GRAIN CALLS
Corn: Steady to 2 cents higher.
Soybeans: 10 to 12 cents higher.
Wheat: SRW 3 to 5 cents higher; HRW 7 to 10 cents higher; HRS 7 to 10 cents higher.
GENERAL COMMENTS: Soybeans continue to show relative strength with steady gains overnight, and corn futures saw strength into the break as well. Wheat futures traded higher overnight but still maintain a tight trading range. Traders will be keeping a close eye on the Crop Tour results released after the close today. Front-month crude oil futures are around $1.00 higher at $80 and the U.S. dollar index is near unchanged.
Scouts on day 4 of the Pro Farmer Crop Tour on Thursday calculated an average corn yield of 182.8 bu. per acre in Iowa, down from 183.81 bu. per acre last year and the three-year average of 184.13 bu. per acre. Soybean pod counts in a 3’x3’ square averaged 1,190.41 for Iowa, up from 1,174.43 last year and the three-year Tour average of 1,179.51.
For Minnesota, the Tour found an average corn yield of 181.34 bu. per acre, down from 190.39 bu. per acre last year and the three-year average of 187.63 bu. per acre. Soybean pod counts in a 3’x3’ square averaged 984.39 in Minnesota, down from last 1,100.75 year and the three-year average of 1,071.31.
Pro Farmer’s U.S. corn and soybean crop estimates will be released today at 1:30 p.m. CT.
The Midwest is seen as staying dry over the next ten days, though temperatures are expected to cool into the weekend, says World Weather Inc. Temperatures are expected to trend a little warmer in the second week of the outlook but will not likely reach the highs seen this week.
The Jackson Hole Symposium continues today. The meeting of the world’s central bankers is expected to bring volatility into the market as Fed Chair Powell is likely to outlay his beliefs and plans for inflation over the coming months. Former Fed Vice Chair Donald Kohn said that Powell is likely to caution against easing too soon and may give insight into what Powell means when he says “data dependence.” Powell is set to take the stage at 9:05 CT this morning, with Fed members lined up to speak all day.
The euro/dollar exchange rate has fallen to its lowest point in over two months, dropping by a significant 4.5% from its peak in July. This decline is attributed to the resurgence of U.S. long-term bond yields, which have been increasing steadily throughout August. Consequently, the U.S. dollar index has surged to the highest level since June 7. This makes U.S. exports less competitive on the world market, though falling agricultural prices over the same period has negated some of the rally in the dollar.
China has made several pledges to revive the nation’s economy and improve the business environment as concerns about the world’s second largest economy arise. The Communist Party has largely been focused on encouraging more spending on things like consumer goods and cars, coaxing private companies to expand investment, making it easier for private companies to access funding and relaxing home buying regulations. The nation has already cut interest rates twice this year despite most of the developed world raising interest rates to combat inflation. The government has been reluctant to give the kind of cash handouts that fueled post pandemic recoveries in the U.S. and elsewhere as the government is attempting to keep the national debt low.
Private exporters reported sales of 121,000 MT of soybeans for delivery to China during the 2023-24 marketing year this morning.
CORN: December corn futures traded in a tight range once again overnight. Price has been balanced between 10-day moving average support and 20-day moving average resistance. The consolidation and volatility are likely to continue, but a daily close below $4.88 or above $4.95 will help establish near-term momentum.
SOYBEANS: November soybean futures are working on the third straight day of gains, but price has quickly marched back into stiff resistance at $13.80. This is the level that capped the gains on Monday and led to Tuesday’s selling pressure. A daily close above $13.80 would look bullish and target the $14.00 level. Support can be expected at $13.60, then $13.40.
WHEAT: December SRW futures remain in a tight range and today’s session will be key in establishing near-term momentum. Bulls continue to struggle against $6.37 resistance and bears need a break below $6.30 to garner momentum.
LIVESTOCK CALLS
CATTLE: Higher.
HOGS: Choppy/higher.
CATTLE: Live cattle futures are expected to open higher, continuing yesterday’s break higher that led to the highest close since August 11. Price seemingly broke out of the consolidation range that has captured most of the trading range in the last couple weeks. Higher cash trade supported bulls yesterday, though volume remains limited. This week’s cash average is currently at $185.75, up from $185.04 last week. Wholesale prices remained relatively strong after yesterday’s midsession gains, with Choice rising 58 cents on the day to $317.63 and Select rising 32 cents to $291.91, bringing the Choice/Select spread to $25.72.
HOGS: Lean hog futures are expected to open higher though recent volatility could pressure prices. Price has been volatile in a downward trend since the August 1 peak. Wholesale prices seemingly supported futures yesterday, rising $4.13 to $104.92, led by a $15 jump in bellies. While this proved beneficial for the time being, the strength is likely temporary as a seasonal rise in pork supplies and downturn in demand as the summer grilling season and BLT season coming to an end will weigh heavily on prices. The CME lean hog index is expected to post its largest daily since prices turn over recently, falling 97 cents to $96.40.