GRAIN CALLS
Corn: 9 to 10 cents higher
Soybeans: 27 to 32 cents higher
Wheat: 14 to 24 cents higher
GENERAL COMMENTS: Corn and soybean futures rose overnight to the highest levels in nearly a week with a hot week ahead for the Midwest. Wheat futures rebounded from last week’s drop to five-month lows. Malaysian palm oil futures rallied 8.5%, the biggest daily rise in four months, even as Indonesia lifted its export levy on all palm oil products. Front-month U.S. crude oil futures are more than $3 higher. U.S. stock index futures signal at stronger open, while the U.S. dollar index is down more than 500 points.
The Plains and western Corn Belt are expected to experience extreme, crop-stressing heat this week, with daily highs in the 90s to 105 Fahrenheit through the weekend, World Weather Inc. said. Some relief will be possible during the second half of next week as temperatures cool and rain chances improve. The northern and eastern Midwest are expected to receive timely rainfall.
Funds continued to slash long exposure in the grain markets. Large speculators cut their bullish bets in the corn market by mid-July to the lowest level since October 2020, based on Commitments of Traders data from the Commodity Futures Trading Commission. The managed money net long fell 21,693 futures and options contracts during the week ending July 12 to 151,174 contracts. The managed money net long in soybeans fell to the lowest since December.
Finance ministers from the G20 concluded their meeting in Indonesia over the weekend without an agreement to cap the price of Russian oil, as the U.S. had proposed. Treasury Secretary Janet Yellen continues to push a global price cap on Russian oil exports, with a target around $50 a barrel.
Indonesia has scrapped its export levy for all palm oil products until Aug. 31 amid bulging inventories. Indonesia will have to export 6 MMT of palm oil through August if it wants to cut its ballooning inventory levels back to normal, an industry association said. The country’s trade minister said authorities will set a crude palm oil reference price every two weeks, instead of monthly, so tax rates could track price movements more quickly, including when they decline. It was unclear whether the decision had been approved or when it would be implemented.
Russian wheat export prices rose slightly last week, helped by a stronger ruble, IKAR agriculture consultancy said, adding that exports quickened with arrival of the new crop. Prices for wheat with 12.5% protein content and for supply from Black Sea ports rose by $2 to $360 per MT free on board (FOB) at the end of last week, IKAR said. Russia exported 500,000 MT of grain last week, compared with 340,000 MT the previous week, according to SovEcon.
Egypt tendered to buy an unspecified amount of wheat to be sourced from the U.S., Canada, Australia, Argentina or Brazil.
CORN: December corn futures overnight reached $6.15 3/4, the contract’s highest intraday price since July 12, after dropping 19 3/4 cents last week. Traders await USDA’s weekly crop ratings after today’s close. A week ago, USDA rated 64% of the U.S. corn crop in “good” or “excellent” condition as of July 10, unchanged from the previous week.
SOYBEANS: November soybeans overnight rose to $13.76 1/4, the highest since July 12, after sinking 54 1/4 cents last week. Continuing deterioration in USDA crop ratings could underpin prices. USDA rated the crop 62% “good” to “excellent” as of July 10, down one percentage point from the previous week.
WHEAT: September SRW wheat reached $8.03 3/4 overnight after plunging $1.14 3/4 last week.
LIVESTOCK CALLS
CATTLE: Steady-weaker
HOGS: Steady-firmer
CATTLE: Live cattle futures may face pressure from an eroding cash market. USDA-reported live steers averaged $142.09 through Friday morning, down from the previous week’s average of $144.35. Much of the decline was driven by the northern market, where tight supplies had boosted prices recently. Traders await USDA’s monthly Cattle on Feed and biannual Cattle Inventory Reports Friday, and will gauge the monthly Cold Storage Report, also July 22, for indications of how demand is lining up with supplies. August live cattle ending last week at $134.925, up 97.5 cents on the week.
HOGS: Lean hog futures may gain support from continued strength in cash fundamentals. The CME lean hog index is up 76 cents to $114.15 (as of July 14), the highest in nearly 13 months. August lean hog futures assumed lead-month status with the expiration of the July contract last Friday at a $4.325 discount to today’s cash index quote. That would be a slightly greater-than-normal seasonal decline in prices into mid-August, signaling traders feel the cash index is likely to top soon. August lean hog futures ended Friday at $109.825, up 65 cents for the week.
China imported 120,000 MT of pork in June, down 10,000 MT (7.7%) from May and 64.2% less than last year. Through the first half of this year, China’s pork imports at 800,000 MT fell 65.1% from the same period last year.