Ahead of the Open | September 23, 2021
GRAIN CALLS
Corn: 1 to 2 cents lower.
Soybeans: 2 to 4 cents higher.
Wheat: 2 to 4 cents higher.
GENERAL COMMENTS: Corn futures are expected to open slightly lower following disappointing USDA export sales. Soybeans and wheat posted modest gains overnight and are expected to open firmer this morning. Malaysian palm oil futures surged nearly 3%, extending a recent rally to reach the highest price in almost two weeks. Nymex crude oil futures fell slightly, while the U.S. dollar index weaker.
USDA reported a daily sale of 138,403 metric tons (MT) of corn for delivery to Guatemala during the 2021-22 marketing year.
A dry fall and winter expected from Canada’s Prairies through the U.S. Great Plains and southwest into the southern Rocky Mountain region could cause low levels on the Missouri River, potentially impeding barge traffic, according to a World Weather Inc. report.
China's agriculture ministry lowered its sow herd inventory target, as the world's top pork producer aims to ensure supply and stabilize prices, Reuters reported. In an interim plan for hog breeding capacity, the Ministry of Agriculture and Rural Affairs said the target for the sow herd was now around 41 million head for 2021-2025 and should be no lower than 37 million head.
China’s National Development and Reform Commission (NDRC) said it would take action to stabilize supply and prices for fertilizer, including the release of potash fertilizer reserves. The state planner also said it would ensure imports reach farmers.
The Argentine government yesterday said it would appeal a ruling by the U.S. Court of International Trade that denied its challenge to high duties on imports of biodiesel from Argentina.
Algeria’s state grains agency may have purchased between 300,000 MT and 500,000 MT of durum wheat in a tender, reportedly from Mexico and Canada.
CORN: USDA reported net U.S. corn sales of 373,000 MT for the week ended Sept. 16, at the lower end of expectations for sales between 300,000 and 800,000 MT. December futures fell as low as $5.22 1/2 overnight. Chart levels to watch include $5.37 1/2, last week’s high, and $4.97 1/2, a five-month low hit Sept. 10, as well as the 200-day moving average around $5.09 1/2.
SOYBEANS: Net weekly U.S. sales totaled 902,900 MT, led by China, which bought 624,200 MT. Expectations ranged from 500,000 MT to 1.1 MMT. November soybeans rose as high as $12.90 1/4 overnight. Chart levels to watch include $12.57 1/2, a three-month low reached Sept. 21, and the 200-day moving average at around $12.72.
WHEAT: Net weekly wheat sales totaled 355,900 MT, down 42% from the previous week but up 1% from the average for the previous four weeks. Expectations ranged from 250,000 to 600,000 MT. Exports of 507,900 MT were down 1% from the previous week but up 2% from the prior four-week average. December SRW futures overnight rose as high as $7.13 1/4, the highest intraday price since $7.16 on Sept. 17. Chart levels to watch include this week’s low at $6.86 and the 100-day moving average around $7.01.
LIVESTOCK CALLS
CATTLE: Steady-weak
HOGS: Steady-firmer
CATTLE: Continued weakness in cash cattle and boxed beef prices may pressure futures. Choice cutout values fell $3.54 yesterday to an average of $307.83, the lowest since Aug. 10. USDA reported an average live steer price at $123.85, down 3 cents from last week's average. This week’s kill, at 363,000 head through yesterday, was up 2.3% from last week and up 0.6% from year-ago. USDA reported net U.S. beef sales of 15,800 MT for the week ended Sept. 16, up 3% from the previous week and up 17% from the previous four-week average. Tomorrow’s USDA Cattle on Feed Report is expected to show continued contraction in U.S. feedlot inventories. Based on a Reuters survey, August feedlot placements fell around 1% from year-ago levels. Chart levels in December live cattle include last week’s high at $130.45 and last week’s low at $125.675.
HOGS: Strength in wholesale pork and export sales may boost futures. Pork cutout values rose $4.16 yesterday to an average of $106.92, the highest since Sept. 9. The latest CME lean hog index fell to $92.65. Net U.S. pork sales for the week ended Sept. 16 totaled 32,600 MT, up 29% from the previous week and up 12% from the prior four-week average. Meatpackers slaughtered 1.394 million head of hogs through yesterday, 1.8% below the same period last week and 3.9% under year-ago levels.
USDA’s Sept. 24 quarterly Hogs and Pigs Report is expected to reflect continued shrinkage of the U.S. herd. Total hog inventory as of Sept. 1 is expected to be down 1.7% from a year earlier, based on a Reuters survey of analysts. Chart levels to watch in December futures include last week’s high of $75.375 and last week’s low at $71.275, also a seven-month low for the contract.
