GRAIN CALLS
Corn: 5 to 7 cents lower.
Soybeans: 3 to 7 cents lower.
Wheat: 1 cent higher to 7 cents lower.
GENERAL COMMENTS:
Corn, soybean and wheat futures were mostly lower and traded in narrow ranges overnight after rain fell across much of the Midwest over the weekend. Markets are waiting for USDA’s Aug. 12 Crop Production and Supply and Demand Reports. A sell-off in crude oil may weigh on other commodities today, with Nymex futures down nearly 4% amid escalating concern the Delta Covid variant may curb global demand. Malaysian palm oil fell 1.5%.
USDA earlier today reported a daily soybean sale of 104,000 metric tons (MT) to “unknown destinations” for the 2021-22 marketing year. That follows a soybean sale of 131,000 MT to China for 2021-22 and a 300,000 MT soybean sale to unknown destinations for 2021-22, both announced late last week.
Rain over the weekend was lighter than expected for southeastern South Dakota, southwestern Minnesota, northwest and eastern Iowa, northeastern Nebraska and northern Illinois, World Weather Inc. reported. But rain topped expectation in central Wisconsin and northeastern South Dakota. Erratic showers are expected for central and eastern areas of the Midwest this week, with net drying expected in areas that miss out. “Crop moisture will be slowly reduced and areas that failed to get rain this weekend those that continue a little dry this week will have a rising potential crop moisture stress,” World Weather reports. No excessive heat is expected.
China imported 8.67 million metric tons (MMT) of soybeans during July, a 14.1% decline from 10.09 MMT for the same month in 2020, the country’s General Administration of Customs reported. The drop reflected weaker hog sector profitability and increased substitution of wheat in feed rations. For the first seven months of 2021, China imported 57.63 MMT of soybeans, a 4.5% increase from the same period last year.
Customs data also showed China imported 854,000 MT of meat in July, a 14.4% drop from year-ago. So far this year, China imported 5.93 MMT of meat, a 3.1% increase from last year at this point.
Russian wheat export prices surged 5.1% over the past week, with prices for wheat with 12.5% protein loading from Black Sea ports for August supply estimated in the $267 to $268 per MT area at last week’s close, consultancies SovEcon and IKAR both reported. Russian wheat prices have rallied “substantially” in recent weeks, but the price gains are expected to moderate amid increased competition from the European Union and Ukraine, SovEcon said.
Sanderson Farms, the third-largest U.S. chicken producer, announced its $4.53 billion sale to Continental Grain. Combining Sanderson with Wayne Farms LLC, a poultry company owned by Continental, would form a new competitor to top producer Tyson Foods, accounting for about 15% of U.S. chicken production, according to data from Watt Poultry USA.
CORN: USDA’s weekly condition ratings later today will provide some indication whether recent Midwest rainfall aided the crop. A week ago, USDA rated 62% of the U.S. corn crop in “good” or “excellent” condition as of Aug. 1. USDA’s Aug. 12 Crop Production Report is expected to show slightly smaller harvest prospects compared with USDA’s July projection. U.S. farmers are expected to harvest 15.004 billion bu. of corn this year, based on the average analyst estimate in a Reuters survey.
SOYBEANS: Futures are starting the week on a weak note. A week ago, USDA reported 60% of the U.S. soybean was in “good” or “excellent” condition as of Aug. 1. U.S. farmers are expected to harvest 4.375 billion bu. of soybeans this fall, based on the average analyst estimate in a Reuters survey.
WHEAT: HRW and SRW futures fell overnight after ending last week near three-month highs, boosted by expectations that weather problems in top producers around the world will curtail global production. USDA’s Supply and Demand Report is expected to convey a tightening U.S. and global supply picture. USDA is expected to trim U.S. wheat ending stocks for 2021-22 to 644 million bushels, based on the average analyst estimate in a Reuters survey. That would be down from USDA’s current estimate of 665 million bushels.
CATTLE: Steady-firmer
HOGS: Steady-firmer
CATTLE: Live and feeder cattle futures may find support from strength in wholesale beef prices. Choice boxed beef values climbed another $3.68 on Friday, to $296.26, marking the 12th consecutive day of gains. Grocers typically wrap up feature purchases for the first weekend of the month 10 days prior, signaling the surge in beef prices could slow or reverse around Aug. 25. The rally has padded already strong packer profit margins and could prompt producers to dig in and push for higher prices. Cash action was steady to a bit higher last week.
HOGS: Hog futures rallied late Friday after earlier sinking to the lowest levels in nearly four weeks when wholesale pork prices posted a sharp mid-week drop. Carcass cutout values rose 55 cents on Friday to $123.67, up from $123.12 at the end of last week, USDA reported. The jump in cutout values appeared to have stabilized hog futures, and cutouts will be one key to market direction this week.