GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: 8 to 9 cents higher.
Wheat: 2 to 5 cents lower.
GENERAL COMMENTS: Soybean futures climbed overnight in a corrective rebound from last week’s losses as traders monitored weather and awaited the start of this week’s Pro Farmer Midwest Crop Tour. Wheat futures ended overnight trade lower and corn was steady to firmer. Malaysian palm oil futures rose 1.7% behind a weaker ringgit and supportive export data. Front-month crude oil fell around 70 cents. U.S. stock index futures signal a weaker open, while the U.S. dollar index is nearly 200 points higher.
Pro Farmer scouts will be sampling corn and soybean fields across the seven Crop Tour states over the next four days. Follow along with updates on our website and by searching #pftour22 on Twitter. Scouts on the eastern leg of the tour are making their way today from Dublin, Ohio to Noblesville, Indiana. Those on the western leg are scouting fields between Sioux Falls, South Dakota and Grand Island, Nebraska. Look for preliminary route reports from Tour leaders in “Evening Report” and on our website. We’ll release the Tour results for Ohio and South Dakota and stream the nightly results on our site tonight. The Pro Farmer corn and soybean crop estimates will be released Friday at 1:30 p.m. CT. Our “Crops Analysis” and Livestock Analysis” reports will be replaced with “After the Bell” this week.
USDA’s monthly Cold Storage Report, to be released after today’s close, will detail frozen meat stocks at the end of July. The five-year average is a 22.2-million-lb. increase in beef stocks and a 4.2-million-lb. drop in pork stocks during the month.
Widespread rains ranging from 0.3 inch to over 2 inches fell over eastern and northwest Iowa, most of Illinois and southern Wisconsin, as well as Indiana and Ohio, over the weekend, according to World Weather Inc. “A favorable mix of rain and sunshine is expected in many U.S. key crop areas this week and next week, although there may be some pockets of net drying,” the forecaster said. “Temperatures will be mild enough to reduce evaporation rates.”
Some 27 ships loaded with grain have left Ukraine’s Black Sea ports since Aug. 1 under an export deal brokered by the U.N. and Turkey, which laid “the groundwork for a permanent peace environment,” Turkey’s Defense Minister said Saturday. Meanwhile, Ukraine is showing off wrecked Russian tanks in Kyiv for this year’s Independence Day celebrations. Russia appears to be amassing missiles in Belarus in preparation for an attack on Ukraine, according to an independent military intelligence group.
Ukraine’s agricultural exports are likely to rise to about 4 MMT in August, from 3 MMT in July, Reuters reported, citing a deputy chair of the Ukrainian Agrarian Council. Denys Marchuk, whose organization represents agricultural producers, said that despite new export opportunities, Ukrainian farmers would still face a shortage of funds and a third of them would not take part in 2022-23 winter grain sowing later this month.
Grain traders’ union UGA cut Ukraine’s 2022 combined grain and oilseeds crop forecast to 64.5 MMT from a previous outlook for 69.4 MMT due to a smaller than expected harvested area caused by the Russian invasion. The union said Ukraine could export 32.8 MMT in 2022-23, including 10 MMT of wheat. The government has said Ukraine could harvest at least 50 MMT of grain this year, compared with a record 86 MMT in 2021, because of the loss of land to Russian forces and lower grain yields.
China’s soybean imports from Brazil dropped in July from a year ago, while shipments from the U.S. increased, customs data showed, as high prices curbed demand for South American cargoes. China, the world’s top soybean buyer, imported 6.97 MMT of soybeans from Brazil in July, down from 7.88 MMT a year earlier, data from the General Administration of Customs showed. Total imports last month dropped 9% from a year before to 7.88 MMT, the lowest number for July since 2016, as high global prices and weak demand curbed demand. U.S. arrivals in July reached 377,642 MT, up from 42,277 MT in the same month last year. Summer arrivals are typically dominated by Brazilian origin beans, but bad weather has pushed up prices at a time of poor demand in China.
China cut its mortgage lending rate for the second time this year as the country’s central bank seeks to limit the fallout from a property sector liquidity crisis. The five-year loan prime rate was lowered to 4.3% from 4.45%, exceeding the median forecast from economists polled by Bloomberg and equaling a rate cut in May that was the largest on record.
Prices for beef, typically among the costliest grocery store purchases, are falling after more than a year of increases, as consumer demand softens for some cuts. Supplies are improving due to better staffing at meat plants, and supermarkets are offering more discounts on rib-eye, New York strip and other often-expensive products, according to the WSJ. Retail beef prices fell 0.7% for the four-week period ended Aug. 7, compared with the same period a year ago, according to data from research firm Information Resources Inc. That decline came after beef prices fell 1% during the prior four-week period, which was the first monthly decline since June 2021.
CORN: December corn traded on both sides of unchanged overnight as traders awaited indications on how much impact weekend rainfall may have had on Midwest crops. The most-active contract ended last week at $6.23 1/4, down 19 cents for the week. Traders also await USDA’s weekly crop ratings updates after today’s close. A week ago, USDA reported the U.S. corn crop at 57% “good” or “excellent” condition as of Aug. 14, down from 58% a week earlier.
SOYBEANS: November soybeans overnight rose as high as $14.14 1/2, just under resistance at the 50-day moving average at $14.15. The contract ended last week at $14.04, down 50 1/4 cents for the week. A week ago, USDA reported 58% of the soybean crop in good-to-excellent condition as of Aug. 14, down from 59% a week earlier, while 74% of the crop was setting pods, slightly under the 77% five-year average for that date.
WHEAT: December SRW wheat overnight fell as low as $7.62 1/2 after ending last week at $7.71, down 46 3/4 cents for the week. USDA a week ago reported 64% of the spring wheat crop in good-to-excellent condition as of Aug. 14, unchanged from a week earlier. The crop was 16% harvested, down from the five-year average of 35%.
LIVESTOCK CALLS
CATTLE: Lower
HOGS: Steady-weaker
CATTLE: Live cattle futures may start the week under pressure after Friday’s Cattle on Feed Report reflected larger than expected animal supplies. USDA estimated July feedlot placements at 1.765 million head, up 1.8% from year-earlier levels and above analyst expectations for a decline of about 1.5%. The number of cattle on feed as of Aug. 1 totaled 11.224 million head, 1.4% above the same date a year earlier and exceeding expectations for an increase of 0.7%, while July feedlot marketings fell 3.9% from 2021. Futures declines may be limited by recent cash strength, though the Cattle of Feed numbers may presage a softer market this week. Live steers averaged $146.76 last week through Friday morning, up $2.37 from the previous week’s average.
October live cattle ended Friday at $145.25, up 75 cents for the week. September feeders ended at $184.75, up $1.375 for the week.
HOGS: Lean hog futures may face followthrough pressure from last week’s sharp sell-off, which was driven by beliefs the cash market has peaked and is heading into a seasonally weak period. The CME lean hog index is down 31 cents to $120.29, the seventh drop in the past eight days. Choice pork cutout values fell $2.76 Friday to $117.15, down $4.68 from the end of last week and near a six-week low. October lean hog futures ended last week at $93.125, down $6.90 for the week and the contract’s lowest closing price since July 5.