Ahead of the Open | August 2, 2022
GRAIN CALLS
Corn: 8 to 10 cents lower.
Soybeans: 15 to 16 cents lower.
Wheat: 18 to 20 cents lower.
GENERAL COMMENTS: Soybean futures extended Monday’s declines in overnight trade and corn and wheat also fell after weekly USDA crop ratings exceeded expectations. Malaysian palm oil futures sank over 5% more for a second consecutive session after Indonesia raised its overseas volumes quota. Front-month crude oil futures rose slightly from closing at a six-month low Monday. U.S. stock index futures signal a lower open, while the U.S. dollar index is up around 200 points.
The U.S. Plains and a part of the western Midwest face a limited rainfall pattern and bouts of hot temperatures over the week ahead, World Weather Inc. said. Crop moisture stress will be “most serious in the northwestern Corn Belt today and from there across much of the northern Plains and into Canada's southwestern and south-central Prairies,” the forecaster said. These areas “will not likely see much change in the coming 10 days, although next week's westward shift in the ridge of high pressure could allow a little rain into a part of the western Corn Belt.”
Crop Consultant Dr. Michael Cordonnier cut his corn and soybean yield estimates, citing forecasts for heat and dryness across the central U.S. that will reduce soil moisture that’s already lacking in some areas. He now estimates yields at 174 bu. per acre for corn and 50.5 bu. per acre for soybeans, down 1 bu. and 0.5 bu., respectively, from last week. Cordonnier has a neutral to lower bias toward both yields.
Turkey expects roughly one grain ship to leave Ukrainian ports each day as long as an agreement that ensures safe passage holds, a senior Turkish official said today. “The plan is for a ship to leave... every day,” the senior Turkish official told Reuters. “If nothing goes wrong, exports will be made via one ship a day for a while.” The first ship carrying 26,527 MT of corn to Lebanon was expected to anchor at the Joint Coordination Center (JCC) in Istanbul Tuesday night and be inspected on Wednesday.
Indonesia lowered its crude palm oil reference price to $872.27 per MT, effective August 1-15, a senior economic ministry official said. The reference price would place crude palm oil export duty for the first half of August at $33 per MT, while export levy is waived until the end of August. The July reference price was at $ 1,615.83 per metric ton.
Japan is seeking 122,103 MT of wheat in its weekly tender. South Korea tendered to buy 50,000 MT each of milling wheat from the U.S. and Australia. Tunisia tendered to buy 100,000 MT of soft wheat and 50,000 MT of feed barley – both optional origin. The Philippines tendered to buy 150,000 MT each of wheat and feed barley – both optional origin.
CORN: USDA late Monday reported 61% of the U.S. corn crop in “good” or “excellent” condition as of Sunday, unchanged from the previous week and one percentage point above trade expectations. When USDA’s weekly condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop dropped 1.3 points to 355.8, despite the unchanged good/excellent national ratings, as both Iowa and Nebraska declined slightly more than one point each. The corn CCI rating is now 11.2 points below the five-year average.
December corn futures overnight fell as low as $5.98, about two cents above the 10-day moving average, after dropping 10 1/4 cents Monday to $6.09 3/4.
SOYBEANS: USDA reported 60% of the soybean crop in good-to-excellent condition as of Sunday, an unexpected improvement from 59% a week earlier. Analysts expected a drop to 58%. When USDA’s weekly ratings are plugged into the weighted Pro Farmer CCI, the soybean crop improved 3.1 points to 353.9, still 2.7 points below average.
November soybeans overnight fell as low as $13.77 1/4, the lowest intraday price since July 27, after tumbling 62 1/2 cents Monday.
WHEAT: USDA reported 70% of the spring wheat crop in good-to-excellent condition as of Sunday, up from 68% a week earlier and above analyst expectations for 67%. Based on the Pro Farmer CCI, the spring wheat crop improved 2.9 points to 375.4, though that was slightly below ratings for this point in the growing season for 2018, 2019 and 2020.
September SRW wheat overnight fell as low as $7.79, the lowest intraday price in a week, after dropping 7 1/2 cents Monday.
LIVESTOCK CALLS
CATTLE: Steady-weaker
HOGS: Steady-firmer
HOGS: Lean hog futures may gain support from a continuing rally in cash fundamentals and followthrough from a late upswing Monday. While the national direct cash hog price dropped 94 cents, the CME lean hog index is up another 45 cents to $121.87 (as of July 29), near a 14-month high. As long as cash fundamentals remain supportive, downside will be limited for hog futures, especially the lead August contract. Pork cutout values rose 36 cents to $127.70 on strong movement of nearly 307 loads. October lean hogs fell 40 cents to $96.825.
