Corn: Corn rallied 7 3/4 cents to $4.00 1/4, closing above the 10-day moving average and marking the largest daily gain since July 22. Corn futures notched short-covering gains to begin the week, largely led by strength in the soy complex and a sinking U.S. dollar. Solid export inspection data for the week ended Aug. 15 was supportive, with net inspections totaling 1.17 MMT (45.9 million bu.), which rose 179,907 MT from the previous week and were near the upper-end of the pre-report range of 700,000 MT to 1.2 MMT. Meanwhile, USDA will update crop condition ratings in its weekly Crop Progress Report this afternoon, with analysts expecting the “good” to “excellent” rating to remain unchanged at 67%.
The annual Pro Farmer Crop Tour kicked off today, with scouts sampling fields from Dublin, Ohio to Noblesville, Indiana on the eastern leg of the Tour and between Sioux Falls, South Dakota and Grand Island, Nebraska on the western leg. Yield results for Ohio and South Dakota will be released at 8 p.m. CST this evening on our site. On Tuesday, the eastern leg of the Tour will progress from Indiana to Bloomington, IL and the western leg toward Nebraska City, NE. You can find updates throughout the day by searching #pftour24 on X (formerly Twitter).
Soybeans: Soybeans surged 19 cents to $9.76, closing just shy of the session high, while December soymeal rose $8.40 to $310.50, ending the session above the 10-day moving average for the first time since Aug. 2. September soyoil rose 52 points to 40.47 cents. Soymeal strength led the soy complex higher to begin the week, though a USDA export flash sale consisting of 332,000 MT to China and 110,000 MT of soybeans to unknown destinations for 2024-25 certainly lent some enthusiasm. Meanwhile, export inspections for the week ended Aug. 15 were also mildly supportive, with net inspections totaling 398,233 MT, up 48,597 MT from the previous week and within the pre-report range from 250,000 to 450,000 MT.
As the U.S. crop progresses through its most crucial growth phase, weather looks set to remain mostly supportive of elevated yields. World Weather Inc. reports weather should be sufficient to support late season summer crop development, despite net drying in areas. Temps will not be oppressively hot in key soybean areas except in parts of the Delta and Tennessee River Basin where below normal rainfall will be ongoing into the autumn. Most late-season corn and soybeans will do fine in the Midwest, although late double-cropped beans in the Delta could experience some stress and lower yield. USDA will update its weekly crop condition ratings this afternoon, with analysts expecting the “good” to “excellent” rating for soybeans unchanged from a week ago at 68%, according to a Bloomberg poll.
Wheat: December SRW wheat futures fell 1/4 cent to $5.52 1/4. December HRW wheat futures rose 1 1/2 cents to $5.56 1/2. Both markets closed nearer their daily highs. December HRS fell 5 1/2 cents to $6.03 1/2. The winter wheat futures markets continue to languish at lower price levels and got very little spillover support from solid rallies in the corn and soybean futures markets today. December HRW saw tepid short covering today after hitting a contract low last Friday. Selling interest was limited today by a lower U.S. dollar index. However, solid losses in crude oil futures today did keep the wheat market bulls mostly on the sidelines. USDA this morning reported weekly U.S. wheat export inspections of 347,519 MT, within the pre-report range of 300,000 to 725,000 MT.
World Weather Inc. reports spring wheat in Europe, Russia, China, Canada and the northern U.S. Plains “will experience a mix of weather that is not ideal for some areas and much better in others. Argentina still needs greater rain, although it has sufficient time for that, and Australia’s small grain crop is poised to perform well in the spring.” This afternoon’s weekly USDA crop progress reports are expected to show the U.S. spring wheat condition at 71% “good” to “excellent” conditions as of Sunday, compared to 72% last week and 38% one year ago at this time. Spring wheat harvested is seen at 31% complete versus 18% last week and 39% one year ago. U.S. winter wheat harvested is seen at 96% complete as of Sunday, compared to 93% last week and 96% on year ago at this time.
Cotton: December cotton futures rose 144 points to 68.68 cents and nearer the session high. Short covering was featured to start the trading week after prices last Friday hit a contract low. The market was also supported by a lower U.S. dollar index and the ongoing rebound and rallies in the U.S. stock indexes that hit three-week highs today. Further encouragement for the cotton market bulls came from a Goldman Sachs report, indicating a 20% chance the U.S. will slip into an economic recession. However, gains in cotton were limited today by solid losses in the crude oil market, mainly due to worries about slowing economic growth in China.
World Weather Inc. today said west Texas cotton regions will continue to see limited rain and very warm temperatures “which will maintain some downward pressure on production.” Good harvest conditions are prevailing in southern Texas and the Texas Blacklands’ crop remains favorably rated. Weather in the U.S. Delta is expected to be drier than usual for an extended period of time “which may lead to some of the best fiber quality in the U.S. this autumn,” said the forecaster. Weather in the southeastern U.S. continues to improve for cotton that survived Tropical Storm Debby.
Cattle: Expiring August live cattle futures settled unchanged at $182.80 Monday, whereas most-active October futures advanced 72.5 cents to $179.025. The nearby August feeder cattle contract dipped 40 cents to $242.375, while most-active October feeders slipped 22.5 cents to $235.875.
Cattle and feeder futures rebounded modestly from last Friday’s big losses. We suspect the rebound reflected persistent wholesale beef price firmness, and possibly due to smaller cash market losses than anticipated late last week. The USDA reported this morning that last week’s five-area direct market average came in at $189.14, which represented a $2.20 drop from the week prior. That marked the second consecutive week of $2.00-plus losses. Moreover, August live cattle futures under $183.00 imply equally large or even larger declines are expected over the next three weeks. We are skeptical on this point, since we still suspect active grocer buying will limit further short-term wholesale losses, which in turn could provide considerable support for cash cattle values. Choice beef cutout did slip 70 cents to $315.75 at noon today, but that’s clearly a very modest decline from last Friday’s five-week high of $317.45. Producers seeing such beef gains are not going to be eager to continue cutting their asking prices in the weeks ahead. The fact that the CME feeder cattle index has turned higher after having plunged from over $260 in mid-July to $245.09 on August 13, suggests support is emerging. It’s now quoted at $246.71, or about $4.5 over August and $11.00 over October feeder futures. Again, we suspect the discounts built into both live and feeder cattle futures are too large.
Hogs: Hog futures rebounded strongly from last week’s late losses, with the nearby October futures leaping $1.725 to $76.80. Little concerning the hog outlook changed over the weekend. That is, the cash market dipped as expected, while pork prices remained below the psychologically important $100.00 level. The CME officially confirmed last Thursday’s preliminary reading for the hog index at $90.20, up 2 cents from Wednesday. But USDA data indicates Friday’s official quote will dip 25 cents to $89.95. More losses are likely coming, although the emergence of strong grocer buying of pork might halt or slow the expected drop. That is, if grocer pork purchases accelerate as Labor Day approaches, the usual seasonal decline may prove surprisingly small in the short run. Pork cutout proved unable to sustain last week’s rebound above $100.00 but edged 25 cents higher to $98.92. Today’s strong futures rebound from last week’s late drop strongly suggests traders expect hog/pork complex activity for Labor Day is going to prove firmer than previously thought.