Corn: December corn fell 2 1/4 cents to $3.98, ending near the session low. Corn futures favored the downside in narrow trade, though increasing gains in wheat and soybeans limited selling interest as the U.S. dollar continued to fade. Mostly favorable weather continues to bode well for corn across the Midwest as USDA reported 67% of the crop was “good” to “excellent,” unchanged from last week, while the “poor” to “very poor” rating increased one point to 11%. On the weighted Pro Farmer Crop Condition Index, the corn crop slipped 1.1 points to 372.5. Click here for details.
World Weather Inc. reports much of the Midwest will experience net drying this week and early next week, though subsoil moisture and milder than usual temps will support many crops without much stress for a while. Hotter weather is expected in the western Corn Belt this weekend into early next week that may induce some crop stress.
On Day 1 of the Pro Farmer Crop Tour, scouts found an average corn yield of 156.51 bu. per acre in South Dakota, down from 157.42 last year but up from the three-year average of 142.44 bu. per acre. In Ohio, corn samples yielded an average of 183.29 bu. per acre, down from 183.94 bu. in 2023 but up from the three-year average of 181.06 bu. per acre. Today, scouts on the eastern leg of the Tour sampled routes from Noblesville, IN to Bloomington, IL and scouts on the western leg will sample central and southern Nebraska. Results for Nebraska and Indiana will be released this evening at 8 pm CT and can be found on our website.
Soybeans: November soybeans were unchanged at $9.76, while December soymeal fell $2.20 to $308.30. Both closed near the session low. September soyoil rose 24 points to 40.71 cents, marking the highest close since Aug. 12. Soybeans spent the session chopping around unchanged, with increasing soyoil gains and a diving U.S. dollar to a seven-and-a-half-month low, propping up commodities. Moreover, a second straight day of soybean flash sales totaling 371,492 MT from USDA fueled some optimism, with the purchases divided between China (132,000 MT) and Mexico (239,492 MT) for delivery during 2024-25. Today’s sale brought this week’s sales total to 813,492 MT, with 464,000 MT slated for China. USDA’s crop condition ratings held at 68% “good” to “excellent” and 8% “poor” to “very poor,” unchanged from a week ago, though our CCI slid 0.4 point to 367.4.
On the first day of the Pro Farmer Crop Tour, scouts found Soybean pod counts in a 3’x3’ square averaged 1,025.89 for South Dakota, up from 1,013 last year and from the three-year average of 960.42. In Ohio, pod counts in a 3’x3’ square totaled 1,229.92 for Ohio, down from 1,252.93 in 2023 but above the three-year average of 1,193.31. Look for additional state results on the Pro Farmer website this evening as well as updates from scouts on X (formerly Twitter) by searching #pftour24.
Wheat: December SRW wheat rose 4 1/4 cents to $5.56 1/2. December HRW wheat gained 4 3/4 cents to $5.61 1/4. Prices closed nearer their session highs. December spring wheat futures rose 3 cents to $6.06 1/2. The winter wheat futures markets saw short covering today as prices continue to languish near their recent contract lows. Weakness in corn did limit the upside in wheat futures today. Wheat market bulls also got a little support today from a weaker U.S. dollar index that hit a seven-month low today. USDA Monday afternoon rated 73% of the U.S. spring wheat crop as “good” to “excellent” and 5% “poor” to “very poor.” On Pro Farmer’s Crop Condition Index rating, the spring wheat crop fell 1.7 points to 380.2, with 500 being a perfect crop.
World Weather Inc. today said that in the northern Plains states, conditions in the next seven days “will be favorable, with a few exceptions. Occasional rain will help support the needs of crops. However, greater rainfall will still be needed for Montana, where soil moisture is lowest.” Temperatures are not expected to be too overly hot but there will be a near to above average bias with the temperatures which will promote seasonably high evaporation rates, said the forecaster. Elsewhere, there is some potential for greater rain to fall in the eastern parts of Canada’s Prairies this weekend into next week. Drier and warmer weather is needed in each of these areas to protect grain quality, said the forecaster.
Cotton: December cotton closed up 66 points at 69.34 cents today and nearer the daily high. Prices closed at a two-week high close today. The cotton futures market saw more short covering today after hitting a contract low last Friday. Support also came from a weaker U.S. dollar index and recent rallies in the U.S. stock indexes that pushed the S&P and Nasdaq indexes to four-week highs earlier today. The recent downdraft in crude oil futures prices may limit further upside in the cotton futures markets, if the selloff in crude persists. USDA Monday afternoon rated the U.S. cotton crop as 42% “good” to “excellent” and 26% “poor” to “very poor.” Cotton bolls were at 19% opening versus 17% one year ago at this time. World Weather Inc. today said Monday was mostly dry, hot and stressful for cotton in many U.S. areas, while excessive heat continued in eastern parts of West Texas, the north-central and eastern Panhandle, the northern Blacklands, and especially southwestern Oklahoma where temperatures reached 112 Fahrenheit. That may crimp production potential.
Cattle: The bears rampaged through the cattle and feeder cattle markets Tuesday, with most-active October live cattle tumbling $3.425 to $175.60. October feeder futures plunged $4.55 to $231.325. Despite substantial discounts already built into cattle and feeder futures, those markets followed-through sharply to the downside Tuesday. The breakdown also occurred despite generally supportive or slightly bearish cash and wholesale data. For example, cash cattle trading averaged $189.14 last week, whereas today’s futures dive took the August future down to $181.025 at the close. That clearly implies bears expect major cash market losses by contract expiration on Friday, August 30. And yet, what little cash trading that occurred Monday took place at $190.00 in the Iowa-southern Minnesota region. Wholesale beef prices also remain relatively elevated, with choice cutout having dipped $1.89 to $313.69 at midsession today. Bears apparently expect a repeat of the breakdown seen in the second half of 2023, when cash cattle prices peaked at $188.20 in mid-August, then fell to $168.62 in the second week of October. We remain skeptical of such a large drop this year, due largely to the sustained demand strength apparent through spring and early summer. In addition, the now-huge discounts built into deferred futures are going to encourage producers to keep marketings current and reduce feedlot placements. This does not add up to increased fed cattle and/or beef supplies.
In contrast to the early firmness seen in cash cattle trading, the feeder cattle index (for last Friday) dove $2.72 to $243.99 yesterday afternoon. That almost surely played a big role in today’s feeder futures plunge. On the other hand, the discounts built into feeder futures remain very large.
Hogs: Hog futures followed the cattle/beef sector lower Tuesday, with nearby October sliding 40 cents to $76.40. Despite last week’s onset of the usual late summer-fall surge in hog supplies and slaughter (last week’s preliminary kill estimate easily topped the previous week’s figure due to packer holidays for some on the first Monday in August and exceeded the year-ago figure by 3.4%), hog and pork prices remain relatively elevated. As expected, the CME stated last Friday’s quote for the hog index at $89.95, with USDA data placing Monday’s figure at $89.71, down 24 cents. Pork cutout actually edged up 40 cents to $97.49 at noon today, although traders likely expect it to move lower this afternoon due to an outsized early advance in pork belly values. As indicated previously, we believe improved packer and grocer attitudes toward the hog and pork sector played a big role in the belated summer strength exhibited by cash and wholesale prices. If that continues into fall, the usual August-September dive in hog and pork values may prove significantly smaller than is currently anticipated.