Ahead of the Open | October 12, 2021

GRAIN CALLS

Corn: 2 to 3 cents lower.

Soybeans: 4 to 6 cents lower.

Wheat: Steady to 6 cents higher.

GENERAL COMMENTS: Soybean futures extended their price slump to the lowest levels in over six months ahead of USDA’s Crop Production Report that’s expected show an increase in the crop estimate. Corn fell while wheat was mostly firmer. Malaysian palm oil futures were down over 2.0%, Nymex crude oil futures were lower but still near seven-year highs. The U.S. dollar index was slightly firmer.

USDA reported a daily sale of 165,000 metric tons of corn for delivery to Mexico during the 2021-22 marketing year.

In its Crop Production and Supply and Demand reports today, USDA is expected to slightly lower its estimates for the U.S. corn crop and average yield and increase its estimates for the soybean crop. USDA is expected to raise its 2021-22 ending stocks forecasts for corn and soybeans and cut carryover for wheat. Also today, USDA will update its weekly harvest progress and crop condition ratings.

China lowered its 2021-22 corn crop estimate by 850,000 MT, or 0.3%, to 271 MMT in its monthly China Agriculture Supply and Demand Estimates report, reflecting heavy rains since September in northern China that delayed harvest and compromised crop quality.

Brazil’s 2021-22 soybean crop will likely climb 5.1% from last year to a record 144 MMT, according to Crop Consultant Dr. Michael Cordonnier. He expects an increase in acreage to drive the increase. As of Oct. 7, 10% of the crop had been planted, which was a six-point advance from the week prior, according to AgRural.

Argentina will prioritize international sales of corn to ensure crops already harvested are exported before sales can be registered for next season’s crop that’s currently being planted, according to an ag ministry source, Reuters reported.

Russian wheat export prices rose for the 13th week in a row. According to the IKAR consultancy, Russian wheat with 12.5% protein loading from Black Sea ports for supply the second half of October climbed $3 by late last week to $310 per metric ton, free on board.

France’s farm ministry lowered its soft wheat crop estimate by 900,000 MT, or 2.6%, to 35.2 MMT, citing untimely rain. That would still be 21% jump from last year’s crop.

CORN: USDA is expected to cut is U.S. corn crop estimate by about 0.2%, to 14.973 billion bu., based on a Reuters survey of analysts. The average U.S. yield is expected to be cut 0.2% to 176 bu. per acre. Separately, USDA probably will show a large jump in harvest progress over the past week. As of Oct. 2, 29% of the U.S. corn crop was harvested, above the average for the previous five years of 22%.

December futures overnight fell as low as $5.30 1/2.

SOYBEANS: USDA is expected to increase its estimate of the U.S. soybean harvest by 0.9%, to 4.415 billion bu., which would be the second largest crop on record. The average U.S. yield is expected to rise 1.0%, to 51.1 bu. per acre. Rain in the Midwest this week will slow harvest that had been running ahead of schedule. As of Oct. 3, the crop was 34% harvested, compared to the five-year average of 26%.

November soybeans overnight fell as low as $12.21 1/2, the lowest intraday price since $11.84 March 31, as the market technical standing turns increasingly bearish. The psychologically important $12.00 level appears to be the next downside target.

WHEAT: USDA’s projected wheat supplies at the end of the 2021-22 marketing year are expected to drop about 6.3% to 576 million bu., down from USDA’s current estimate of 615 million bu. USDA is also expected to reduce its world wheat ending stocks forecast by about 0.8%, to 280.82 MMT. Separately, USDA’s crop progress report likely will show well over half of winter wheat planting complete. As of Oct. 3, the crop was 47% planted. December SRW wheat overnight rose as high as $7.35 1/2.

LIVESTOCK CALLS

CATTLE: Steady-firm

HOGS: Steady-weak

CATTLE: Futures may find support from a firmer tone in cash cattle markets, though wholesale beef remains weak. Live slaughter-ready steers last week averaged $122.96, up 40 cents from the previous week and the first weekly increase in six. Feeder steers at traded $2 to $4 higher yesterday amid moderate to good demand at the first day of an Oklahoma City auction. But boxed beef prices must stabilize before futures gain sustained buying interest. Choice boxed beef values fell $2.15 yesterday to $281.12, the lowest since $281.00 on Aug. 2. Chart levels to watch in December live cattle include last week’s high at $130.60, which is just under the 40-day moving average around $130.70, along with the 100-day moving average around $131.00

HOGS: Futures may be facing followthrough from a recent technical breakdown on the daily chart, as well as mixed signals from the cash markets. December lean hog futures yesterday fell to $80.175, the lowest closing price since $76.80 on Sept. 24. Carcasses on national direct markets early yesterday averaged $68.37, down 89 cents from Friday. The CME lean hog index is at $91.60 today, down another 35 cents and near a six-month low of $91.47 reached in late September. Pork cutout values rose $1.02 yesterday to $108.01. Chart levels to watch in December lean hogs include yesterday’s low at $79.425 and the 20-day moving average around $78.95.