10:30 a.m. Market Snapshot | Aug. 23, 2021

Corn futures are 4 to 5 cents lower at midsession, with the December contract falling near a six-week low.

• December futures extended last week’s slump, edging past Friday’s low and dropping to $5.29 1/2, the lowest intraday price since $5.27 1/2 on July 13.
• Midwest weather is generally favorable for crops. Timely rain fell on many of the driest areas in the western Corn Belt during the weekend, likely inducing “at least some improvements” in crop yield potentials, World Weather Inc. said.
• Still, “coverage of significant rain was not widespread and rain was minimal from east-central South Dakota to southwestern Minnesota to east-central Iowa to east-central and northeastern Nebraska,” World Weather said.
• Following the conclusion of last week’s Pro Farmer Midwest Crop Tour, we estimated the 2021 U.S. corn crop at 15.116 billion bu. and average nationwide yield at 177.0 bu. per acre. Both figures are higher USDA’s current harvest and average yield estimates, at 14.75 billon bu. and 174.6 bu. per acre, respectively.
• USDA today reported a sale of 458,600 MT of U.S. corn for delivery to Mexico during the 2021-22 marketing year.
• Also today, USDA today reported 724,784 MT of corn was inspected for export during the week ending Aug. 19, down from 781,528 MT the previous week and within trade expectations.

Soy complex futures were mixed, with soybeans fading from overnight gains, soyoil over 3% higher and soybean meal lower. Most soybean futures contracts are up 4 to 6 cents.

• Soybeans climbed in a technical recovery from last week’s slide to six-week lows, with some spillover support from a rally of nearly 6% in crude oil futures.
• Midwest weather looks mostly favorable for late development in the soybean crop. Much of Iowa, the eastern Dakotas and southern Minnesota had rain over the weekend, with some areas of central Iowa receiving over 1.5 inch. Rainfall was lighter in eastern South Dakota.
• Following the Pro Farmer Crop Tour, we estimated the U.S. soybean crop at 4.436 billion bu. on a national average yield of 51.2 bu. per acre. USDA projects soybean production at 4.339 billion bu. and average yield at 50 bu. per acre.
• USDA today reported 214,061 MT of soybeans were inspected for export during the week ending Aug. 19, down from 277,686 MT the previous week and within trade expectations for 100,000 to 350,000 MT.
• November soybeans fell as low as $12.86 1/2 overnight, above Friday’s low at $12.77 1/4, which was the lowest intraday price since June 28.

HRW and SRW wheat futures are 5 to 6 cents higher, while spring wheat futures are steady to up 2 cents.

• Winter wheat futures found support from strength in crude oil and a softer tone in the U.S. dollar today, while forecasts for rain in the Northern Plains this week weighed on spring wheat futures.
• Rainfall is expected over the next week in the Northern Plains, “which will further improve soil moisture and reduce crop stress,” World Weather said today. A cooler than normal temperature bias will also continue in most of the region which will keep evaporation rates low.
• “Additional rain will be needed due to the significant moisture deficits earlier in the summer; however, conditions are much more improved than a couple of weeks ago,” World Weather added.
• The consultancy IKAR reported Russian wheat with 12.5% protein loaded from Black Sea ports for supply in September climbed $8 from the previous week by week’s end to $295 per MT free on board. The consultancy SovEcon reported an even stronger, $13 rise to $299 per metric ton.
• HRW and SRW technicals eroded after December SRW lost 46 cents and December HRW lost 39 1/4 cents last week. Both contracts today were holding within Friday’s range.

Live cattle and feeder cattle futures are posting strong gains, mostly above 2%.

• October live cattle gapped higher and surged near the daily $3 limit on continued strength in beef markets and lower than expected USDA Cattle on Feed numbers.
• In its Cattle on Feed Report Friday, USDA estimated 1.739 million head of cattle were placed in feedlots for fattening during July, down 8.1% from the same month in 2020, USDA reported. Feedlot placements were expected to decline about 7.9% year-over-year, based on the average analyst estimate.
• Cattle of feed as of Aug. 1 totaled 11.07 million head, down 1.8% from a year earlier and in-line with analyst expectations.
• Choice cutout values on Friday averaged $345.06, up 6.2% for the week and the highest since May 2020. Slaughter-ready steers averaged $125.48, up 2.1% from $122.84 at the end of the previous week.
• Meatpackers slaughtered an estimated 665,000 head of cattle last week, up 4.6% from the previous week and up 2.2% from the same week in 2020. This year’s slaughter to date is running 4.2% ahead of last year's levels.

Lean hog futures are slightly higher in most contracts.  

• Hog futures are seeing some spillover support from rallying cattle and crude oil prices, offsetting a soft pork market fundamentals last week.
• Carcass cutout values averaged $119.26 at the end of last week, down 5.4% from $125.68 a week earlier, USDA reported. National direct carcasses averaged $96.40, down from $97.97 a week earlier.
• Futures are gaining despite a recent slide in the CME lean hog index, which last week fell to the lowest levels since early May.
• Meatpackers slaughtered 2.452 million head of hogs last week, up 1.9% from the previous week but down 6.6% from the same week in 2020. This year’s slaughter to date is still running 1.4% below last year’s levels.