Ahead of the Open | August 26, 2021

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GRAIN CALLS

Corn: 2 to 3 cents lower.

Soybeans: 6 cents higher to 5 cents lower.

Wheat: Winter wheat 5 to 8 cents higher, spring wheat 1 to 4 cents higher.

GENERAL COMMENTS: Corn and soybean futures were weaker and held in tight ranges overnight after rains fell in Illinois and other top growing areas of the Midwest. Wheat futures climbed on expectations for stronger global demand, though USDA’s latest weekly export sales data was disappointing. Malaysian palm oil futures rose about 0.6%, while Nymex crude futures fell over 1%.

Rainfall reached much of central Illinois and central Indiana overnight, with a few areas receiving over 1.3 inches, World Weather Inc. reports. East-central Iowa also received light rains, though most of the western Corn Belt was dry. Rains at this point could help crop fill out pods and kernels for some crops.

A group of six Democrats and Republicans introduced legislation yesterday aimed at increasing use of low-carbon, high-octane fuels, including ethanol, to improve vehicle efficiency and performance, as well protect the environment. The Next Generation Fuels Act of 2021 would phase in higher gasoline octane levels through greater use of low-carbon renewable fuels, starting with a 95 Research Octane Number and increasing to 98 RON. The bill would require automakers to use a test fuel that contains 20% ethanol with a minimum 95 RON octane value for new vehicle emissions and fuel economy standards starting with model year 2026 cars.

Turkey tendered to buy around 300,000 MT of milling wheat. Pakistan provisionally purchased around 160,000 MT of milling wheat in an international tender for up to 400,000 MT. South Korea’s largest animal feed maker, Nonghyup Feed Inc., bought around 135,000 MT of animal feed corn in an international tender.

 

CORN: USDA today reported net U.S. corn export sales for the week ended Aug. 19 of 6,600 metric tons (MT) for 2020-21, while sales for 2021-22 totaled 684,000 MT and included Mexico (492,000 MT) and Japan (93,000 MT) as the lead buyers. Trade expectations ranged from -100,000 to 250,000 MT for 2020-21 and 500,000 to 1 million MT (MMT) for 2021-22. USDA also reported daily sales of 100,000 MT of corn to Colombia for 2021-22. December futures held within yesterday’s ranges overnight. Chart levels to watch include yesterday’s high at $5.55 3/4, the 100-day moving average around $5.54 1/2 and Monday’s low at $5.29 1/2.

SOYBEANS: Net weekly soybean sales totaled 75,100 MT for 2020-21. For 2021-22, net sales totaled 1.75 million MT and included China (934,500 MT), unknown destinations (587,900) and Mexico (148,600 MT). Expectations ranged from -100,000 to 125,000 for 2020-21 and 1.3 MMT to 2 MMT for 2021-2022. USDA also reported new soymeal sales of 61,700 MT for 2020-21, a marketing-year low, while for 2021-22, net sales totaled 139,500 MT. For soymeal, expectations ranged from 25,000 to 350,000 for 2020-21 and 50,000 to 150,000 for 2021-22. USDA also reported daily soybean sales of 133,000 MT to China and 132,150 MT to unknown destinations for 2021-22.

WHEAT: Net weekly U.S. wheat sales totaled 116,000 MT for 2021-22, a marketing-year low and down 67% from the prior four-week average. Expectations ranged from 200,000 to 600,000 MT. However, exports of 675,800 MT were a marketing-year high and up 39% from the prior four-week average.

 

LIVESTOCK CALLS

CATTLE: Steady-weaker.

HOGS: Steady-mixed.

CATTLE: Followthrough weakness from yesterday’s declines may weigh on live cattle futures on indications wholesale beef prices have topped with retailers completing purchases ahead of the Labor Day weekend. Choice beef cutout values fell 69 cents yesterday to $346.89, the second straight daily decline after hitting a 15-month high Aug. 23. Live steers in five top feedlot regions yesterday averaged $128.80, up from last week’s average of $125.47. Live cattle bulls have a solid near-term technical advantage but need to sustain momentum this week. Market bulls' next upside price objectives include closing October live cattle above solid resistance at $135.00. Downside objectives include a gap in the daily chart between the Aug. 23 low of $129.55 and the Aug. 20 high of $129.175.

HOGS: October lean hog futures firmed 2.3% yesterday but may struggle to extend gains with wholesale pork prices sliding to two-month lows and supplies expected to expand this fall. Pork carcass cutouts values fell 77 cents yesterday to $110.24, the lowest daily price since $107.82 on June 23. Carcasses on national direct markets fell 72 cents to $96.10. The latest CME lean hog index is at $106.34, still well above futures. Meatpackers slaughtered an estimated 1.384 million head the first three days this week, down 3.0% from the same period last week and down 3.4% from the same period in 2020. Lean hog bulls and bears are on a level near-term technical playing field, with prices holding within the range of the past couple weeks. For bulls, upside objectives include closing October futures above solid chart resistance at the August high of $91.725. For bears, downside objectives include closing October below solid technical support at the August low of $83.325.

 

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Pro Farmer's Daily Advice Monitor

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