10:30 a.m. Market Snapshot | June 29, 2021

Corn futures are up 12 cents in July and 3 to 5 cents in deferred months at midsession.

• December corn futures reached the highest intraday price in a week following an unexpected decline in USDA’s weekly crop ratings.
• USDA’s crop condition report yesterday showed U.S. corn rated “good” or “excellent” as of yesterday at 64%, down from 65% the previous week and the fourth consecutive weekly decline. Analysts expected a rating of about 66%.
• 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), corn showed little change, rising 0.3 point to 367.0 points but 8.9 points below the five-year average.
• Ongoing crop ratings erosion underscored the persistent dryness that continues to grip key parts of the Corn Belt, particularly the northwest.
• A few days of excess heat may return to the Midwest in July as a high-pressure ridge retreats from the Prairies, according to World Weather Inc., with another heat wave possible for the eastern Plains and western Corn Belt during the last half July.
• Crop Consultant Dr. Michael Cordonnier maintained his 177.5 bu. per acre U.S. corn yield estimate this week and his neutral-to-lower bias toward the crop. This past weekend may be a big “missed opportunity” for the crop in the northwestern Corn Belt,” he said in a report.
• The market awaits Wednesday’s USDA Acreage and Grain Stocks Reports.
• Frost in some safrinha corn producing areas of Brazil with more in store is also fueling some buying.

Soybean futures are split with old-crop fractionally to 4 cents higher and new crop fractionally to 2 cents lower. Soymeal futures are $1.40 to $3.00 lower. Soyoil futures are posting moderate to strong gains but well off their earlier highs.

• Soybeans are finding spillover support from strength in the soyoil market. But as soyoil came off its highs, so did soybeans.
• USDA’s “good” to “excellent” ratings for soybeans held at 60% over the past week, though there was a one-point increase in the top category. Traders expected a one-point increase in the overall “good” to “excellent” rating.
• On our weighted CCI, the soybean crop slipped 0.3 point to 354.3 points, which is 8.8 points below the five-year average for the end of June.
• Traders are preparing for USDA’s Acreage and Grain Stocks Report on Wednesday. Traders expect soybean plantings to rise about 1.4 million acres from March intentions to near 89 million acres. June 1 soybean stocks are expected to be down 43% from year-ago.
• Statistics Canada estimates Canadian canola plantings at 22.5 million acres, up 949,000 acres from spring intentions and 8.2% higher than year-ago. Canadian soybean plantings are estimated at 5.3 million acres, up just fractionally from spring intentions but up 4.9% from last year. Increased canola and soybean acres are attributed to the sharp rise in prices and strong global oilseed demand.

Wheat futures are mixed at midsession, with SRW and HRW markets higher but spring wheat lower.

• September spring wheat futures soared to a contract high at $8.57 overnight but faded lower in early trading today, dropping within two cents of yesterday’s low at $8.14.
• Ongoing deterioration in spring wheat conditions of the Northern Plains continues to propel buying interest. USDA yesterday reported 20% of the spring wheat crop in “good” to “excellent” condition, down from 27% from a week ago and 69% a year ago.
• The spring wheat CCI rating fell another 7.5 points over the past week to 269.5 points, and is now 94.3 points below the five-year average for the end of June.
• USDA reported the winter wheat crop was 33% harvested as of Sunday, up from 17% a week earlier but behind the five-year average of 40%.
• Statistics Canada raised its estimate for the country’s all wheat plantings to 23.36 million acres, up from 23.26 million acres in an April forecast but still down 6.5% from a year earlier.

Live cattle futures are choppy with deferred months favoring the downside. Feeder cattle are split with 2021 contracts up slightly and far deferred months under pressure.

• August live cattle bounced back from an early drop to a one-week low amid expectations strength in cash cattle will persist.
• Live steers in top U.S. cattle areas yesterday averaged $125.47, down seven cents from Friday but still up from mid-June levels around $120.
• Wholesale beef prices remain under pressure as retailer demand tapered off. Choice cutout values yesterday averaged $297.43, down $7.13 for the day and the lowest since April 30.
• On the daily charts, live cattle futures scored a bearish “outside day” down yesterday, but market bulls still have a near-term technical advantage. Upside price objectives include closing August futures above solid resistance at the $125.775 contract high. Downside objectives include closing below solid technical support at $120.00, just under last week’s low.

Hog futures are slightly to moderately higher at midsession, led by nearby July and August contracts.

• August hog futures rose as high as $104.175 per hundredweight, the highest intraday price in a week, as the market extended a technical recovery from sharp losses last week. Hog futures are trading with expanded $4.50 daily price limits today after yesterday’s limit-up gains.
• Cash markets to diverge. Carcass values yesterday averaged $112.53, down $4.36 from Friday, while carcass cutout values averaged $115.13, up $5.09, USDA report showed.
• Expectations for larger U.S. pork supplies beginning later this summer should keep pressure on futures, but downside may be limited by strong exports, with China of particular interest. China's state planner said yesterday that central and local governments will start buying pork for state reserves to support prices, even after prices rebounded sharply from a two-year low last week.
• USDA’s Hogs and Pigs report last week indicated that market-ready supplies will be larger than expected through summer, though still down around 1.5%.
• Futures’ steep recent sell-off severely damaged the hog market’s chart posture, suggesting a top was established with the contract highs posted in early June. But the rebound this week pushed August futures back above the 100-day moving average.
• Market bears still hold the upper hand. Downside price objectives include closing August futures below the June low of $96.50. Upside price objectives include last week’s high at $106.90 and resistance at $107.50.