GRAIN CALLS
Corn: 14 to 16 cents higher.
Soybeans: 3 to 6 cents higher.
Wheat: 6 to 14 cents higher.
GENERAL COMMENTS: Corn futures surged to a six-week high overnight after USDA crop ratings unexpectedly worsened and the Pro Farmer Midwest Crop Tour confirmed likely severe yield loss from drought in the western Corn Belt. Soybeans and wheat also rose. Malaysian palm oil futures rose a third consecutive session, while front-month crude oil gained over $1. U.S. stock index futures signal a firmer open, while the U.S. dollar index is around unchanged.
Scouts on the first day of the Pro Farmer Midwest Crop Tour found an average corn yield of 118.45 bu. per acre in South Dakota, down sharply from both last year’s 151.45 bu. per acre estimate and the three-year Crop Tour average of 161.59 bu. per acre. Soybean pod counts in a 3’x3’ square came in at 871.40 for South Dakota, down from 996.86 in 2021 and 1,026.86 for the three-year average. In Ohio, samples yielded an average corn yield of 174.17 bu. per acre, down from 185.06 bu. per acre in 2021 but up from the three-year average of 169.03 bu. per acre. Soybean pod counts in a 3’x3’ square totaled 1,131.64 for Ohio, down from 1,195.37 in 2021 and below the three-year average of 1,038.35. Today, scouts on the eastern leg of the Tour will sample routes from Noblesville, Indiana to Bloomington, Illinois, and scouts on the western leg will sample southeast Nebraska.
USDA reported a soybean sale of 110,000 MT for delivery to China during the 2022-23 marketing year.
Crop consultant Dr. Michael Cordonnier kept his corn yield estimate unchanged this week at 173.0 bu. per acre but holds a neutral to slightly lower bias. He kept his soybean yield estimate unchanged at 50.5 bu. per acre and has a neutral bias. “August is the make-or break month for soybeans and the soybeans in the eastern Corn Belt have benefited from recent rainfall,” he wrote. “The weather has not been as beneficial in the western Corn Belt, especially in Kansas, Nebraska, and South Dakota.”
Russia appears to be amassing missiles in Belarus in preparation for an attack on Ukraine, according to an independent military intelligence group. Meanwhile, Russia’s intelligence service on Monday blamed “Ukrainian special services” for carrying out a car bombing on Saturday which killed Darya Dugina, a 29-year-old journalist and the daughter of the prominent pro-Putin intellectual Alexander Dugin.
U.S. government urged its citizens to leave Ukraine. Saying it believed Russia was preparing to target civilian and government infrastructure in the next few days, the U.S. warned citizens to leave Ukraine, following a ban by the Ukrainian government on celebrations in the capital Kyiv on tomorrow’s anniversary of independence from Soviet rule due to fears of attack.
Acres that U.S. farmers were unable to plant have more than tripled from the same period last year as extreme weather wreaks havoc on fields. Prevented planting acres were at 6.4 million, according to the USDA Farm Service Agency’s August report. That’s up from 2.1 million in 2021. Corn was the hardest hit with more than 3 million acres unplanted, with the data indicating there were 1.19 million corn acres in North Dakota and 540,193 corn acres in South Dakota prevented from planting. Soybean prevented planting totaled 987,229 acres in the August data, with more than half — 522,061 acres — in North Dakota.
OPEC+ could reverse action and tighten oil supply. Saudi Oil Minister Prince Abdulaziz bin Salman said “thin liquidity and extreme volatility” in the futures market are moving prices in ways that do not conform to normal supply and demand factors, which may spark OPEC+ to take action. The Saudi-led group could tighten production when it meets next month, doing a U-turn after reversing all of the cuts made during the Covid-19 pandemic.
CORN: Late Monday, USDA reported the U.S. corn crop 55% in “good” or “excellent” condition as of Sunday, down from 57% a week earlier and below analysts’ expectations for the figure to stay unchanged. Corn rated poor-to-very poor increased to 18% from 17%. When USDA’s latest condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop fell another 4.07 points to 344.75, the sixth straight weekly decline.
December corn overnight pushed above the 50-day moving average and reached $6.47 1/2, the contract’s highest intraday price since July 11.
SOYBEANS: USDA reported 57% of the U.S. soybean crop in good-to-excellent condition as of Sunday, down from 58% a week earlier and one percentage point under analysts’ expectations. Soybeans rated poor-to-very poor increased to 13% from 12%. Based on the Pro Farmer CCI, the soybean crop declined by 2.64 points to 346.44, the third straight weekly decline.
November soybeans overnight reached $14.55 1/4, the contract’s highest intraday price since Aug. 12 and slightly under resistance at the 100-day moving average of $14.58.
WHEAT: USDA reported U.S. spring wheat crop conditions at 64% “good” to “excellent,” unchanged from the previous week and meeting expectations. Spring wheat harvest was 33% complete, up from 16% but still behind the 54% five-year average. Based on the Pro Farmer CCI, the spring wheat crop improved 1.33 point to 369.69, up sharply from a year-ago rating of 223.40.
December SRW wheat overnight briefly pushed above the 10- and 20-day moving averages and touched $8.05 1/2, the highest intraday price since Aug. 17
LIVESTOCK CALLS
CATTLE: Steady-firmer
HOGS: Steady-mixed
CATTLE: Live cattle futures may gain support from recent cash market strength and signs of strong beef demand. USDA’s Cold Storage report Monday showed U.S. beef stocks fell 6.0 million pounds during July to 510.8 million lbs., contrasting with an average drop of 22.2 million lbs. the previous five years and a sign of firm demand. On the cash market, live steers averaged $146.88 last week, up $2.49 from the previous week and the third straight weekly gain. But higher than expected numbers in USDA’s Cattle on Feed Report last week may slow the cash markets’ upside momentum and retail beef demand is poised to slow as the summer grilling season ends. Choice cutout values rose 24 cents Monday to $264.52 but movement was relatively light at 89 loads.
HOGS: Lean hog futures may see a mixed open, with support from a bullish Cold Storage report offset by continued slippage in cash fundamentals. The CME lean hog index is down 31 cents to $119.98, near a four-week low, and October futures’ discount to the index, currently around $26, remains unusually wide, suggesting traders see further cash weakness. Signs of firm demand may limit futures’ declines. Pork cutout values rose 46 cents Monday to $117.61 on strong movement of over 313 loads. USDA, in its Cold Storage report, reported a drop of 8.6 million lbs. in U.S. pork stockpiles during July, more than double the average decline the previous five years.