Ahead of the Open | September 24, 2021
GRAIN CALLS
Corn: 1 to 2 cents lower.
Soybeans: 1 to 3 cents lower.
Wheat: 1 to 4 cents lower.
GENERAL COMMENTS: Corn and soybeans futures were slightly weaker overnight amid expectations for stepped-up harvest in much of the Midwest. Wheat futures were lower but still poised for a second straight weekly gain. Malaysian palm oil futures fell slightly but still posted a weekly gain of 4.3%, its biggest in six weeks. Nymex crude oil futures eased after rising to the highest price in nearly eight weeks.
Warm, dry weather favored crop maturation and harvesting across much of the country the week ended Sept. 21, according to yesterday’s National Drought Monitor. Rains for the Upper Midwest and eastern areas of the High Plains likely arrived too late to benefit summer crops. Reduced topsoil moisture for newly planted winter grain is concerning, “Some of the most significant short-term dryness, aggravated by late-season heat, existed across the southern Plains,” the report said.
Argentine farmers started planting their 2021-22 corn crop early this month after welcome rains, with the Buenos Aires Grain Exchange reporting 8.5% of the crop had been planted, but it noted that “new rains are needed to make sure that all expected early season corn gets sown.”
Russia set its wheat export tax at $53.50 per MT for the week of Sept. 29-Oct. 5, a $2.60 jump from the week prior and the highest the formula-based tariff has been since it took effect at the start of June.
Nearly three months into the 2021-22 marketing year, Ukraine has exported 12.8 MMT of grain, a 1.5-MMT rise from last season at this point. That tally includes 7.7 MMT of wheat, 3.4 MMT of barley and 1.4 MMT of corn.
Despite recent political tensions, China has been Australia’s top buyer of wheat in 2021-22, accounting for 2 MMT of the country’s 5 MMT in sales, according to trade sources and an analyst cited by Reuters. There was talk China was shopping for U.S. wheat yesterday.
CORN: December corn futures overnight fell as low as $5.25 and is down from $5.27 1/4 at the end of last week. Prices have rebounded from a brief drop under $5.00 to a five-month low earlier in September, but the upside may be subdued by accelerating harvest and sluggish exports. Chart levels to watch include $5.37 1/2, last week’s high, and $5.39 1/2, the 40-day moving average, plus the 200-day moving average around $5.10 3/4.
SOYBEANS: November soybeans overnight reached $12.90, just under yesterday’s high, before fading. The contract settled at $12.84 at the end of last week. Chart levels to watch include $12.57 1/2, a three-month low reached Sept. 21, along with the 200-day moving average at around $12.73 1/4 and the 40-day moving average at $13.16 1/2.
WHEAT: December SRW futures overnight rose as high as $7.19 3/4, the highest intraday price since $7.24 on Sept. 8, but turned lower at the end of overnight trade. The most-active contract is still up from last week’s close at $7.08 3/4. Chart levels to watch include the 40-day moving average around $67.24 3/4 and the 100-day moving average around $7.01.
LIVESTOCK CALLS
CATTLE: Steady-weak
HOGS: Steady-mixed
CATTLE: December live cattle fell 7.5 cents yesterday $128.625 but are up from last week’s close at $127.525. Futures likely will struggle to generate much upside if wholesale beef extends its recent weakness. Choice cutout values fell $2.23 yesterday to an average of $305.60, the lowest since $305.32 on Aug. 10. Cash cattle trade picked up yesterday at prices ranging from $122 to $124, steady to lower compared with last week. Chart levels to watch in December live cattle include last week’s high at $130.45 and last week’s low at $125.675.
USDA’s Cattle on Feed Report, which will be released after today’s close, is expected to show continued contraction in U.S. feedlot inventories. Based on a Reuters survey, August feedlot placements likely fell around 1.0% from year-ago levels, while feedlot inventories as of Sept. 1 are expected to be down 2.1%.
HOGS: December lean hogs rose $3.125 yesterday to $76.50, the highest closing price since Sept. 9. The market’s rebound from seven-month lows last week suggests a near-term bottom has been established, even as cash fundamentals provide mixed signals. Pork cutout values yesterday fell $2.63 to $104.29, down 1.1% from the end of last week, while carcasses on national direct markets dropped 63 cents to $76.53. The latest CME lean hog index fell to $91.89, the lowest since $91.74 in mid-March. Chart levels to watch in December futures include the 20-day moving average around $79.55 and last week’s close at $75.05.
USDA quarterly Hogs and Pigs Report today is expected to show a continued shrinkage of the U.S. herd. Total hog inventories as of Sept. 1 are expected to be down 1.7% from a year earlier, based on a Reuters survey. The number of animals kept for breeding is expected to be down 1.1%.
