Ahead of the Open | October 5, 2021
GRAIN CALLS
Corn: 3 to 5 cents lower.
Soybeans: Steady to 2 cents higher.
Wheat: 6 to 12 cents lower.
GENERAL COMMENTS: Soybean futures finished the overnight session slightly higher after to the lowest prices in over six months. Corn futures fell as the U.S. harvest advanced, while wheat futures also fell. Malaysian palm oil futures surged to a record high, while Nymex crude oil climbed near a seven-year high. The U.S. dollar index is firmer this morning.
USDA yesterday said 59% of the corn crop and 58% of the soybean crop was in “good” or “excellent” condition as of Oct. 3. 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 crop ticked down 0.2 points to 357.0 points, while the soybean crop improved 1.9 points to 351.0 points. The CCI rating is 9.7 points below the five-year average for corn and 8.6 points below for soybeans.
Crop Consultant Michael Cordonnier maintained his U.S. corn yield estimate of 175.0 bu. per acre, with a neutral to slightly lower bias. “U.S. corn yields are quite variable which is the result of dry weather, increased disease pressures, and rapid maturity of the corn. There also appears to be lighter test weights, which could also be caused by the above-mentioned factors,” Cordonnier said in a report.
Cordonnier also kept his U.S. soybean yield estimate at 50.3 bu. per acre. “There are some surprisingly good soybean yields being reported, which illustrates once again that soybeans can respond to improved conditions late in the growing season,” he said.
The National Weather Service (NWS) projected above-normal odds for wet weather from eastern North Dakota through Wisconsin southward from Texas to Florida. Previously, NWS gave elevated odds for wet conditions in the far eastern Corn Belt as well as Minnesota and Wisconsin. This could slow harvest efforts in the Midwest and add to concerns with foliar disease in the eastern Corn Belt, though harvest is off to a quick start.
Seventy percent of the cotton crop has bolls open and may be vulnerable to late-season quality damage, including 64% of the Texas crop. Harvest advanced just two percentage points to 13% the week ended Oct. 3, compared to 19% a year ago.
CORN: USDA reported the U.S. corn harvest at 29% complete as of Oct. 3, compared to 18% last week and above the five-year average of 22% at this time of year. Progress was in line with trade expectations. Harvest is expected to advance rapidly this week, leading to hedging pressure that could limit upside in futures. December corn futures overnight fell as low as $5.35 1/4, within the range of the past week. Chart levels to watch include last week’s high and low at $5.48 1/2 and $5.24, respectively, along with the 100-day moving average around $5.48 1/2.
SOYBEANS: USDA said the soybean crop was 34% harvested as of Oct. 3, up from 16% the previous week and up from the five-year average of 26%. Overnight, November soybeans fell as low as $12.31, the lowest intraday price since $11.84 on March 31, before modestly rebounding. December soybean meal fell as low as $321.40, the lowest in nearly a year.
WHEAT: USDA reported 47% of the winter wheat crop was planted as of Oct.3, up from 34% the previous week and slightly above the 46% five-year average for this period. Planting progress was slightly short of trade expectations for about 49% seeded. December SRW futures overnight fell as low as $7.45, below yesterday’s low. Chart levels to watch include yesterday’s high at $7.63 1/2, the contract’s highest price since Aug. 17, and the 40-day moving average around $7.25 1/2.
LIVESTOCK CALLS
CATTLE: Steady-mixed
HOGS: Steady-firm
CATTLE: Cattle futures posted sharp gains to start the week, but further price upside may be limited with wholesale beef in an extended slump. Choice boxed beef fell $3.18 yesterday to an average of $289.18, the lowest since $285.84 on Aug. 3. Movement totaled 103 loads. Steady-weaker cash trade is likely this week, with meatpackers unwilling to pay up and retail demand soft. Live steers in five top feedlot areas averaged $122.56 last week, down $1.08 from the previous week and the fifth straight weekly decline. December live cattle yesterday closed above the 200-day moving average at $127.70. Chart levels to watch in December futures include last week’s high at $128.95 and last week’s low at $125.00.
HOGS: Futures dropped sharply yesterday in a correction from last week’s rally to two-month highs. Recent strength in wholesale pork and an apparent bottoming in the CME lean hog index may limit further price declines. The lean hog index is up 66 cents, the fifth increase in the past six days. Pork carcass cutout values fell 99 cents yesterday to $112.40, while national direct market carcasses fell 91 cents to $72.10, USDA reported. Chart levels to watch in December lean hogs include last week’s high at $85.675 and the 100-day moving average around $81.45.
