Ahead of the Open | August 4, 2021

Ahead of the Open | August 4, 2021 Wheat seen higher on smaller global harvest outlook, corn and soybeans steady-higher.

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Pro Farmer’s Ahead of the Open
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GRAIN CALLS

Corn: Steady to 1 cent higher.

Soybeans: 2 to 5 cents higher.

Wheat: Steady to 7 cents higher.

GENERAL COMMENTS:

Corn finished steady to fractionally higher overnight while soybean futures rose after yesterday’ sharp declines. Wheat futures traded mostly higher overnight on a reduced global harvest outlook. Nymex crude oil futures are down more than 1% and the U.S. dollar index is also weaker this morning.

Last night’s GFS model run decreased rainfall in eastern Iowa, northwestern Illinois, southern Wisconsin, Ohio, North Carolina and Virginia Sunday into next Tuesday, World Weather Inc. said in a report. Projections for an unusually cool air mass to move into the Corn Belt and HRW wheat regions and stall was overdone, but there are rain chances across the Corn Belt Aug. 13-15.

Brazil will likely export 6.5 million metric tons (MMT) of soybeans during August and 1.1 MMT of soymeal, based on a forecast from ANEX, an association of grain exporters. That would be a slowdown in soybean exports from the 8.4 MMT the association’s estimate for July. ANEC projects corn exports to rise from 3.2 MMT in July to 4.0 MMT in August.

In overnight demand news, Pakistan tendered to buy 400,000 MT of wheat from optional origins. Turkey canceled a tender to buy around 515,000 MT of animal feed barley, but bought an initial 150,000 MT of wheat out of the 395,000 MT it was seeking. Algeria’s state grains agency reportedly bought around 150,000 MT to 200,000 MT of optional origin milling wheat in an international tender.

CORN: StoneX estimated U.S. corn yields at an average of 176.9 bu. per acre for a 14.945 billion bu. crop, based on customer surveys and the firm’s analysis. In July, USDA projected the U.S. corn yield at 179.5 bu. per acre for a 15.165 billion bu. crop. December corn held in a tight range overnight after ranging between $5.65 1/4 and $5.47 1/4 on Tuesday.

SOYBEANS: StoneX expects the U.S. soybean crop to total 4.332 billion bu. on an average yield of 50 bu. per acre. USDA projected a trendline yield of 50.8 bu. per acre and a 4.405 billion bu. crop in July. USDA releases its first survey-based estimate in the Aug. 12 Crop Production Report. November soybeans held within a tight range overnight after dropping near a four-week intraday low at $13.08 3/4 yesterday.

WHEAT: France’s farm ministry has lowered its soft wheat crop estimate from 37.10 MMT to 36.69 MMT, which would still be a 26% jump from last year’s weather-battered crop and a 10% rise versus the five-year average. Heavy summer rains have raised concern about grain quality and pared crop prospects. France is the European Union’s biggest wheat producer.

CATTLE: Steady-firm

HOGS: Steady-firm

CATTLE: Firm cash market fundamentals should underpin cattle futures. Choice cutout values yesterday averaged $285.84, up $4.84 from Monday and the 10th consecutive daily gain since the market hit a 3 1/2-month low in late July, USDA data showed. Live steers in top feedlot regions averaged $125, up over $3 from last week’s average. Cash cattle trade picked up in the Iowa market around $125 and Nebraska saw trade at $124. Packer profit margins rose to over $559 a head, according to HedgersEdge.com. Cattle slaughter through yesterday totaled 649,000 head, down from 652,000 at that point last week.

HOGS: Pork cutout values yesterday fell $1.04 to $127.67, after rising near two-month highs earlier this week. The decline was driven by a drop of nearly $19 in hams. Carcasses on national direct markets averaged $100.40, down 60 cents from Monday. The CME lean hog index projected at $111.59, down 63 cents from the day prior and roughly $1.50 above August futures. Meatpackers ramped up slaughter yesterday after a slow start to the week. Hog slaughter so far this week was an estimated 883,000 head, down from 937,000 head at this point last week and down from 891,000 for the same period last year.