Corn: December futures rose 2 1/2 cents to $5.33 a bushel. Corn futures mildly favored the upside ahead of USDA’s Crop Production and Supply and Demand reports tomorrow. USDA is expected to trim its estimate of the U.S. corn harvest by about 0.2%, to 14.973 billion bu., based on a Reuters survey of analysts. The average U.S. yield is expected to be cut 0.2% to 176 bu. per acre. But given bigger-than-expected Sept. 1 stocks, USDA may also increase projected 2021-22 ending stocks. Any surprises could push corn higher or lower, but post-report price direction may also be drawn from soybeans, since traders expected bigger USDA changes. Corn harvest continues to roll along, though rains slowed progress in some areas. USDA will update harvest progress tomorrow afternoon, with the weekly Crop Progress report delayed due to today’s federal holiday. Corn yield reports continue to be highly variable, with some of the better crop areas this year not living up to lofty expectations, while yields in some of the drier areas are coming in stronger than feared.
Soybeans: November soybeans fell 14 3/4 cents to $12.28 1/4 a bushel, the lowest closing price since $11.86 1/4 on March 30. December soybean meal fell $1.60 to $317.10 per ton, the lowest closing price since $313.80 in late September 2020. December soyoil fell 100 points to 60.51 cents per pound. Soybean futures slumped to the lowest levels in over six months ahead of a USDA Crop Production report that expected to show a larger U.S. harvest than the government projected a month ago. USDA is expected to increase its estimate of the U.S. soybean crop by 0.9% to 4.415 billion bu., while the average yield is expected to rise 1.0%, to 51.1 bu. per acre, based on a Reuters survey. The projected crop would be up 6.8% from last year’s soybean harvest and fall just shy of the record 4.428 billion bu. crop in 2018. The U.S. soybean harvest was ahead of schedule last week, but rainfall expected this week in much of the Midwest may keep many farmers out of their fields.
Wheat: December SRW wheat fell 2 1/4 cents to $7.31 3/4 a bushel, the lowest closing price since $7.25 1/2 on Sept. 30. December HRW wheat closed fell 3 cents to $7.34 1/2. December spring wheat futures fell 1 cent to $9.45 1/2. Beneficial rains fell in central Oklahoma and south-central Kansas, with more expected in southeastern parts of the wheat region this week, according to World Weather. The moisture may help recently-seeded winter wheat. Rain also fell across North Dakota, northern South Dakota and west-central through northern Minnesota during the weekend. These areas and a larger part of South Dakota will get additional moisture tomorrow through mid-week. Tomorrow’s monthly USDA Supply and Demand report is expected to show U.S. wheat supplies at the end of the 2021-22 marketing year cut about 6.3% to 576 million bu., based on a Reuters survey. Traders also expect USDA to reduce its world wheat ending stocks forecast by about 0.8%, to 280.82 MMT.
Cotton: December cotton fell 81 points to $1.0979 cents a pound, after soaring 6.8% last week and notching a contract high at $1.1648 on Friday. December futures fell a second day as traders awaited USDA’s monthly Supply and Demand report tomorrow. The report is expected to show U.S. cotton production at 18.37 million bales, based on the average analyst forecast. That compares to 18.51 million bales of U.S. production forecast in the September USDA report. USDA is expected to adjust U.S. exports slightly higher and ending stocks down slightly. Strong weekly U.S. cotton sales reports have stirred speculation USDA may bump up exports. Weather this week and next week should be favorable for U.S. cotton crop development. Too much rain in recent weeks has negatively impacted crops in the Delta and southeastern states, but conditions should be better over the next couple of weeks.West Texas weather should remain mostly good for crop maturation with no frost potential during the next two weeks.
Cattle: December live cattle futures fell 7.5 cents to $130.175 per hundredweight following last week’s 4.0% rally. November feeder cattle rose 57.5 cents to $161.725. Price action was light and choppy to kick off the week. On cash markets, live slaughter-ready steers last week averaged $122.96, up 40 cents from the previous week and the first weekly increase in six. Still, slumping boxed beef prices must stabilize before futures gain sufficient buying interest to push much further above the cash market. October live cattle finished today at a $2.665 premium to last week’s cash trade.
On the wholesale beef market, Choice values fell 15 cents early today to $283.12, while Select firmed $1.69 to $264.43. Choice beef is trading at the lowest levels since early August, but still around $18 above the level where retailer demand picked up on the sharp price break that culminated in mid-July earlier this year.
Hogs: December lean hog futures fell $1.325 to $80.175 per hundredweight, the lowest closing price since $76.80 on Sept. 24. Hog futures extended a selloff from two-month highs reached in late September amid pressure from eroding cash fundamentals and technical weakness carried over from last week’s 4.3% drop. Carcasses on national direct markets early today averaged $68.37, down 89 cents from Friday. The next CME lean hog index is expected to fall 35 cents to $91.60, near a six-month low of $91.47 reached in late September.
A rebound in wholesale pork prices could limit declines in futures. Pork cutout values early today rose $5.44 to $112.43, led by a jump of over $22.00 in bellies. But cutouts have often posted preliminary gains in recent weeks, only to officially end the day lower. Cutouts remain near Friday’s average at $106.99, which was down 5.6% on the week and the lowest price since $104.29 on Sept. 23.