Ahead of the Open | July 7, 2021
GRAIN CALLS
Corn: 8 cents higher to 8 cents lower.
Soybeans: 14 to 18 cents higher.
Wheat: unchanged to 8 cents higher.
GENERAL COMMENTS:
Brazil will likely export 7.64 million metric tons (MMT) of soybeans during July, forecasts the association of grain exporters Anec. That would be roughly a 25% retreat from June, with focus shifting to some degree to corn. Anec expects Brazil to export 2.37 MMT of corn this month, up from shipments of just 89,213 MT during June.
Chinese corn production is likely to surge in 2021-22, cooling the country’s demand for imports of the grain. Record-high domestic prices are expected to fuel a surge in corn plantings at the expense of soybeans, sorghum and small grains. The China-based ag consultancy JCI has called for a 6.2% (14.9-MMT) rise in corn production to around 253.9 MMT.
Russia’s ag ministry reports preliminary data shows the country exported 47.8 MMT of grain during the 2020-21 marketing year that ended July 1, a 12.7% increase from last season. Wheat exports jumped 10.0% from year-ago to 37.2 MMT.
In overnight demand news, Jordan issued a new tender to buy 120,000 MT of wheat. Algeria tendered to buy a nominal 50,000 MT of milling wheat. Japan’s ag ministry said it will seek 80,000 MT of feed wheat and 100,000 MT of feed barley via a simultaneous buy and sell auction.
CORN: Futures remain under pressure amid forecasts for rainfall and moderate temperatures across much of the Midwest this week. December futures fell as low as $5.29 3/4 overnight, and chart levels to watch include last week’s low at $5.17 1/2. USDA’s weekly crop progress report yesterday rated the U.S. corn crop 64% in “good” or “excellent” condition as of Sunday, unchanged from the previous week and in-line with analysts’ expectations. 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 rating inched 0.4 point higher to 367.4 points. For the beginning of July, the corn CCI rating is 7.5 points below the five-year average.
WHEAT: Sagging crop ratings continued to boost spring wheat futures, while accelerating harvest pressure weighs on HRW and SRW markets. USDA reported the winter wheat crop was 45% harvested as of Sunday, up from 33% the previous week but trailing the average of 53% for the previous five years. USDA rated the spring wheat crop 16% “good” to “excellent,” down from 20% the previous week and about three percentage points worse than expected. The spring wheat CCI plunged another 15.8 points over the past week to 253.6 points, 108.3 points below the five-year average for this date.
CATTLE: Steady-mixed
HOGS: Mixed
CATTLE: Cash prices softened over the past week, but feedlot operators appear to be getting current with their marketings, given a slight decline in weights of slaughter-ready animals. Live steers averaged $122.37 in five top U.S. cattle markets yesterday based on negotiated cash sales, down from an average of $123.89 last week. Choice cutout values averaged $286.88, up $1.24 from the end of last week but still near two-month lows. Traders will watch to see if Choice beef is able to build on Tuesday’s gain, signaling a product market low is in the works. Feeder cattle may find further upside impetus from weaker corn prices.
