GRAIN CALLS
Corn: 7 to 10 cents higher.
Soybeans: 12 to 16 cents higher.
Wheat: 9 to 18 cents higher.
GENERAL COMMENTS: Corn futures extended this week’s rally overnight to hit the highest levels since late June amid Midwest dryness concern and Pro Farmer Midwest Crop Tour reports of smaller yield potential in Nebraska and Indiana. Soybeans and wheat also rose. Malaysian palm oil futures rose a fourth straight session, while front-month crude oil futures gained slightly after posting a three-week high. U.S. stock index futures signal a firmer open, while the U.S. dollar index is up nearly 300 points and near a twenty-year high.
USDA reported a sale of 517,000 MT of soybeans for delivery to China during the 2022-23 marketing year. A day ago, USDA announced a soybean sale of 110,000 MT for delivery to China during the 2022-23.
Scouts on day 2 of the Pro Farmer Midwest Crop Tour Tuesday determined an average corn yield of 158.53 bu. per acre in Nebraska, down from both last year’s 182.35 bu. per acre estimate and the three-year Tour average of 176.68 bu. per acre. Soybean pod counts in a 3’x3’ square came in at 1,063.72 for Nebraska, down from both 1,226.43 in 2021 and the three-year Tour average of 1,245.06.
In Indiana, samples yielded an average corn yield of 177.85 bu. per acre, down from both 193.48 bu. per acre in 2021 and the three-year Tour average of 178.26 bu. per acre. Soybean pod counts in a 3’x3’ square totaled 1,165.97 for Indiana, down from 1,239.72 in 2021 but above the three-year average of 1,148,26.
On Day 3 of the Crop Tour today, scouts on the western leg will sample fields in western Iowa and southern Minnesota, and scouts on the eastern leg will sample Illinois and eastern Iowa.
There’s little change in the Midwest weather outlook, with scattered showers and thunderstorms reaching most crop areas in the Great Plains, Midwest, Delta and southeastern states through the first half of next week before conditions turn drier in the following week. The expected conditions “will be good for crops and fieldwork,” World Weather said.
Extreme heat in China is causing widespread problems, with authorities across the Yangtze river basin scrambling to limit damage to power, crops and livestock. China’s heatwave, stretching past 70 days, is its longest and most widespread on record, with around 30% of the 600 weather stations along the Yangtze recording their highest temperatures ever by last Friday. Chongqing’s agriculture bureau also drew up emergency measures to protect livestock at more than 5,000 large-scale pig farms, which have faced “severe challenges.” Damage to crops and water scarcity could spread to other food-related sectors, resulting in a substantial price increase or a food crisis in a severe case.
Ukraine’s 2022 grain harvest could shrink to 52.5 to 55.4 MMT from a record 86 MMT due to the Russian invasion cutting harvested area, Reuters reported, citing analyst APK-Inform said. The consultancy said the harvest could include up to 18.2 MMT of wheat, 29.9 MMT of corn and 5.9 MMT of barley. It said a smaller harvest and logistics difficulties could cut 2022-23 July-June exports to between 22.9 and 39.6 MMT depending on logistics situation.
Today marks the six-month anniversary of Russia’s invasion of Ukraine, and Russia has failed to meet any of its military objectives: conquering Kyiv, the capital, capturing the eastern Donbas region or seizing Ukraine’s coastline. Around 15,000 Russians have been killed, according to the Pentagon, roughly the same number that died in the Soviet Union’s decade-long occupation of Afghanistan. The frontlines have barely moved in recent weeks, though Ukraine hopes to push Russian troops out of Kherson, a city in the south, in the coming months. Both armies are exhausted.
Commercial flock confirmed with HPAI in California. USDA’s Animal and Plant Health Inspection Service (APHIS) said a commercial broiler breeder flock of 33,900 birds in Fresno County, California, has highly pathogenic avian influenza (HPAI), marking the 21st state to have HPAI in a commercial operation. With three infections in commercial flocks in Utah last month, there are now four U.S. flocks still under active quarantine in the U.S.
CORN: December futures overnight reached $6.67, the contract’s highest intraday price since $6.67 3/4 on June 28. The contract has rallied about 42 cents so far this week and techicals have turned increasingly bullish with December breaking above the trading range that held since the start of July. Upside targets for bulls include late June highs around $6.92 and $7.00.
SOYBEANS: November soybeans overnight reached $14.80 1/4, the contract’s highest intraday price since $14.81 on Aug. 1. The contract has surged over 70 cents this week and bulls likely are targeting the July high at $14.89.
WHEAT: December SRW wheat overnight rose as high as $8.17 3/4, the contract’s fourth straight daily gain, but failed to take out Tuesday’s high at $8.19 3/4, which coincides with the 40-day moving average.
LIVESTOCK CALLS
CATTLE: Steady-weaker
HOGS: Steady-weaker
CATTLE: Live cattle futures may face pressure from uncertainty whether the cash market will extend a recent upswing, though any declines may be limited by signs of firm beef demand. Strength in corn futures may pressure feeders. Futures’ slightly pullback early this week suggest skepticism a three-week cash uptrend may be fading amid expectations for seasonal weakness in beef demand. Choice beef cutout values fell $1.72 Tuesday to $262.80, a three-month low, though movement was strong at 152 loads, indicating retailers remain ready buyers on price drops.
HOGS: Lean hog futures may extend Tuesday’s late weakness on expectations the cash market will extend recent weakness. Futures traders appear to see further erosion in cash, as illustrated by October futures’ discount of over $26 to the CME lean hog index. The index is down 80 cents today to $119.18, a one-month low. Wholesale pork is also slumping, with pork cutout values plunging $12.53 Tuesday to $105.08, a 2 1/2-month low that was led by a decline of nearly $49 in bellies. But movement soared to 416 loads, the biggest one-day total since January. October lean hogs fell $1.075 Tuesday to $92.90, the contract’s lowest closing price since July 15.