GRAIN CALLS
Corn: 3 to 4 cents higher.
Soybeans: 9 to 12 cents higher.
Wheat: 1 cent lower to 3 cents higher.
GENERAL COMMENTS: December corn futures rose for the seventh time in the past eight sessions amid ongoing concern Midwest heat and dryness will hamper yield potential. Soybeans also gained as the market awaits the Pro Farmer Midwest Crop Tour U.S. yield and production estimates after today’s close. Wheat futures were mixed. Malaysian palm oil futures fell 1.8% but still gained 2.2% for the week. Front-month crude oil futures are down slightly and the U.S. dollar index is over 400 points lower.
Scouts on day 4 of the Pro Farmer Midwest Crop Tour Thursday calculated an average corn yield of 183.81 bu. per acre in Iowa, down from last year’s 190.76 bu. per acre estimate and about even with the three-year Tour average of 183.80 bu. per acre. Soybean pod counts in a 3’x3’ square averaged 1,174.43 for Iowa, down from an average of 1,217.80 in 2021 but up from the three-year Tour average of 1,157.00.
For Minnesota, the Tour determined an average corn yield of 190.39 bu. per acre, up from a 177.44 bu. per acre estimate in 2021 and up from the three-year Tour average of 180.96 bu. per acre. Soybean pod counts in a 3’x3’ square averaged 1,100.75 for Minnesota, up from an average of 1,027.33 in 2021 and up from the three-year Tour average of 1,026.16.
Pro Farmer’s U.S. corn and soybean crop estimates will be released today at 1:30 p.m. CT.
USDA reported a sale of 146,000 MT of soybeans for delivery to “unknown destinations” during the 2022-23 marketing year. Earlier this week, USDA reported two soybean sales totaling 627,000 MT to China.
Near-term rain prospects were reduced for the central U.S. Plains into the central Midwest relative to recent days, World Weather Inc. said today. Midwest weather “will be mixed, with alternating periods of rain and sunshine and seasonable temperatures supporting late season crop development,” the forecaster said.
The European Commission cut its forecast for this year’s European Union corn harvest by 10%, the second steep cut in a row, due to severe drought. The Commission reduced its projection of usable EU corn production in 2022-23 to 59.3 MMT, down from 65.8 MMT expected a month ago and the smallest harvest in seven years. Previously, the Commission lowered its forecast by nearly 6 MMT, or 8%.
French corn crop conditions declined last week to the lowest rating in more than 10 years, data from farm office FranceAgriMer showed, suggesting recent rain brought limited benefit to fields damaged by heat and drought. An estimated 47% of French corn was in good or excellent condition as of Aug. 22, down from 50% the previous week, FranceAgriMer said today. That marked a fresh low for the time of year in FranceAgriMer crop ratings going back to 2011. This year’s rating has been cut about 35 percentage points since early July.
Argentina’s wheat crop for 2022-23 is rated nearly 80% in normal-to-good condition after recent rains led to improvements, the Buenos Aires Cereal Exchange said. Argentina producers planted 15.1 million acres to wheat and are expected to begin harvest in November. Despite the positive outlook, the grains exchange warned in its weekly report that dry conditions and frosts continue to affect areas in the north of the country, where they said there is an “increasing demand for water.”
Sen. Marsha Blackburn (R-Tenn.) is set for a three-day visit to Taiwan, the third visit to the island this month by members of Congress after House Speaker Nancy Pelosi’s trip led to more than a week of aggressive Chinese military exercises. Blackburn, who sits on the Senate Armed Services Committee, met Taiwan President Tsai Ing-wen on Friday morning. The trip is likely to further test Washington’s tense ties with Beijing.
Ukraine president Volodymyr Zelenskyy said Europe narrowly avoided a “radiation disaster” after the Russia-occupied Zaporizhia nuclear plant was temporarily disconnected from the electricity grid. Back-up generators were able to ensure supply after Russian shelling had sparked a fire in a nearby power station, he said. A Russian official blamed Ukrainian forces for the fire. The U.N.’s nuclear watchdog said its officials were “very, very close” to being able to visit the nuclear plant and assess the situation.
Six months after his initial botched invasion of democratic Ukraine, Russian President Vladimir Putin just signed a decree expanding the Kremlin’s military by 137,000. The new order, which goes into effect at the start of the calendar year, will raise the total number of uniformed Russian forces to over 1,150,000 troops, according to Dmitri Alperovitch, a Russian-born American computer security industry executive. Putin “is planning for the long war,” Alperovitch warned.
Inflation may remain “higher for longer,” St. Louis Fed President James Bullard said in an interview with CNBC’s Steve Liesman. “With an eight-handle on CPI, I think we’d be happy now to get going in the right direction. There will be a debate at some point about how long do you want to linger above 2%, and what do you have to do to get it down and actually hit the target. And I think that’s an important debate, but that’s out there in the future,” Bullard told Liesman at Jackson Hole, Wyoming.
CORN: December corn futures overnight reached $6.57 3/4 overnight and are up from $6.23 1/4 at the end of last week. Traders are watching near-term weather outlooks for the Midwest as they await the Pro Farmer Crop Tour’s U.S. yield and production estimates, to be released after today’s close.
SOYBEANS: November soybeans overnight fell as low as $14.26 1/2, just above support at the 10- and 20-day moving averages of $14.22 and $14.18 1/4, before climbing to gains above $14.40. The contract is poised for a solid weekly gain after ending last week at $14.04.
WHEAT: December SRW wheat traded in a narrow range overnight but is still on track for a firm gain this week after ending last week at $7.71.
LIVESTOCK CALLS
CATTLE: Steady-weaker
HOGS: Steady-weaker
CATTLE: Live cattle futures are heading for the market’s first down week in the past four amid softening cash prices. Live steers averaged $144.45 through Thursday morning, down about $2.43 from last week’s average. But the longer-term outlook for cattle prices appears supportive due to tight market-ready feedlot supplies, as reflected in February futures trading above $154 and April futures above $158. Beef demand appears to be holding up relatively well despite high retail prices, while the price spread between Choice and Select beef cutout values, at nearly $26, remains extremely wide for this time of year. Choice values rose 71 cents Thursday to $263.54 on strong movement of 154 loads.
October live cattle fell 12.5 cents Thursday to $143.65, the lowest closing price since Aug. 9 and down from $145.25 at the end of last week.
HOGS: Lean hog futures are poised for a second consecutive sharp weekly drop as cash fundamentals slip. The CME lean hog index is down $1.95 to $116.05, a drop of $3.13 over the past two days and the lowest level in nearly six weeks. However, October futures’ discount to the index, at nearly $25, is extremely wide, which may limit selling pressure. Pork cutout values fell 33 cents Thursday to $102.66, the lowest daily average since May 17. Movement was light at 254 loads. October lean hogs rose 72.5 cents Thursday to $91.10, down from $93.125 at the end of last week.