10:30 a.m. Market Snapshot | July 15, 2021

Corn futures continue to post losses of around 2 cents in most contracts.

• An active weather pattern continues for the Midwest, replenishing soil moisture ahead of pollination. But some eastern and southern areas of the Corn Belt are excessively wet, while far northern and far western areas have missed out.
• Heat and dryness are expected in the northern and western Corn Belt over the next 10 days. Conditions will be favorable elsewhere in the Corn Belt.
• The National Weather Service’s forecast calls for heat to linger through August. Precip maps for next month are dry for the far western Corn Belt, wet for the far eastern Belt and inconclusive in between.
• Weekly ethanol data released late yesterday was surprisingly strong considering the reporting period included the July 4 holiday. EIA data shows ethanol production slowed just 26,000 barrels per day to 1.04 million bpd the week ending July 9, with ethanol stocks sliding 15,000 barrels to 21.13 million barrels.
• The U.S. reported corn export sales of 138,800 MT for 2020-21 and 133,122 MT for 2021-22 the week ending July 8. The relatively light sales were in line with expectations.
• Wednesday’s high at $5.62 3/4 is a key level for December corn futures today. A push above it would likely attract more chart-based buying, but failure to clear that level could lead to a pullback after three days of strong gains to start the week. 

Soybeans have slightly extended overnight losses to trade 2 to 7 cents lower.  Soymeal is under pressure and soyoil futures are split with nearbys slightly firmer and deferred months posting light losses.

• An active weather pattern has brought moisture to much of the Corn Belt this week. Hot, dry weather is expected for northern and western areas of the Corn Belt over the weekend and through next week, with the key development month of August just two weeks away.
• The National Weather Service’s forecast for August gives elevated odds for warm weather across northern and western areas of the Midwest, with equal chances for normal, above-normal and below-normal temperatures for the rest of the Midwest.
• Conditions are most likely to be dry across the western half of the Dakotas and Nebraska in August. Wet weather is favored for the far eastern Corn Belt. There are equal chances for the various precip forecasts in between.
• Weekly soybean export sales of 21,700 MT for 2020-21 and 290,800 MT 2021-22 were in line with expectations.

HRS wheat futures have rallied 13 to 15 cents, pulling SRW wheat 10 to 12 cents higher and HRW wheat 6 to 7 cents higher. September HRS wheat futures hit a new contract high of $8.91 ½ earlier in today’s session.

• Hot, dry weather is expected for the Northern U.S. Plains and Canadian Prairies the latter half of July, with temperatures well over the 100-degree mark possible this weekend and for nearly a full week thereafter, reports World Weather Inc.
• With crop ratings already at their lowest since 1988 and long-term drought entrenched across the region, this is a dire forecast. That signals USDA’s already low spring wheat crop estimate is likely to fall going forward.
• Today’s National Drought Monitor showed spotty improvement in western North Dakota with a mix of improvement and degradation in South Dakota. Drought worsened Minnesota, Wyoming, Montana and the Pacific Northwest.
• Wheat export sales totaled 424,700 MT the week ending July 8, which was near the upper end of expectations.
• IKAR cut its forecast for Russia’s wheat crop by 2 MMT to 81.5 MMT, citing hot, dry weather in Russia’s southern regions.
• Strategie Grains lifted its 2021-22 EU soft wheat crop forecast by 1.9 MMT from June to 133 MMT, up 14.2 MMT from the previous season. The consultancy also increased its export forecast for the EU by 2.4 MMT, with 31 MMT of the grain now expected to be shipped.
• The Rosario Grains Exchange raised its Argentine wheat crop estimate by 500,000 MT, pushing its crop estimate to 20.5 MMT, citing favorable weather for planting. The country is a major exporter to Brazil.

Live cattle futures are choppy with to higher. Feeder cattle are firmer.

• Price action is quiet in the live cattle market this morning as traders wait for more cash cattle trade to develop.
• Cash prices softened a little yesterday from earlier in the week, but the bulk of this week’s trade has been at roughly steady prices compared with last week.
• Weekly beef export sales were disappointing at 9,300 MT, which was down 61% from the previous week and 44% from the four-week average. China bought a net 1,600 MT of U.S. beef during the week. Exports of 15,500 MT were down 13% from the previous week and 15% from the four-week average. China was the destination for 3,300 MT of U.S. beef.
• Feeder cattle futures are being supported by the weakness in the corn market, though the generally weaker tone in live cattle is limiting buyer interest.

Lean hog futures are mixed with summer-month contracts mildly weaker and farther deferred months firmer.

• July hogs are quiet ahead of their noon CT expiration. The contract is around $1 above the cash index, but it won’t settle against it until July 19, and the index is trending higher.
• August hogs are trading around $6.50 below the cash index as that contract gets set to take over lead-month status. Cash prices usually weaken in late summer, but that discount appears a little steep given strength in the cash market.
• The average national direct cash hog price rose $1.49 yesterday. The cash index is up 33 cents at $111.00.
• Weekly pork export sales were disappointing at 10,600 MT, down 76% from the previous week and 68% from the four-week average. USDA reported net sales reductions of 1,300 MT for China. Exports of 25,200 MT were a marketing-year low. China took shipment of 4,900 MT of U.S. pork for the week.
• Chinese pork demand is expected to weaken the second half of the year, but there are reports of a resurgence in African swine fever in its top producing province.
• Big hog producers in China have ramped up production, with data from China’s National Statistics Bureau showing China’s hog herd ended June at 439.11 million head, up 29% from year-ago. The country’s second quarter pork production hit a seven-year high.
• Average hog weights in the Iowa/southern Minnesota/South Dakota market jumped 1.6 lbs. to 278.2 lbs. the week ending July 10, which was still 4.9 lbs. lighter than last year at this point. The July 4 holiday likely skews week-to-week comparison to some degree.