10:30 a.m. Market Snapshot | July 8, 2021

Corn futures are fractionally higher in all but the front month, which is down 2 cents.

Crop-friendly weather across much of the Midwest with pollination starting soon is keeping pressure on corn futures.
Two more weeks of favorable conditions are expected for much of the Midwest,” World Weather Inc. said today. “Regular rounds of rain will occur through late next week, while a lack of excessive heat will continue for another week with some of the driest areas in the west-central and northwestern Corn Belt seeing improvements in yield potential.”
But the latest drought monitor for the week ending July 6 showed drought worsened in western and northern areas of the Midwest, despite recent moisture.
Ethanol production climbed 9,000 barrels per day to 1.07 million bpd the week ending July 2. Ethanol stocks fell 423,000 barrels to 21.15 million barrels, an encouraging demand signal.
Brazil’s USDA equivalent Conab dropped its estimate for Brazil’s total corn crop more than 3 MMT to 93.39 MMT, which is well (9.0%) under last year’s 102.59-MMT crop. The cut reminds of the crop’s struggles with drought and frost.
December corn fell as low as $5.23 1/2 overnight, near key a support level around $5.20, and within sight of the psychologically important $5 mark.

Soybean futures are 5 to 12 cents higher at midsession, led by the July contract.

While Midwest weather is also bearish for soybeans, declines have been limited by further declines in crop condition ratings and beliefs the market’s recent slide will stir fresh export business. USDA yet to report any soybean sales, despite talk of Chinese buying.
USDA earlier today reported a daily sale of 122,200 MT of soymeal to Mexico for 2021-22.
November soybeans fell as low as $13.11 1/2 overnight, and still has an unfilled a gap on the daily chart between Friday’s low of $13.82 1/2 and Tuesday’s high of $13.73 1/4.

Deteriorating crop conditions in the Northern Plains continue to support spring wheat futures, while pressure from expanding harvest activity weighs on SRW.
In the Northern Plains, rain forecast over the coming week “will be enough for some soil moisture improvement, especially in localized areas,” World Weather said today. However, the region “will be in need of much more rain than this… (though) the rain that falls will be beneficial and at least provide some additional temporary relief to crops.”
Today’s drought monitor showed spotty drought improvement in North Dakota, but also a worsening of drought in other spring wheat producing areas. USDA rated the spring wheat crop 16% “good” to “excellent” at the start of the week.

Cattle futures are moderately lower at midsession, led by declines in feeder cattle.

Live cattle are under pressure from weaker technical posture and a continued slump in wholesale beef. Choice cutout values averaged $284.90, down $1.78 from the previous day and the lowest since April 23.
Cash cattle trade got started in the Iowa/Minnesota and Nebraska markets yesterday mostly around $125, with Kansas trade centering around $120.50 and Texas seeing action around $120. This is generally in line with last week’s trade.
August live cattle futures fell as low as $119.425, the lowest intraday price since $118.525 on June 11.

Lean hog futures are moderately higher at midsession.

Lean hog futures are holding to narrow ranges, with stronger cash markets helping offset bearish chart developments in recent weeks.
Carcasses on daily direct markets yesterday averaged $110.91, up $2.93 from the end of last week, according to USDA.
Pork cutout values averaged $115.74 yesterday, up $2.13 from the previous day, on movement of 278.5 loads. That was a notable slowdown in movement.
August lean hogs fell as low as $99.775, compared to $100.225 at the end of last week. But the contract has since moved well off its lows.

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