Ahead of the Open | August 10, 2023

Ahead of the Open
Ahead of the Open
(Pro Farmer)

GRAIN CALLS

Corn: 1 to 3 cents higher.

Soybeans: 8 to 12 cents higher.

Wheat: SRW 2 to 4 cents higher; HRW 4 to 8 cents higher; HRS 4 to 8 cents higher.

GENERAL COMMENTS: Soybean futures extended corrective gains from the two previous days during overnight trade, while corn and wheat rebounded from Wednesday’s losses. Weekly export sales were generally supportive, though there isn’t much market focus on demand at this time. Outside markets are mixed with crude oil modestly weaker and the U.S. dollar index more than 450 points lower.

Nearly all of the Midwest will see multiple rounds of rain through Monday with a lack of heat for another week. World Weather Inc. says a drier weather pattern will occur Aug. 15-24 while temperatures begin to warm around Aug. 20 across the Midwest.

The Ukrainian navy announced a temporary “humanitarian corridor” in the Black Sea is now operational. The first ships are expected to use this corridor in the coming days. A spokesperson for the Ukrainian navy told Reuters the corridor would be used by commercial ships blocked at Ukraine’s Black Sea ports to transport grain and agricultural products.

China’s northeastern grain belt is bracing for more rains and flooding from Typhoon Khanun, as producers struggle to recover from impacts of Typhoon Doksuri. Heavy rains are expected in parts of China’s northeast that includes the provinces of Heilongjiang, Jilin and Liaoning, and the Inner Mongolia region, in the next few days. Local governments are making urgent preparations to secure agriculture production and minimize crop losses in an area that produces almost 30% of China’s grain.

Conab raised its official Brazilian corn crop estimate 2.2 MMT to a record 129.9 MMT, as safrinha production is expected to be higher than previously forecast. Conab raised its 2022-23 Brazilian corn export forecast to 50 MMT, up 2 MMT from its prior outlook. The Brazilian soybean crop estimate inched up 100,000 MT to a record 154.6 MMT. Conab kept is 2022-23 Brazilian soybean export forecast at 95.6 MMT.

Export sales for the week ended Aug. 3:

Corn: Net sales of 150,400 MT for 2022-23, up 40% from the previous week but down 47% from the four-week average. Net sales of 758,400 MT for 2023-24. Traders expected sales of 75,000 to 600,000 MT for 2022-23 and 200,000 to 600,000 MT for 2023-24.

Soybeans: Net sales of 406,600 MT for 2022-23, up sharply from the previous week and the four-week average. Net sales of 1.096 MMT for 2023-24 were primarily for China (753,000 MT) and unknown destinations (314,000 MT). Traders expected sales of 0 to 300,000 MT for 2022-23 and 300,000 MT to 1.5 MMT for 2023-24.

Wheat: Net sales of 567,600 MT for 2023-24, a marketing-year high – up 35% from the previous week and 86% above the four-week average. Traders expected sales of 200,000 to 500,000 MT for 2023-24.

 

CORN: December corn futures continue to consolidate around the recent lows, forming a bear flag on the daily chart. That makes Monday’s low at $4.89 1/4 key support, as violation of that level would confirm a downside breakout from the bear flag. Additional near-term support is at the July low at $4.81. Near-term resistance is in the $5.00 to $5.10 range.

SOYBEANS: November soybean futures traded higher again overnight after corrective gains the two previous days. Bulls still need a close above $13.15 to negate the downside breakout from the bear flag formation on Monday. Tuesday’s spike low at $12.82 1/4 is key support. Resistance is in the $13.15 to $13.25 range.

WHEAT: December SRW futures have formed a bear flag on the daily chart. A close below $6.54 1/4 would confirm a bearish breakout from the pattern and project the contract about $1.08 lower from that level. However, the contract would find additional support at $6.41 1/2 and $6.08 1/4. Near-term resistance is at $6.68 1/4.

 

LIVESTOCK CALLS

CATTLE: Choppy/higher.

HOGS: Mixed.

CATTLE: Live cattle futures are expected to open with a mostly firmer tone amid stronger expectations for cash cattle trade. While cash activity has been light thus far, traders are anticipating higher cash prices when trade eventually turns active. Meanwhile, Choice boxed beef prices firmed $1.13 on Wednesday, while Select rose $1.98 and movement totaled 125 loads for the day. While packers have struggled to push Choice beef much above the $300.00 level, there continues to be solid retailer buying just above that level, marking it as a key price floor. USDA reported net beef sales of 14,800 MT for 2023, up 19% from the previous week but down 8% from the four-week average.

HOGS: Lean hog futures are expected to open with a mixed tone. August hogs are likely to be relatively quiet and could see some price strength given their discount to the cash market. But deferred futures are expected to open lower on followthrough selling after sharp losses and a poor close on Thursday. The CME lean hog index is down another 24 cents, marking the seventh decline in the last nine days. The pork cutout value dropped $2.97 yesterday, led down by a $9.79 drop in primal bellies. USDA reported net pork sales of 22,300 MT for 2023, up 25% from the previous week and 3% from the four-week average.

 

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