10:30 a.m. Market Snapshot | Aug. 13, 2021

Wheat producers: Increase 2021- and 2022-crop sales… Wheat futures surged to new contract highs following USDA’s bullish report data on Thursday. The outlook is bullish and the technical breakout opens additional upside potential, but it also creates a selling opportunity. We advise wheat hedgers and cash-only marketers to sell another 10% of 2021-crop to get to 70% priced. Spring wheat producers should adjust sales according to your production prospects. We also advise all wheat producers to sell another 10% of expected 2022-crop production for harvest delivery next year to get to 20% forward-priced.

Corn futures are 1 to 3 cents higher at midsession.

• December futures are on track to gain over 3% on the week after USDA’s Crop Production Report yesterday showed a bigger-than-expected cut in the U.S. corn harvest estimate.
• U.S. farmers will harvest an estimated 14.75 billion bu. of corn this fall, USDA said in its first survey-based forecast of the crop. That’s down from the previous, trendline-based projection, at 15.165 billion bushels.
• The estimated nationwide average yield, at 174.6 bu. per acre, is down 4.9 bu. from USDA’s trendline.
• USDA increased old-crop corn carryover a bit more than expected to 1.117 billion bushels. It cut 190 million bu. from its July new-crop carryover projection, dropping it to 1.242 billion bu., which was smaller than expected.
• December corn rose as high as $5.82 and is up from $5.56 1/2 at the end of last week.

Soy complex futures are higher, with soybeans up 14 to 16 cents in September contracts forward. Soyoil is up over 100 points and soymeal is up 50 cents to $1.70.

• November soybeans are poised to close at the highest levels since late July following USDA’s smaller-than-expected crop estimate.
• USDA estimated U.S. soybean production 4.339 billion bu., below average trade expectations and down 1.5% from the July projection. USDA estimated the national average soybean yield at 50.0 bu. per acre, 0.8 bu. below trendline.
• USDA’s old-crop carryover projection of 160 million bu. was a bit higher than expected, but its steady new-crop carryover projection of 155 million bu. was a bit lighter than expected.
• USDA announced more daily soybean export sales this morning — the seventh straight day of soybean sales. The latest sales were 326,000 MT of soybeans to unknown destinations and 126,000 MT to China for 2021-22 and 200 MT to unknown for 2020-21.

Wheat futures are sharply higher. Spring wheat futures are 13 to 16 cents higher and leading gains. SRW wheat is up 11 to 14 cents, while HRW wheat is up 8 cents.

• SRW reached the highest levels since February 2013, based on nearby contracts, and HRW futures climbed to the highest since May 2014 following USDA’s unexpectedly large cuts to global harvest and supply projections.
• Lower production in France, Russia and the U.S. prompted USDA to cut its forecast for global wheat ending stocks in 2021-22 by 4.3%, to 279.1 MMT, a five-year low.
• USDA also lowered estimated all U.S. wheat production 2.8% to 1.697 billion bu., a 19-year low.
• French farmers harvested 72% of their soft wheat crop as of Aug. 9, up from 66% the week prior, as late-season rains continued to slow efforts and raise concern over quality, the French farm office reported.

Live cattle futures are slightly lower. Feeder cattle are narrowly mixed.

• Live cattle are modestly lower but supported by firm cash fundamentals. Feeder futures face pressure from stronger corn prices.
• Choice beef cutout values rose another $7.13 yesterday to $317.93 per hundredweight, the highest since June 21.
• Live slaughter-ready steers in five top feedlot regions averaged $122.35, down from last week’s average of $123.83 but still up over 20% from year-ago levels.
• Meatpackers slaughtered an estimated 462,000 head of cattle this week through yesterday, down 3.8% from the same period last week and down 0.6% from the same period in 2020.

Lean hog futures are lower, led by deferred contracts.

• August lean hog futures expire today, handing the October futures contract lead-month status with a major discount to the CME Lean Hog index. The index was $110.19 for the two days ending Aug. 11.
• Carcass cutout values yesterday tumbled $4.59 to $119.37, the lowest since July 14, according to USDA.
• National direct carcasses rose 51 cents to an average of $100.12, up from $99.15 at the end of last week.
• Meatpackers slaughtered 1.878 million head of hogs this week through yesterday, up 3.4% from the same period last week and up 0.3% from the same period in 2020.
• USDA, in its Supply and Demand report, cut estimated 2021 U.S. pork exports by 1.9% and cut projected 2022 exports 3.3%.