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

Corn futures are 7 to 8 cents higher, reversing early losses. July corn has shot 65 cents higher in a squeeze ahead of tomorrow’s contract expiration. December corn futures continue to hold above the 100-day moving average after Friday’s drop below that level of support.

• USDA maintained its weather-adjusted trendline yield projection and incorporated its higher June 30 harvested acreage estimate yesterday, resulting in a bigger corn crop projection of 15.165 billion bushels.
• The bigger crop helped lift new-crop carryover to 1.432 billion bu.; old-crop carryover dipped to 1.082 billion bushels.
• USDA also lowered its Brazilian corn crop estimate by 5.5 MMT, dropping it to 93 MMT. That’s still well above many in the private industry.
• Yesterday, USDA raised the amount of corn rated “good” to “excellent” (G/E) a percentage point to 65%, signaling recent rains have benefitted the crop as a whole.
• But when USDA's weekly condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop slipped 0.6 point to 366.8 points, which is 6.3 points under the five-year average.
• Crop Consultant Dr. Michael Cordonnier maintained his U.S. corn yield projection of 175.5 bu. per acre, and his bias is neutral to lower going forward. He says while rains in northern locations were a bit disappointing, the timing of the moisture and cooler temperatures benefitted crops.
• Chinese customs data shows the country imported 15.3 MMT of corn the first half of 2021, a 318.5% surge from year-ago.

After some light pressure overnight, soybeans are again working higher, with futures up 9 to 16 cents and old-crop leading gains. August soybeans have pushed back above the 100-day moving average. Soymeal and soyoil futures are also on the rise.

• USDA made no change to its June carryover projections for soybeans, leaving them at 135 million bu. for 2020-21 and 155 million bu. for 2021-22.
• USDA maintained its soybean trendline yield projection and paired with its slightly lower June 30 acreage estimate held its crop forecast steady at 4.405 billion bushels.
• USDA maintained its 59% G/E rating for the U.S. soybean crop the week ending July 11, which was a bit disappointing given expectations for a one-point rise. Rains were enough to stabilize the crop.
• Our CCI held steady for soybeans at 351.9 points, which is 7.8 points under the five-year average.
• Cordonnier made no change to his 50 bu. per acre soybean yield projection for the U.S., but his bias remains steady to lower and he commented that more rain is needed. With crop ratings well under the long-term average, he says reaching trendline yields could be a challenge.
• China imported 10.72 MMT of soybeans during June, an 11.6% jump from May and just 3.9% shy of last June’s record imports. Last month’s imports were the third highest monthly tally on record. Six months into 2021, China’s bean imports are up 8.7% from year-ago at 48.96 MMT.

Spring wheat futures faced some profit-taking overnight, but futures have since turned back up with most contracts up 6 to 10 cents. Winter wheat futures have also reversed higher, with most contracts up 2 to 4 cents. September SRW wheat futures are trading back above the 200-day moving average.

• Yesterday, USDA’s initial spring wheat and durum wheat production estimates came in well short of market expectations at 345 million bu. and 37 million bu., respectively. The numbers drove home the severity of drought on the Northern Plains and resulted in an all-wheat crop estimate that was 101 million bu. short of expectations.
• The smaller crop also resulted in smaller 2021-22 carryover than the market expected at 665 million bushels.
• USDA rated 16% of the U.S. spring wheat crop G/E as of July 11, steady with the week prior and in line with market expectations. But the amount of spring wheat rated “poor” or “very poor” jumped five percentage points to 55%.
• Winter what harvest advanced 14 percentage points over the past week to 59% complete, which is still six percentage points behind the five-year average harvest pace.

• Halfway through 2021, China has imported 5.37 MMT of wheat, up a sharp 60.1% from last year at this point.
• The ag markets research firm SovEcon lowered its Russian wheat crop estimate by 2.3 MMT to 82.3 MMT, citing low starting yields. Yesterday, USDA lowered its 2021-22 Russian wheat crop estimate by 1 MMT to 85 MMT.

Live cattle futures are firmer, led by strong gains in the lead August contract. Feeder cattle futures are choppy.

• Traders are narrowing the discount August live cattle hold to the cash market. Even with today’s gains, the lead contract is still nearly $1 below last week’s average cash cattle price of $122.16.
• Traders are waiting to form cash cattle opinions for the week. Showlists this week are higher in Nebraska and Colorado, but lower in Texas and in Kansas.
• Choice boxed beef prices continue to fall, dropping $3.59 yesterday, though Select values firmed $1.36 and packers sold a decent 123 loads of product on the day.
• Feeder cattle futures are mildly weaker this morning given the strength in corn. Premiums feeders hold to the cash index are also limiting buyer interest.  

July hog futures are lower, while deferred contracts are moderately to sharply higher.

• July lean hog futures are being pressured by a sharp drop in cash hog prices on Monday. The average national direct price fell $4.12 for the day.
• July hogs hold around a $2 premium to the cash index, which is quoted up 36 cents today, with contract expiration on Thursday.
• Deferred lean hog futures are showing strong followthrough buying after big gains and a high-range close on Monday.
• Traders are narrowing the discounts deferred hogs hold to the cash index, signaling they sense the sharp price pullback during June was overdone.