be in a volatile consolidation range after July’s breakout higher. Fundamentals remain bullish, with USDA likely cutting acreage forecasts and thus production based on FSA data released earlier this month. Weather conditions in Texas cotton country continue to deteriorate, adding fuel to the bulls’ fire. While supply concerns are at the forefront, concerns over demand remain, as export demand has been lackluster. Outstanding export sales are at the lowest level since the 2016/17 crop year for this date and today’s export sales announced at 40,200 RB for the 2023-24 crop year did little to instill confidence things will get better. Sales were down 79% from the previous week and 73% from the prior four-week average. Export demand can turn on a dime, though, evidenced by the 2016-17 crop year ending with a total of 14.917 mil. RB. USDA currently forecasts 2023-24 exports at 12.500 mil RB. Cotton strength recently in the face of a weaker crude oil market shows the resiliency of bulls, though volatility spilling over from the Jackson Hole Fed symposium starting tonight could influence prices going into the weekend.

Cattle: October live cattle futures rose $2.05 to $180.725, while October feeder cattle futures gained $2.375 to $253.25. Both markets closed near their daily highs. Today’s solid gains in the futures markets suggest beef packers are being forced to pay up for fed cattle. With scorching heat dominating the western Plains and especially Kansas this week, cattle have a hard time gaining weight unless they have shade. Cash cattle trading this week has been light so far, with some Iowa steers trading at $186.11 and some 60% Choice lots changing hands at $183.00 in Nebraska on Wednesday. The noon report today showed Choice grade boxed beef cutout value up 16 cents at $317.21, while Select rose 50 cents to $292.09. The Choice/Select spread is $25.12. Movement at midday was 60 loads. USDA this morning reported U.S. beef export sales of 11,400 MT for 2023, down 25% from the previous week and 28% from the four-week average. The live and feeder cattle futures charts continue to favor the bullish camps, which should continue to limit speculator selling interest in the near term.

Hogs: Wholesale market strength seemed to spark hog buying Thursday. October futures rallied $1.925 to $80.475 at the close. Despite the sizeable discounts nearby futures hold to cash, falling cash and wholesale pork prices have pushed them lower lately. For example, after having been quoted at $105.63 as recently as August 3, the CME lean hog index for Tuesday was officially stated at $97.37 this morning. Moreover, Wednesday’s preliminary quote at $96.40 indicated the index’s largest daily drop, 97 cents, in the ongoing decline. However, after moving steadily lower lately, pork cutout posted a $3.38 jump to $104.17 at midsession today, which likely reflected active grocer buying for planned pork features over Labor Day weekend. That buying may continue into early next week. But, given the time of year, when slaughter rates are surging seasonally and the grilling and BLT seasons are winding down, the rebound will probably prove temporary. Still, with today’s modest wholesale beef gains and the late-morning surge in cattle and feeder cattle futures suggesting beef packers are being forced to pay up for feedlot cattle, the hog and pork complex apparently benefited from considerable spillover support. Today’s October futures bounce from recent lows suggest there was a technical component to the rally as well.