Ahead of the Open | August 27, 2021

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GRAIN CALLS

Corn: Steady to 4 cents lower.

Soybeans: 3 to 10 cents lower.

Wheat: 2 cents lower to 3 cents higher.

GENERAL COMMENTS: Corn and soybean futures fell overnight as rain fell in Iowa and other areas of the Upper Midwest this week. Wheat futures were mixed. Malaysian palm oil futures fell nearly 1.5%, while Nymex crude futures gained over 2%.

USDA reported daily sales of 129,000 MT of soybeans to China and 150,000 MT of corn to Colombia – both for 2021-22 delivery.

Much of the Midwest received rain over the past day, with the heaviest amounts centered over Minnesota and Iowa, World Weather Inc. reported. More rain is expected today, with flash flood watches in effect for much of southern Minnesota and northern Iowa. Heat advisories are also in effect for the southern half of Illinois and the southeastern two-thirds of Missouri. Traders are watching Tropical Storm Ida, which is expected to strengthen into a major hurricane and move into southeastern Louisiana by Sunday, bringing significant rain and wind to the Delta early next week.

The Buenos Aires Grain Exchange in its latest weekly update maintained its 19 million metric-ton (MMT) wheat crop estimate. “The lack of rain aggravates the water deficit situation and causes a decrease in crop growth and delays in plant development, delaying the transition to reproductive stages of later sown fields,” the exchange said in its report.

French farmers advanced their wheat harvest another five percentage points ahead the week ended Aug. 23, with harvest now estimated to be 96% complete, according to the country’s ag ministry. Rain continues to slow efforts. In the northern Haute-de-France region, a major producing area, harvest was only 89% complete as of Aug. 23.

Russia has set a grain export tax of $39.40 per metric ton for Sept. 1-7, which is a $7.70 (24%) leap from the week prior. This is the highest formula-based duty since the week of July 7-13. Export prices for Russian wheat have also been tearing higher.

Ukraine has exported 7 MMT of grain in the first two months of its marketing year, which is 600,000 MT ahead of last season at this point. That amount includes 3.4 MMT of wheat, 2.4 MMT of barley and 1.2 MMT of corn. Ukraine’s government expects the country to ship 56 MMT of grain in 2021-22, including 20.7 MMT of wheat, 30.7 MMT of corn and 4.1 MMT of barley.

 

CORN: December futures held within this week’s ranges overnight, between Wednesday’s high at $5.55 3/4 and Monday’s low at $5.29 ½, and are poised to close higher on the week, after settling last week at $5.37.

SOYBEANS: November soybeans held within this week’s range overnight and are on track to end higher than last week’s close of $12.90 3/4.

WHEAT: December SRW futures climbed 13 3/4 cents yesterday to $7.39 1/4, the highest closing price in a week, and are up from last week’s settlement of $7.28 1/4.

 

LIVESTOCK CALLS

CATTLE: Steady-weaker.

HOGS: Steady-mixed.

CATTLE: Futures may face further pressure from growing beliefs the market has established a short-term top. Cash market fundamentals have weakened this week, with wholesale beef prices slipping from 15-month highs as retailer demand fades. Choice beef cutout values rose 38 cents yesterday to $347.27. Live steers in five top feedlot regions yesterday averaged $128.61, up from an average of $125.47 last week. Slaughter through yesterday totaled an estimated 463,000 head, down 3.3% from the same period last week and down 1.9% from the same period a year ago, USDA reported. October live cattle could still close higher for the seventh consecutive week, after settling last Friday at $129.05.

HOGS: October lean hogs are poised to close lower on the week on weakening cash fundamentals and expectations for greater supplies this fall. The most-recent CME Lean Hog Index fell $1.55 to $104.79, the lowest since April. While pork carcass cutout values bounced back from a recent slump, gaining $6.16 yesterday to $116.40, values are still well below the June peak at $134.94. U.S. meatpackers slaughtered an estimated 1.86 million head of hogs through yesterday, down 2.1% from the same point last week and down 2.5% from the same period in 2020. October lean hog futures fell 85 cents to $87.90 yesterday and are down from $88.625 at the end of last week.

 

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