Ahead of the Open | August 31, 2021
GRAIN CALLS
Corn: 3 to 6 cents lower.
Soybeans: 4 to 6 cents lower.
Wheat: Winter wheat 3 cents lower to 2 cents higher, spring wheat 4 to 10 cents lower.
GENERAL COMMENTS: Corn and soybean futures are expected to open mostly lower after two-sided trading overnight. Wheat futures traded mixed to lower overnight, with SRW falling to the lowest level in over four weeks. Malaysian palm oil futures fell about 1.8% and Nymex crude oil futures declined about 1%. The U.S. dollar index was down slightly after dropping to the lowest level in over four weeks.
CHS Global Grain & Processing Inc. said it could take up to a month before power is restored at its Louisiana grain terminal after Hurricane Ida knocked out a transmission line that powers its Myrtle Grove facility south of New Orleans. The company is working to divert export shipments scheduled through the next month to its terminal in Kalama, Washington.
Crop consultant Michael Cordonnier maintained his U.S. corn yield projection at 175.5 bu. per acre and a neutral bias, a shift from his neutral to lower bias for much of the summer. He also held his soybean yield estimate at 50 bu. per acre. Recent Midwest rains “have helped to stabilize the crops and mitigate much of the downside risk,” adding that improved moisture should benefit soybeans more than corn.
Brazil’s 2020-21 corn crop will likely total just 82 million metric tons (MMT), Cordonnier estimated, a 2-MMT cut from his previous outlook. “The latest planted safrinha corn was expected to be the worst and reports out of southern Brazil are confirming the farmer’s worst fears,” he wrote. “The yields of the late planted corn are very low, and the quality is very poor, so poor in fact, that in some cases, the grain elevator will not accept the corn.”
Ukraine farmers have nearly completed their 2021 wheat harvest, bringing in an estimated 32.52 MMT of the grain, the country’s ag ministry reported. Yesterday, the ministry estimated this year’s wheat harvest could total 32 MMT in “clean weight,” allowing for the export of 23.8 MMT of the grain in 2021-22.
China announced it will auction 111,321 MT of imported corn from the U.S. on Sept. 3 as well as 13,180 MT of corn imported from Ukraine. Demand has generally been fairly lackluster at these auctions.
Egypt bought 120,000 MT of wheat from Romania and 60,000 MT of wheat from Ukraine in an international tender on Monday. Iran’s state agency is believed to have purchased between 180,000 MT and 240,000 MT of milling wheat the past two weeks.
CORN: USDA yesterday reported 60% of U.S. corn in either “good” or “excellent” condition at the start of this week, unchanged from the previous week and meeting expectations. About 59% of the crop was dented, USDA said, 4 percentage points higher than the average at this point the previous five years. 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 improved one-half point to 355.6 points, 10.2 points below the five-year average.
SOYBEANS: USDA reported 56% of the U.S. soybean crop in “good” to “excellent” condition at the start of this week, unchanged from the previous week and matching trade expectations. About 93% of the crop was setting pods, one percentage point above the five-year average. When USDA's weekly condition ratings are plugged into our weighted CCI, the soybean crop slipped a point to 346.1 points, 12.8 points below the five-year average.
WHEAT: December SRW futures overnight fell as low as $7.17 1/4 a bushel, the lowest intraday price since $7.13 on Aug. 2. December spring wheat fell as low as $9.01 1/2, the lowest in a week. USDA reported 88% of the U.S. spring wheat crop had been harvested as of Aug. 29, above the five-year average of 77% for this time of year.
LIVESTOCK CALLS
CATTLE: Steady-mixed.
HOGS: Steady-weaker.
CATTLE: Futures are expected to face pressure from further weakness in wholesale beef prices, reflecting a slowdown in retail demand. Choice boxed beef prices fell $2.56 yesterday to $342.78 and movement was light. Values are down 1.5% from a 15-month high reached Aug. 23. Cash cattle averaged $125.74 last week, up 27 cents from the previous week. October live cattle fell 80 cents yesterday to $128.325, the lowest closing price since $128.150 on Aug. 19.
HOGS: Lean hog futures may face additional selling after a weak close yesterday, as the October contract ended lower after rising to a three-week high early in the day. Pork carcass cutout values plunged $6.87 yesterday to $109.72, the lowest since June 23, as hams fell over $16 and bellies dropped nearly $12. On national direct markets, carcasses fell $1.82 to $90.72. The latest CME Lean Hog index fell to $103.62, the lowest since $103.24 on April 15. USDA estimated yesterday’s hog slaughter at 477,000 head, compared to 437,000 a week earlier and 475,000 a year ago at this time.
