Ahead of the Open | August 30, 2021
GRAIN CALLS
Corn: 2 to 6 cents lower.
Soybeans: 1 to 10 cents lower.
Wheat: 3 to 9 cents higher.
GENERAL COMMENTS: Corn and soybean futures fell overnight after rain fell across much of the western and northern parts of the Midwest, though fresh export demand from China may underpin soybeans. Wheat futures rose amid ongoing expectations for tighter global supplies. Crude oil futures were up slightly after reaching the highest levels in over three weeks, while the U.S. dollar index was down slightly after falling to a two-week low.
USDA reported a daily sale of 256,000 metric tons (MT) of soybeans to China for delivery in the 2021-22 marketing year. So far in August, USDA has reported nearly 3.5 million MT (MMT) of soybean sales to China or “unknown” destinations.
Rains fell in the eastern Dakotas, eastern Nebraska, northern Iowa and most of Minnesota over the weekend, with totals near or above 3 inches in a few locations, according to World Weather Inc. Hurricane Ida hit southeastern Louisiana over the weekend, bringing wind gusts up to 128 miles per hour and rains of up to 20 inches. The storm probably damaged sugarcane in eastern Louisiana, but damage to cotton, corn, soybeans and rice was expected to be limited. Moisture from Tropical Storm Nora, which hit west-central Mexico during the weekend, could reach the southwestern U.S. early this week and the northern U.S. Plains and upper Midwest late this week.
Russian wheat export prices continue to climb. Russian wheat with 12.5% protein loading from Black Sea ports for supply in late September or early October was $299 per metric ton free on board (FOB) at last week’s close, up $4 from the previous week, according to ag consultancy IKAR. That would be the seventh week in a row of rising prices. SovEcon reported wheat prices fell $1 to $298 per metric ton.
Ukraine’s farm ministry expects the country to export 60.68 million metric tons (MMT) of grain in 2021-22, including 23.8 MMT of wheat. A rebound in production is expected to bolster shipments, and exports are off to a strong start. The ministry’s preliminary data shows the 2021 wheat crop at 32 MMT and the corn crop at 37.1 MMT, helping push grain production to an all-time high of 80.6 MMT.
China’s state planner today said it will continue to buy pork for its state reserves to support weak prices. Panic selling of heavy animals earlier this summer led to a collapse in Chinese hog prices. The country bought more than 50,000 MT of meat during July.
Pakistan tendered to buy around 550,000 MT of wheat over the weekend. Taiwan’s MFIG purchasing group issued an international tender to buy up to 65,000 MT of animal feed corn from the U.S., Brazil, Argentina or South Africa.
CORN: December futures overnight rose to $5.58 a bushel, the highest intraday price since $5.63 1/2 Aug. 19. The most-active contract gained 3.1% last week.
SOYBEANS: November soybeans overnight traded within last week’s range from an Aug. 23 low of $12.86 1/2 and an Aug. 25 high of $13.39 1/2. The most-active contract gained 2.5% last week.
WHEAT: December SRW futures overnight held within last week’s range between an Aug. 25 low of $7.18 1/2 and an Aug. 27 high of $7.45. December SRW futures rose 4 1/4 cents last week, while December HRW futures gained 8 1/4 cents.
LIVESTOCK CALLS
CATTLE: Steady-weaker.
HOGS: Steady-firmer.
CATTLE: Boxed beef prices weakened three of the past four days, fueling beliefs the market has peaked after retailers finished Labor Day purchases. Choice beef dropped $1.93 to $354.54 per hundredweight on movement of 69 loads. The reversal in beef prices led to a pullback in live cattle futures after the market pushed to new contract highs to kick off the week. Retail demand will likely moderate now that the summer grilling season is winding down, though demand overall is expected to remain robust.
HOGS: Lean hog futures may find followthrough buying after the October contract rallied $2.825 Friday to $90.725 per hundredweight, the highest closing price since $91.375 on Aug. 3. For the week, October hogs gained $2.10. A late-week rebound in wholesale pork prices may also support futures as carcass cutout values rose 19 cents Friday to $116.59 on movement of over 275 loads. Values are still below the June peak at $134.94. USDA estimated last week’s kill at 2.444 million head, near steady with the week prior but down 7.9% from year-ago levels.
