10:30 a.m. Market Snapshot | July 14, 2021

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Corn futures have switched solidly to rally mode with futures up 10 to 12 cents.  

Soybeans have shot 19 to 29 cents higher, with nearbys leading gains. Soymeal futures are also soaring, with soyoil posting solid gains.

  • An active weather pattern is likely for the Corn Belt over the next several days, with several systems expected to bring welcome moisture to western areas of the region. But traders are looking ahead to the forecast for hot, dry weather into the key development month of August.
  • World Weather reports Canada’s Prairies, North Dakota and northern Minnesota face 10 days of very stressful weather, which will accelerate crop yield losses for canola, soybeans and other unirrigated crops. Stress is also expected expand into South Dakota, Nebraska and parts of Iowa and Wisconsin.
  • And this week’s rains may be less welcome for some producers in eastern and southern areas of the Midwest that have seen an abundance of rain. Soybean condition ratings for Illinois dived seven percentage points the week ending July 11 to 56% “good” to “excellent.”
  • Brazil’s soybean exports will likely total 8.955 MMT in July, forecasts the association of grain exports known as Anec. That’s up more than 1.3 MMT from its forecast last week. The forecast reminds that Brazil will dominate the export market until U.S. harvest begins.

SRW wheat futures are in catchup mode and leading gains, with futures up 16 to 18 cents. HRW and HRS wheat are 7 to 10 cents higher. September spring wheat set a new contract high of $8.78 1/4 earlier today.

  • USDA’s much smaller than expected spring wheat and durum wheat production estimates continue to provide underlying support for the market and keep attention on the weather.
  • Showers are expected for South Dakota and Minnesota today, but more will be needed given prolonged drought. Montana, North Dakota, northern Minnesota and the Canadian Prairies are not expected to see any relief. And heat is expected to build in northern and western areas of the U.S. and across the Canadian Prairies over the next 10 days.  
  • Egypt’s state grain buyer purchased 180,000 MT of wheat from Romania in an international tender.
  • Germany’s all wheat crop will likely total 22.80 MMT this season, a 3.2% increase from the year prior, the country’s association of farm cooperatives said. That’s down a bit from its 22.98 MMT crop estimate in June as a recent heat wave stressed crops in eastern areas of the country.
  • China’s summer wheat crop climbed 2% from 2020 levels to 134 MMT on a rise in both planted acreage and yields, the country’s National Statistics Bureau said. However, heavy rains leading up to and during harvest in some major producing provinces caused some quality damage.

Live cattle futures have turned mixed after a firmer start. Feeder cattle futures are under moderate to heavy pressure.

  • Live cattle futures showed mild followthrough buying early this morning after Tuesday’s strong gains, but some weakness has crept into far-deferred contracts.
  • August live cattle are now in line with last week’s average cash cattle price of $122.16, but so far have not been able to push above yesterday’s high.
  • Initial cash cattle trade this week has been at steady to firmer prices, though activity has been light.
  • Feeder cattle futures are being pressured by the strength in corn. The firmer tone in live cattle helped limit selling early, but that support has faded.

Lean hog futures are choppy to firmer this morning, with deferred contracts backing off early highs.

  • July hogs are holding near unchanged as the contract nears its Thursday expiration.
  • Hog futures opened firmer on followthrough buying after a strong close on Tuesday. But buyer interest is limited, despite a strengthening cash market.
  • The average national direct cash hog price firmed $4.56 yesterday to $112.30. The cash hog index has started to firm again and is up 57 cents today to $110.67.
  • The pork cutout value firmed $1.08 yesterday on strength in loins, butts and ribs, which more than offset declines in hams, bellies and picnics. Packers moved a strong 392.34 loads at the higher prices.
  • Smithfield Foods has stopped slaughtering hogs at its Smithfield, Virginia, plant. The facility has the capacity to kill about 10,000 hogs a day but has been slaughtering roughly 7,000 to 7,500 hogs daily. Industry sources doubt this will have much market impact, but slaughter capacity will be “snug” in the fall as market-ready supplies build.
 

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