Ahead of the Open | July 21, 2021
GRAIN CALLS
Corn: 4 to 6 cents higher
Soybeans: Steady to 4 cents higher
Wheat: 2 cents lower to 8 cents higher
GENERAL COMMENTS:
Corn futures rose near a three-week high overnight and soybean futures also gained amid ongoing concern over dry conditions in parts of the Midwest. HRW and SRW also rose and remain near two-month highs reached yesterday, while spring wheat futures softened. Nymex crude oil futures were up nearly 2%, while the U.S. dollar index extended a week-long climb to reach its highest level since early April.
A high-pressure ridge may build into the central U.S. July 24-30 before slowly shifting to the west, according to World Weather Inc. That will likely lead to net drying for at least part of the western Corn Belt and much of the Northern Plains. Some showers along the northern part of the ridge should provide some partial relief to eastern areas of the Northern Plains, the weather watcher adds.
Agriculture and Agri-Food Canada (AAFC) in its WASDE-equivalent report raised its all-wheat yield forecast, with the 2021-22 crop now estimated at 31.428 MMT. “Downward pressure on yields is possible as drought persists in most of the Prairies,” AAFC wrote. USDA earlier this month trimmed its Canadian wheat crop forecast by 500,000 MT to 31.50 MMT. Both are well above private crop estimates.
Brazil will likely export 9.437 MMT of soybeans during July, a 482,000-MT increase from a previous outlook, according to a forecast by ANEC, an association of grain exporters. ANEC expects the country to ship 3.195 MMT of corn this month, which is up 160,000 MT from its previous outlook.
Argentine producers have sold 25.1 MMT of soybeans so far this marketing year, which represented a 660,400-MT advance for the week ending July 14, the ag ministry said today. That represents 57.7% of this year’s 43.5 MMT crop, as measured by the Buenos Aires Grains Exchange.
Russia exported around 49 MMT of grain in 2020-21, Deputy Agriculture Minister Oksana Lut told reporters. That includes 37.6 MMT of wheat, according to Lut, who says that will allow Russia to maintain its position as the world’s biggest wheat exporter.
China will auction another 23,488 MT of corn imported from Ukraine on July 23, the country’s grain stockpiler Sinograin said today. These auctions that started June 11 were initially met with strong demand, but the sales percentages have dived this month, with next to no grain selling at its latest July 16 auction.
CORN: December futures reached $5.72 1/4 overnight, the highest intraday price since July 2 and inching closer to filling a 21-cent gap stemming from a post-July 4 selloff. “Concern remains for production potentials the next ten days to two weeks in Montana, much of the Dakotas, and the northwestern part of the Corn Belt,” World Weather said in a report yesterday. USDA said 65% of the U.S. corn crop was rated “good” or “excellent” as of Sunday, unchanged from the previous week.
WHEAT: HRW and SRW futures are on track for a sixth consecutive daily gain as U.S. harvest pressure winds down and demand prospects improve amid crop concerns in other top wheat countries. Spring wheat remains near contract highs with severe dryness in the Northern Plains slashing the harvest outlook. September SRW wheat rose to $7.10 overnight after yesterday touching $7.18, the highest intraday price since $7.32 1/4 on May 13.
CATTLE: Steady-weaker
HOGS: Steady-firmer
CATTLE: Cash markets have delivered modest activity so far this week, with light sales in Iowa at $122, compared to $125 at auctions last week. The Nebraska live market also saw some sales earlier this week at $125, in line with the upper end of trade ranging from $123 to $125 for the state last week. Today’s online auction could provide some additional cash market insight. Choice boxed beef values fell $1.61 yesterday to $264.88, a 3 1/2-month low.
HOGS: August lean hog futures rose yesterday but remain at a discount to the CME lean hog index, which climbed to $112.26, its highest since June 28. Cash hog bids jumped yesterday, with the national average rising $3.60 to $109.84, while pork cutout values slipped $1.51 though pork movement picked up to 340.36 loads. Packer profit margins have strengthened notably over the past week, with HedgersEdge.com pegging them at $16.10 a head as of Tuesday.
