10:30 a.m. Market Snapshot | July 22, 2021

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Corn futures are 11 to 14 cents lower at midsession.

  • Grain and soybean futures fell amid general profit-taking pressure overnight, with weaker-than-expected export sales also weighing on the corn market.
  • USDA’s weekly export sales report today showed net sales reductions of 88,500 metric tons (MT) for corn for the 2020-21 marketing year. For 2021-22, net sales totaled 47,700 MT. The net sales reduction for 2020-21 wasn’t a surprise, but sales for 2021-22 were lighter than expected.
  • There were few significant changes to the near-term weather outlook for key U.S. crop areas, as dry conditions persist in the northwest Corn Belt and hotter temperatures are expected through at least month-end.
  • Warmer temperatures and infrequent rain during the coming week “will lead to significant drying in much of the Midwest,” World Weather Inc. said. Stress on crops “will increase from the eastern Dakotas and northeastern Nebraska into Minnesota and northern Iowa, where yield potentials should decline.”
  • December corn fell as low as $5.50 3/4, slightly above the 20-day moving average and also above this week’s low, $5.44 1/2.

Soy complex futures are sharply lower, with soyoil leading declines and soybeans tumbling over 40 cents.

  • General profit-taking and technical selling pressured the soy complex, along with lackluster weekly export sales.
  • USDA reported net weekly soybean sales of 62,000 MT for 2020-21, down 22% from the prior four-week average. For 2021-22, net sales totaled 176,300 MT. Both figures were in line with expectations. Sales of soymeal and soyoil were light.
  • November soybeans overnight pushed below the 40-day moving average around $13.65 and fell as low as low as $13.42 1/4, the lowest intraday price since $13.27 on July 12; other chart levels to watch include the 100-day moving average around $13.25.

Wheat futures are sharply lower, led by declines of over 3% in the SRW market.

  • HRW and SRW futures tumbled overnight after six consecutive daily gains pushed prices to two-month highs. USDA’s weekly export sales were within trade expectations.
  • USDA reported net weekly wheat sales of 473,200 MT for 2021-22, which were up 11% from the previous week and 44% from the prior four-week average. Trade expectations ranged from 350,000 MT to 600,000 MT.
  • September spring wheat futures extended a pullback from the $9.44 1/2 contract high reached Monday amid speculation the market has established a near-term top; still, severe dryness in the Northern Plains and Canadian Prairies may limit the downside.
  • September SRW futures fell as low as $6.81 3/4, a low for the week and the lowest intraday price since $6.70 3/4 on July 16; downside chart levels to watch include the 40-day and 100-day moving averages, both around $6.66.

Cattle futures are higher at midsession, led by gains in the feeder market.

  • Signs of stabilization in the wholesale beef market helped lift live cattle futures, while weaker corn prices boosted feeders.
  • Choice cutout values yesterday rose 36 cents to $265.24, following a near-uninterrupted slump since early June; cutouts are still down from last week’s average of $272.77 and near 3 1/2-month lows.
  • USDA today reported net beef export sales of 25,100 MT for 2021, up 63% from the prior four-week average. Exports also hit a marketing-year high of 21,400 MT.
  • Live steers in top U.S. feedlot regions yesterday averaged $121.17, down from last week’s average of $122.82, according to USDA.
  • Tomorrow’s monthly Cattle on Feed and biannual Cattle Inventory Reports are expected to show contraction in the U.S. herd.
  • The July 1 feedlot inventory is expected to be down about 1% from year-earlier levels, based on the average of analyst estimates, and the total U.S. cattle inventory is expected to be down around 0.5%. Feedlot placements in June are expected to have declined about 4.1%.

Lean hog futures are lower after fading from early gains.

  • Hog futures are under pressure from cash market weakness and profit-taking after gaining for much of the past two weeks.
  • The national direct average carcass price fell $3.06 yesterday to $106.78, down from $107.32 at the end of last week, USDA reported.
  • August lean hog futures remain at a discount to the CME lean hog index, which climbed to $112.34 for the two days ended July 20.
  • Average cutout values rose $1.75 to $122.09, as sharp jumps in belly and ham prices pushed the benchmark to its highest point since June 17.
  • Pork export sales of 24,500 MT for the week ending July 15 were up notably from last week, but down 12% from the prior four-week average. Pork exports of 30,800 MT were in line with recent tallies.
  • USDA’s monthly Cold Storage Report later today, if it keeps with historical trends, will show tighter pork supplies. On average over the past five years, frozen pork stocks have fallen 27.6 million lbs. from the end of May to the end of June.
 

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