Ahead of the Open | August 5, 2021
GRAIN CALLS
Corn: Steady to 1 cent higher.
Soybeans: 2 to 5 cents lower.
Wheat: Steady to 7 cents higher.
GENERAL COMMENTS:
Corn and wheat futures traded higher and soybean futures were lower in a subdued overnight session. Malaysian palm oil futures dropped following sharp gains the previous day. Nymex crude oil futures and the U.S. dollar index are near unchanged this morning.
Global food prices eased 1.2% in July, according to the Food and Agriculture Organization of the United Nations’ (FAO) food price index, which edged 1.5 points lower for the month to an average reading of 123.0 points. That’s still up 29.1 points (31%) from July 2020. This was the index’s second consecutive drop after it had climbed for 12 months.
In overnight demand news, Jordan’s state grain buyer tendered to buy 120,000 MT of milling wheat that can be sourced from optional origins. A South Korean flour mill tendered to buy 135,100 MT of milling wheat, including 50,000 MT from the U.S. Turkey’s state grain board confirmed final purchases of 245,000 MT of wheat in an international tender, after making provisional purchases of 395,000 MT Monday. Algeria’s state grains agency bought around 300,000 MT of optional origin milling wheat in an international tender, with some traders saying the total was closer to 360,000 MT.
CORN: Net weekly corn sales of 68,200 MT for 2020-21 were down from the previous week but up “noticeably” from the prior four-week average. For 2021-22, net sales of 830,200 MT went primarily to Mexico (238,800 MT), Japan (210,700 MT) and “unknown destinations” (101,700 MT). Trade expectations ranged from -150,000 to 200,000 MT for 2020-21 and 200,000 to 600,000 MT for 2021-22. China had net cancellations of 112,506 MT of old-crop corn purchases, but took delivery of 909,500 MT during the week.
WHEAT: Net wheat sales fell short of trade expectations at 308,300 MT, down 40% from the previous week and down 28% from the previous four-week average. Sales expectations ranged from 350,000 to 600,000 MT.
CATTLE: Steady-firmer
HOGS: Steady-firm
CATTLE: Futures should retain support from recent strength in wholesale beef prices. Choice cutout values rose $2.90 yesterday to $288.74, the 11th consecutive daily increase. Live steers yesterday averaged $124.61, up from last week’s average of $121.68. USDA today reported net weekly beef sales of 15,000 MT, down 33% from the previous week and 26% from the previous four-week average.
HOGS: Firm cash fundamentals continue to underpin hog futures, though wholesale pork markets dipped yesterday. Pork cutout values yesterday fell $4.68 to $122.99 as all cuts, with the exception of bellies, declined. Carcasses on national direct markets averaged $102.66, up $2.26 from Tuesday. August futures were at a $2-plus discount to the CME lean hog index. Net weekly pork sales totaled 38,800 MT, up 1% from the previous week and up 32% from the prior four-week average. Purchases included 18,300 MT by China. Pork export to China totaled 4,900 MT.