Ahead of the Open | September 1, 2021
GRAIN CALLS
Corn: 7 to 9 cents lower.
Soybeans: 2 cents lower to 3 cents higher.
Wheat: 3 cents lower to 3 cents higher.
GENERAL COMMENTS: Corn and soybean futures weakened overnight on benign Midwest crop weather and concerns damage from Hurricane Ida may disrupt exports at the U.S. Gulf. Wheat futures were mixed. Malaysian palm oil futures fell nearly 2%, the third consecutive daily decline, following reports of a drop in exports in August, while Dalian hog futures plunged over 5%.
Midwest corn and soybeans begin September under mostly favorable conditions and few apparent threats as the crop moves into the final weeks of the growing season. Much of the region received beneficial rains in late August. An “unusually cool” air mass is expected to shift into the central U.S. around Sept. 10-12.
Hurricane Ida’s winds “did some serious damage,” causing power outages and making a “direct hit” on some large grain export elevators near New Orleans, Ken Erickson, senior vice president of agribusiness with IHS Market, told AgriTalk yesterday. One damaged Cargill facility “is about 8% to 10% of center Gulf capacity,” while the CHS Myrtle Grove facility that’s without power has about 7% to 8% share of the area’s capacity. The U.S. is entering a critical time for exports, especially soybeans, and recovery will need to be swift to prevent any further erosion to the U.S. export program this year.
Ida’s aftermath on the U.S. fuel supply may be similar the gasoline price spikes following Hurricane Katrina in 2005 and could weigh on consumer spending and GDP, some observers say. The energy market's reaction has been muted so far.
USDA is expected to report the U.S. crushed 165.2 million bu. (4.957 million short tons) of soybeans during July, according to analysts polled by Reuters. That would be up from June’s disappointing crush of 161.7 million bu. but well under last July’s 184.5 million-bu. crush. Those polled expect soyoil stocks to end July at 2.132 billion lbs., a 32-million-lb. increase from June 30 and up a marginal 9 million lbs. from the end of July. Meanwhile, analysts surveyed by Bloomberg expect USDA’s monthly Grain Crushings report to show 448.8 million bu. of corn were consumed for ethanol use during July, which would be a 5.8% increase from year-ago.
Brazil likely exported 5.785 million metric tons (MMT) of soybeans during August, according to Anec, the country’s association of grain exporters. That’s a decline of 201,000 MT from its forecast last week. The association also lowered its corn export projection for the month by 393,000 MT, to 4.344 MMT.
CORN: December corn held within the previous day’s range overnight after dropping yesterday to $5.25 1/4, the lowest intraday price since $5.14 1/4 on July 12.
SOYBEANS: November soybeans overnight fell to $12.82 1/4, the lowest intraday price since $12.77 1/4 on Aug. 20, the low for last month. A break below the August low may set up a test of the June low at $12.40 1/2.
WHEAT: December SRW futures traded above yesterday’s slide to a four-week low at $7.07. Chart levels to watch include the 40-day moving average around $7.14 1/2.
LIVESTOCK CALLS
CATTLE: Steady-mixed.
HOGS: Steady-weaker.
CATTLE: Futures may face followthrough pressure from yesterday’s slump to the lowest levels in over five weeks and continued weakness in wholesale beef prices as retail demand fades. Choice boxed beef prices fell $2.56 yesterday to $342.78 and movement was light. Values are down from a 15-month high reached Aug. 23. October live cattle fell 80 cents yesterday to $128.325, the lowest closing price since $128.150 on Aug. 19.
HOGS: Cash fundamentals are mixed to bearish as the wholesale pork market continues to erode. Pork carcass cutout values fell 7 cents yesterday to $109.01, the lowest since June 23 and driven by continued weakness in hams and bellies. On national direct markets, carcasses rose $2.23 to $99.25. The latest CME Lean Hog index fell to $103.49, the lowest since $103.24 on April 15 but still almost $15 above October futures. October lean hogs fell for a second day yesterday after reaching a three-week high at $91.425 on Aug. 30.
