GRAIN CALLS
Corn: 10 to 12 cents lower.
Soybeans: 25 to 27 cents lower.
Wheat: 12 to 17 cents lower.
GENERAL COMMENTS: November soybean futures overnight fell to the lowest levels in over a week after USDA’s weekly crop ratings didn’t show the expected decline. Corn fell from a two-month high and wheat also dropped. Malaysian palm oil futures fell 1% to lock in a fourth straight monthly decline amid growing expectations for improved production. Front-month crude oil fell more than $2. U.S. stock index futures signal a stronger open, while the U.S. dollar index is more than 200 points lower.
USDA reported a sale of 264,000 MT of soybeans for delivery to “unknown destinations” during the 2022-23 marketing year. Today’s announcement follows three daily soybean sales totaling 773,000 MT to China and unknown destinations last week.
Weather in the U.S. Northern and Central Plains and western Corn Belt will be dry biased the next 10 days, allowing “good spring and summer crop maturation and harvest progress to continue,” World Weather Inc. said. The eastern Midwest drier is expected to be drier-biased the next seven days. West Texas received more rain overnight ranging from 0.30 to 1.43 inches.
Crop Consultant Dr. Michael Cordonnier cut his U.S. corn yield forecast by 3 bu. to 170 bu. per acre, citing declining in crop condition ratings, persistent dry conditions in the western Corn Belt and lower yield outlooks from recent crop tours, including ours. It’s unlikely any improvement in weather will add any significant yield to corn, he said, though it could keep the crop from deteriorating further. He lowered his corn production estimate to 13.82 billion bu. from 14.07 billion bu. Cordonnier kept his soybean yield and production estimates at 50.5 bu. per acre and 4.40 billion bushels, respectively.
Another six ships carrying a total of 183,000 MT of agricultural products left Ukraine’s Black Sea ports today, bringing the running totals to 61 vessels and around 1.5 MMT since grain shipments resumed Aug. 1. The Ukrainian grain traders union said corn accounted for 62% of the total volume shipped. Wheat accounted for 17% and barley for 6%.
Consultancy Agritel on Tuesday increased slightly its estimate of this year’s French soft wheat crop but warned the European Union’s top grain producer was heading for its worst corn harvest this century. It put the 2022 soft wheat crop at 33.63 MMT, up from 33.44 MMT projected a month ago but still below the average of the past five years.
USDA said Monday weekly export sales data would not be available until further notice, suggesting the technical issues that caused it to retract last week’s data haven’t been resolved.
A group of large U.S. freight railroads has reached tentative agreements with unions representing more than 15,000 workers, a step to avoid a widespread strike after years of failed labor talks. The deals with three of the 12 rail unions come several weeks after a mediation board appointed by the White House issued recommendations including wage increases and expanded health coverage.
South Korea purchased 137,000 MT of corn that is expected to be sourced from South America and/or South Africa and 30,000 MT of optional origin non-GMO soybeans. Japan is seeking 95,497 MT of milling wheat in its weekly tender. The Philippines tendered to buy 100,000 MT of feed wheat from unspecified origins.
CORN: USDA Monday afternoon reported 54% of the U.S. corn crop in “good” or “excellent” condition as of Sunday, down from 55% the previous week and meeting analysts’ expectations. When USDA’s weekly 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 dropped another 2.6 points – the seventh straight weekly decline – to 342.11, the lowest corn CCI rating for late August since 2013.
December fell as low as $6.71 overnight after rallying 18 3/4 cents Monday to $6.83, the contract’s highest closing price since June 22.
SOYBEANS: USDA rated 57% of the U.S. soybean crop “ good” to “excellent” as of Sunday, unchanged from a week earlier and better than expectations for 56%. Four percent of the crop was dropping leaves, compared to the 7% average for the previous five years. Based on the Pro Farmer CCI, the soybean crop dropped 0.6 point to 345.84 – the fourth straight weekly decline. November soybeans overnight fell to $14.10 1/2, the lowest intraday price since Aug. 22.
WHEAT: USDA reported 52% of the U.S. spring wheat harvest was complete as of Sunday, up from 33% a week earlier and meeting expectations. Winter wheat’s recent chart strength suggests the market may have established a near-term bottom. December SRW wheat overnight fell as low as $8.06 1/4 after rising 37 1/2 cents Monday to $8.42 3/4, a four-week closing high.
LIVESTOCK CALLS
CATTLE: Steady-weaker
HOGS: Steady-weaker
CATTLE: Live cattle futures could face pressure from expectations for further cash weakness, but declines in corn prices may support feeders. Live steers averaged $144.79 last week, down $2.34 from the previous week’s average and ending a run of three consecutive weekly gains. Packers will be buying cattle for a shortened slaughter schedule next week and also have new contract supplies for September available on Thursday, meaning demand for negotiated animals may remain limited and offsetting firm consumer demand that’s absorbing heavy slaughter rates, which reached the highest of the year last week. October live cattle fell 15 cents Monday to $142.90, the contract’s lowest closing price since Aug. 2.
HOGS: Lean hog futures may gain support from followthrough corrective buying from Monday’s strong close and the market’s steep discount to cash benchmarks. The CME lean hog index is down another $2.06 to $111.26 (as of Aug. 26), the lowest since July 12. But even with the drop in the index, October futures still finished at a $19.01 discount, which should help limit near-term selling interest. October lean hogs rose $1.60 Monday to $92.25.
Tyson Foods’ pork processing plant in Logansport, Indiana, has been suspended from exporting products to China, USDA announced. No reason was given by USDA or Tyson for the suspension, which started Monday. The move follows Beijing’s halt on shipments of meat products from two other U.S. plants in the past month or so, citing the presence of ractopamine, a feed additive used in the U.S. but banned by China. The Tyson suspension shouldn’t have much impact on the meat trade between the two countries as there are still a lot of U.S. plants eligible to export to China.