GRAIN CALLS
Corn: steady to 2 higher.
Soybeans: mixed to 6 higher
Wheat: mixed to 7 higher.
GENERAL COMMENTS: Corn futures saw a mix of followthrough selling and corrective buying overnight, with the latter currently helping the market to trade around a penny higher. Soybean futures are 5 to 8 cents lower, with traders continuing to book some profits after yesterday’s early rally to a 2.5-week high. Nearby winter wheat futures are mostly up 1 to 2 cents. Spring wheat futures are 4 to 6 cents higher. The U.S. dollar index is just above unchanged. Crude oil futures are posting moderate gains.
Scouts on Day 2 of the Pro Farmer Crop Tour measured average corn yield potential of 182.6 bu. per acre for Nebraska, which compares to 175.2 bu. per acre last year for the state and 175.6 bu. per acre for the three-year average. Soybean pod counts in a 3’x3’ square averaged 1,226 for Nebraska, which compares to 1,298 pods last year on tour and 1,269 pods for the three-year average.
Indiana samples resulted in an average corn yield of 193.5 bu. per acre, well above 179.8 bu. per acre last year and 174.5 bu. for the three-year average. Pod counts in a 3’x3’ square averaged 1,240 for Indiana, which compares to 1,281 pods last year on Tour and 1,172 pods for the three-year average. Find more perspective from Tour leaders in their “From the Rows” columns. Today, scouts on the eastern leg of the Tour travel from Bloomington, Illinois to Iowa City. Scouts on the western leg will travel from Nebraska City to Spencer, Iowa. Tonight, we will release official Tour results for Illinois as well as the district results for western Iowa.
World Weather Inc. continues to expect “significant” rainfall over the next seven days for the Northern Plains and Canada’s Prairies, with the weather watcher saying the greatest rain will come Thursday through Friday. The Upper Midwest could also catch some rain. This would boost topsoil moisture and reduce stress for late-season crops like corn and soybeans. The moisture comes much too late for crops like spring wheat, canola or barley.
China imported 2.86 MMT of corn during July, a 214% surge from year-ago, Chinese customs data released today shows. That pushes the country’s year-to-date (YTD) purchases to 18.16 MMT, an impressive 298% gain compared to last year at this time. China’s barley imports shot 87% higher compared with last year in July to 770,000 MT, with its YTD imports of 6.42 MMT up an impressive 125% from 2020 at this point. The country’s imports of sorghum also climbed a dramatic 114% from year-ago during July to 1.11 MMT, with year-to-date imports of 5.9 MMT up 157% from last year at this time. China’s imports of wheat edged 5% lower during July to 880,000 MT, but its YTD imports of 6.25 MMT are 46% ahead of the 2020 season at this point. Customs also reports China imported 350,000 MT of pork last month, a 19% retreat from July 2020. But seven months into the year, China has brought in 2.66 MMT of pork, up 3.9% from last year at this point.
The grain export association ANEC now expects Brazil to export 6.25 MMT of soybeans this month, which is nearly a 160,000-MT increase from its forecast last week. The association expects corn exports to hit 4.53 MMT in August, a 540,000-MT increase from its outlook last week.
So far this season, Argentina’s ag ministry reports producers have sold 27.3 MMT (63%) of their 2020-21 bean crop that the Buenos Aires Grains Exchange puts at 43.5 MMT. Last year at this time, produces had sold 29.4 MMT (60%) of their 49 MMT crop, the ministry details. Corn sales have been more robust in 2020-21, with producers selling 37.2 MMT (78%) of their expected 48-MMT crop. Corn sales are running about 3 MMT ahead of last season at this point.
CORN: Tuesday’s corn losses sustained the setback from last week’s late highs, but the slide may have ended at short-term technical support. Traders may also have interpreted the results of the second day of the Pro Farmer Crop Tour as falling somewhat below expectations and pushed prices slightly higher in overnight trading as a result. News that a trade association has boosted its estimate of Brazilian corn exports may have limited gains.
SOYBEANS: Soybeans declined in overnight trading, which seemingly reflected the trade association boost to its Brazilian bean exports, as well as long liquidation in the wake of the recent advance and Tuesday’s reversal. One also has to wonder if the pod counts coming from Nebraska and Indiana on the Pro Farmer Crop Tour were higher than generally expected. The market might get a boost if another daily announcement of sales emerges from the USDA before the opening. Overnight lows came just above a big conjunction of short-to-intermediate term moving averages.
WHEAT: Nearby wheat futures posted a general overnight advance, led by the spring wheat market. Forecasts for rains over the Northern Plains may have traders anticipating delays and/or damage to the spring wheat harvest. Conversely, the rains may have traders thinking the drought is just above over and that production prospects for 2022 are improving. That would explain across-the-board losses in spring and summer 2022 wheat futures last night.
LIVESTOCK CALLS
CATTLE: Steady-higher.
HOGS: Lower.
CATTLE: Wholesale prices continued their stunning surge Tuesday, with Choice beef cutout leaping $8.26 to $338.06 per hundredweight, which is only $2.49 below its early-June peak. Given the grocery industry’s historical buying pattern, there is a chance the market will peak today, but it’s more likely that they’ll continue buying beef aggressively for Labor Day features through next Wednesday, then taper off. This week’s early cash cattle trade saw a few steers change hands at $127.00, but whether that is a harbinger of broader market action is open to question. October futures again failed to mount a serious challenge of the pivotal $130 level yesterday. Conversely, major support persists just below Tuesday’s close.
HOGS: As we suspected, Tuesday’s big morning leap in primal pork belly values, which boosted carcass values to $127.81, was not sustained through the afternoon. Carcass values ended the day $1.15 lower at $116.46. Increasing supplies commensurate with the ongoing seasonal surge in hog kills may be limiting gains at this point, but substitution demand powered by soaring beef prices should continue supporting hog/pork values as well. The fact that the preliminary Monday quote for the CME Lean Hog Index declined just 3 ticks yesterday, to $109.64 may limit pressure from the poor pork market performance yesterday afternoon.