GRAIN CALLS
Corn: 7 to 10 cents higher.
Soybeans: 7 to 9 cents lower.
Wheat: Steady to 3 cents higher.
GENERAL COMMENTS: December corn futures overnight extended a rally to two-month highs after Pro Farmer estimated the U.S. crop at the smallest in three years, reflecting drought and heat damage. Soybeans fell while wheat was mostly firmer. Malaysian palm oil futures were steady as traders factored in higher export taxes in top producer Indonesia and expectations of rising supplies. Front-month crude oil rose nearly $1. U.S. stock index futures signal a weaker open, while the U.S. dollar index is around 100 points lower.
Weekend rains reached much of the Midwest, with Wisconsin and southeastern Minnesota receiving the greatest amounts and central Iowa into parts of eastern Kansas also getting moisture. Some showers are expected early this week across the central and eastern Corn Belt before drier conditions move in for about 10 days. The Southern Plains are expected to receive frequent rains this week.
Wheat production in Canada rose 55% in 2022 compared to 2021, while canola production was up by 42%, according to Statistics Canada, citing satellite and agroclimatic data. It estimated Canadian all-wheat production at 34.6 MMT and the canola crop at 19.5 MMT. Stats Canada said higher-than-average precipitation and more moderate temperatures have resulted in better crop conditions on the Prairies than in 2021, though dry conditions continue to be a concern for much of Saskatchewan.
The U.S. Navy on Sunday sent two guided-missile cruisers through the Taiwan Strait, which China now claims as its “internal waters.” The U.S. and others maintain the strait is international waters under the United Nations Convention on the Law of the Sea. The USS Chancellorsville and USS Antietam, a pair of guided-missile cruisers, sailed in international waters between Taiwan and the Chinese mainland. “The ship’s transit through the Taiwan Strait demonstrates the United States’ commitment to a free and open Indo-Pacific,” the U.S. Navy said in a statement. “The United States military flies, sails, and operates anywhere international law allows.”
More than 1 MMT of grains and other foods have so far been exported from Ukrainian ports since a deal was signed to resume shipments. However, millions of metric tons of grains from previous years still need to be cleared to make room for this year’s harvest, the United Nations coordinator for the grains export deal said. Since July 1, Ukraine has exported 3.6 MMT of grains, according to the country’s ag ministry, down 53% from the same period last year. Exports included 2.33 MMT of corn, 981,000 MT of wheat and 289,000 MT of barley.
Kazakhstan plans to scrap wheat and flour export quotas next month, Agriculture Minister Yerbol Karashukeyev said. The country introduced the export limits in May to keep the local market stocked and cool inflation linked to rising global food prices.
Indonesia will set its crude palm oil (CPO) reference price for Sept. 1-15 at $930.02 per MT, up from $900.52 per metric ton for Aug. 16-31, senior economic ministry official Musdhalifah Machmud told Reuters. The price reference would put Indonesia’s CPO export tax at $124 per metric ton for the period, up from the current $74 per metric ton. Indonesia also extended its export levy waiver until Oct. 31.
Indonesia has raised its 2022 biodiesel allocation to 11.03 million kilolitres amid expectations of rising demand in the fourth quarter while it extends an export levy waiver to maintain price stability, a senior minister said today. The allocation of biodiesel, which is made from palm oil in Indonesia, will be increased from 10.15 million kilolitres.
Large speculators increased their bullish bets in the corn market for the fourth consecutive week and also boosted bullish positions in soybeans, data from the Commodity Futures Trading Commission showed. The managed money net long rose 28,376 futures and options contracts during the week ended Aug. 23 to 182,216 contracts, the largest since the end of July. In SRW wheat, large speculators expanded a net short position to the largest since mid-February.
Algeria tendered to buy a nominal 50,000 MT of optional origin soft milling wheat.
CORN: December corn futures overnight reached $6.74 3/4, the contract’s highest intraday price since $6.76 1/2 on June 24. After Friday’s close, Pro Farmer said it estimated 2022 U.S. corn production at 13.759 billion bu. and average yield at 168.1 bu. per acre. Traders await USDA’s weekly crop condition update after today’s close. A week ago, USDA reported the U.S. corn crop 55% in “good” or “excellent” condition as of Aug 21, down from 57% a week earlier.
SOYBEANS: November soybeans overnight fell as low as $14.40 1/4 after ending last week at $14.61 1/4, a gain of 57 cents for the week and the contract’s highest close since July 29. Pro Farmer estimated the 2022 U.S. soybean crop at 4.535 billion bu. and the average yield at 51.7 bu. per acre.
WHEAT: December SRW wheat overnight rose as high as $8.14 1/2, after ending last week at $8.05 1/4, up 34 1/4 cents for the week.
LIVESTOCK CALLS
CATTLE: Steady-weaker
HOGS: Steady-weaker
CATTLE: Live cattle futures may face pressure to start the week after cash and wholesale beef markets slipped last week. Traders come into the week not knowing what to expect from the cash cattle market. While market-ready supplies are tightening and feedlots are current on marketings, packers were rather passive buyers last week. This week’s cash cattle trade isn’t likely to turn active until midweek or later. Live steers averaged $144.54 through Friday morning, down $2.34 from the previous week’s average and breaking a run of three consecutive weekly gains. Choice beef cutout values fell 78 cents Friday to $262.76, down $1.52 for the week. Movement totaled 101 loads.
October live cattle fell 60 cents to $143.05, down $2.20 for the week and the lowest close since Aug. 2. September feeders fell $2.05 to $182.20, down $2.55 for the week.
HOGS: Lean hog futures may extend last week’s declines as cash fundamentals weaken. The CME lean hog index is down $2.73 today (as of Aug. 25) to $113.32, the lowest since July 12 and nearly $9 below the early August seasonal peak. October futures finished Friday $22.67 below that level. While the cash index downturn is accelerating, that wide of a discount signals traders are overly pessimistic. Pork cutout values fell 43 cents Friday to $102.23, down nearly $15 for the week, but movement was strong at 330.5 loads. October lean hogs fell 45 cents to $90.65, down $2.475 for the week.
China’s state planner said it will release pork reserves from September to ensure meat supply during upcoming holidays when demand typically increases. Pork prices have risen rapidly in recent months amid tighter supplies. Also, China’s sow herd at the end of July totaled 42.98 million head, according to the country’s ag ministry, up 0.5% from June but down 5.3% from last year.