10:30 a.m. Market Snapshot | July 12, 2021

Corn futures have extended overnight gains to trade around a dime higher.

Analysts are gearing up for USDA’s updated production and carryover forecasts. Analysts polled by Reuters expect USDA to trim corn yields and incorporate its June 30 acreage estimate, resulting in a 15.115 billion bu. crop peg.
Old-crop corn carryover is expected to dip nearly 20 million bu. from June to 1.088 billion bu.; new-crop carryover is expected to climb 45 million bu. to a still-snug 1.402 billion bushels.
Analysts will also be on watch regarding how much USDA cuts Brazil’s corn crop. On average, they expect USDA to slice its crop estimate from 98.5 MMT to 92.2 MMT.
Much of the Midwest received rain over the weekend, though accumulation faded to the north and some areas missed out altogether. More rain is likely for the Midwest over the next 10 days, with the exception of the northwest part of the region that has remained dry.
USDA’s crop condition update today will provide insight as to how much rains benefitted crops.
USDA reported 993,974 MT of corn were inspected for export the week ending July 8, which was near the lower end of expectations.
China plans to add 10.85 MMT in storage capacity for its grains stockpiling program, the state-controlled Global Times reported. That reminds that the country has shifted its policies back to stockpiling and food security, which could point to continued strong imports of corn.
China’s ag ministry forecasts the country will import 22 MMT of corn in 2020-21 and 20 MMT of the grain in 2021-22.

Soybean futures have extended overnight gains to trade 15 to 22 cents higher. Soymeal futures have reversed higher and soyoil are sharply higher.

Analysts surveyed by Reuters expect USDA to trim old-crop soybean carryover just 1 million bu. to 134 million bu.; they expect USDA’s new-crop carryover to edge 7 million bu. lower to 148 million bushels.
The department’s soybean production forecast will likely edge down to 4.394 billion bu., according to analysts surveyed by Reuters.
Weekend rains once again favored central, southern and eastern areas of the Corn Belt, with northern and far western areas missing out. More precip is likely over the next 10 days, but northwestern areas of the Corn Belt that have been dry are expected to miss out. Heat is expected to build later this month for the western Belt.
The U.S. inspected 200,933 MT of soybeans for export the week ending July 8, which was in line with expectations and week-ago.
Last week there were rumors China stepped in and bought a few million metric tons of soybeans on the U.S. price break, but confirmation remains elusive.
China is likely to import 10.23 MMT of edible oils in 2020-21 forecasts the country’s ag ministry, a 900,000 MT increase from its June forecast. It maintained its forecast for China to import 100.44 MMT of the soybeans in 2020-21 and 102 MMT of the oilseed in 2021-22.

Hot, dry weather is likely over the next 10 days from the western U.S. into the Northern Plains and Canada’s Prairies, maintaining serious crop stress, according to World Weather Inc. Another heat wave is likely for the region July 22-26.
USDA will update its spring wheat crop rating this afternoon. Analysts have consistently underestimated crop damage from serious drought in the region. Last week, USDA rated just 16% of the spring wheat crop “good” to “excellent.”
At 11:00 a.m. CT, USDA is expected to estimate the all-wheat crop at 1.847 billion bu., with its first survey-based spring wheat crop estimate expected to come in around 459 million bushels. But uncertainty is high. USDA’s winter wheat estimate is expected to come in around 1.331 billion bushels.
USDA reported weekly wheat export inspections totaled 424,327 MT the week ending July 8, which was near the upper end of expectations. It also revised the previous week’s tally roughly 103,400 MT higher to 361,811 MT.
On Friday, the ag research firm SovEcon raised its wheat crop forecast by 1.4 MMT to 30.3 MMT, citing good soil moisture.

Live cattle futures are mixed with a slight downside bias. Feeder cattle are moderately to sharply lower.

Live cattle future opened mostly lower on light followthrough selling after a technical breakdown last week. But light corrective buying has surfaced in some contracts as support at last week’s lows held.
Traders will have to wait until later this morning to get the average cash cattle price from last week, but it will be higher than where August live cattle are trading.
Boxed beef values extended their price selloff last Friday, with Choice boxes down $3.38 and Select down $2.65, while movement slowed to just 109 loads on the day. With restaurants fully restocks after reopening in the spring and summer features mostly covered, packers are having to lower prices to attract retailer demand.
Feeder cattle are being pressured by the strength in the corn market. There’s little willingness to add new positions ahead of USDA’s crop reports at 11 a.m. CT in case that triggers a big reaction in the corn market.

Hog futures are trading moderately to sharply higher in midmorning price action.

July lean hog futures are being supported by strength in the cash market. Deferred contracts are firmer as traders narrow their discounts to the cash index.
The average national direct cash hog price firmed $2.04 last Friday to a weighted average of $111.86.
Packer margins are mildly negative, but strength in the product market is keeping packers from cutting deep in the red. The pork cutout value slipped 45 cents last Friday, but remains strong overall at an average of $116.44.
Reports out of China signal a resurgence in African swine fever (ASF) cases in the top hog-producing province Sichuan. Chinese farmers are reportedly culling herds before they lose hogs to the disease.
China’s ag ministry announced it will no longer require small pig farms to receive environmental approval from the government before breeding pigs. This is part of China’s ongoing effort to rebuild its hog herd from ASF.

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