GRAIN CALLS
Corn: 2 to 3 cents higher.
Soybeans: 9 to 12 cents higher.
Wheat: 5 to 12 cents higher.
GENERAL COMMENTS:
Spring wheat futures led overnight gains in the grain complex after the second day of a crop tour through North Dakota projected an even sharper decline in yields due to severe drought. Corn and soybean futures were also firmer amid ongoing concerns over dry conditions in the northwest Corn Belt. Nymex crude futures rose after a report showed U.S. oil supplies at the lowest levels since January 2020. The U.S. dollar index fell to its lowest level in a month.
Corn demand from China has been “very solid,” Bunge CEO Greg Heckman said in an earnings call yesterday. “The trend has been more and been up, and we think that that’s going to repeat and be sustainable.” He also said that China has increased wheat use in feed, curbing its corn and soymeal needs, but added “we think we’re kind of getting to the tail end of that.”
Brazil’s statistics agency Conab issued a warning to producers earlier this week about the threat yet another round of frost poses for corn and wheat in the country’s southern and southeastern states. Conab said moderate to severe frost Wednesday and Thursday could damage filling safrinha corn and flowering wheat in Sao Paulo and Parana, with Mato Grosso do Sul also expected to see some frost.
Russia’s state weather forecaster lowered its grain crop estimate for the country by 3 MMT to 121 MMT, citing dry weather, RIA news agency reported. That would be a 9.4% retreat from last year’s 133.5 MMT crop.
CORN: Today’s USDA export sales data for the week ended July 22 showed net corn sales reductions of 115,200 MT for 2020-21, a marketing-year low. For 2021-22, net sales of 529,300 MT were up 36% from the previous week and up 21% from the prior four-week average. Trade expectations ranged from a net reduction of 100,000 MT to 300,000 MT for 2020-21 and sales of 100,000 MT to 300,000 MT for 2021-22.
SOYBEANS: USDA today reported a net weekly soybean sales reduction of 79,300 MT for 2020-21, on the low end of expectations for -100,000 MT to 300,000 MT. For 2021-22, net sales of 312,800 MT were at the high end of expectations for 200,000 MT to 400,000 MT. Soymeal net sales of 87,300 MT for 2020-21 were up 28% from the previous week but down 40% from the prior four-week average. Soybean oil net sales totaled 2,200 MT for 2020-21. USDA announced a daily soybean sale of 132,000 MT to unknown destinations for 2021-22 delivery.
WHEAT: On Day 2 of the Wheat Quality Council’s spring wheat tour through North Dakota and neighboring areas, scouts calculated an average yield estimate of 24.6 bu. per acre, down sharply from 40.8 bu. per acre in 2019 and the five-year average of 42.4 bu. per acre. USDA’s weekly export sales report showed net wheat sales of 515,200 MT for 2021-22, up 9% from the previous week and up 46% from the prior four-week average. The sales, which included a 128,900 MT purchase by China, were on the high end of trade expectations.
CATTLE: Steady-firm
HOGS: Mixed-weaker
CATTLE: Cattle future may find support from continued strength in beef prices. Live steers in five top U.S. feedlot areas averaged $122.78 per hundredweight yesterday, up from last week’s average of $120.77, USDA data showed. Choice cutout values yesterday averaged $273.16, up $3.43 from Tuesday and the sixth consecutive daily gain since the market hit a 3 1/2-month low last week. Meatpackers slaughtered an estimated 358,000 head of cattle so far this week, up 2.6% from the same period last week and up 0.8% from the same period a year ago. USDA reported net weekly U.S. beef sales of 22,500 MT, down 11% from the previous week but up 28% from the prior four-week average.
HOGS: Lean hogs will trade with an expanded $4.50 daily limit today after the October contract fell the initial $3.00 limit yesterday. Carcass cutout values yesterday averaged $124.97, up $1.48 on the day and the highest since June 17, according to USDA data. Carcasses on national direct markets yesterday averaged $103.80, down $1.74. Meatpackers slaughtered an estimated 1.41 million head of hogs so far this week, up 0.6% from the same period last week and up 0.1% from the same period a year ago. USDA reported net weekly pork sales of 38,500 MT, up 57% from the previous week and up 43% from the prior four-week average. China bought 807 MT of U.S. pork and took shipment of 5,700 MT during the week ended July 22.
USDA confirmed African Swine Fever (ASF) in samples from pigs in the Dominican Republic. Pork products from the Dominican Republic are already banned from entering the U.S. due to restrictions linked to classical swine fever.
China’s cabinet said it would step-up emergency adjustments of its pork reserves and take steps to stabilize hog prices. The country is still working to rebuild its hog herd after ASF and to control the virus.