GRAIN CALLS
Corn: 12 to 15 cents higher.
Soybeans: 7 to 10 cents higher.
Wheat: 12 to 18 cents higher.
GENERAL COMMENTS: Soybean futures climbed overnight to the highest prices in over two weeks and corn also gained on concerns heat and dryness expected for the Midwest in early August will stress crops. Wheat futures also firmed. Malaysian palm oil futures rose 3.5%, gaining for a third straight session, while front-month crude oil futures were up around $2. U.S. stock index futures signal a weaker open, while the U.S. dollar index is up more than 150 points.
The U.S. economy contracted again in the second quarter, with gross domestic product falling at a 0.9% annualized rate, the Commerce Department said in its advance estimate today. The weaker-than- expected figure will further fuel concerns the economy has entered a recession, which is often defined as two consecutive quarterly declines in GDP. Economists polled by Reuters had forecast GDP rebounding at a 0.5% rate.
A couple waves of rains pushed across the central U.S. last night and continued this morning – one across northern areas and the other in southern locations. But traders are focused on heat and dryness during the first 10 days of August, as a high-pressure ridge is expected to form over the central U.S. and last through at least Aug. 8. The northwestern Corn Belt along with the Northern Plains “will be drier and warmer than usual during the coming 10 days,” World Weather Inc. said. “Crop moisture stress is expected to expand and intensify in these areas because of limited rain and warm to hot temperatures next week and into the following weekend.”
Scouts on Day 2 of the Wheat Quality Council’s annual spring wheat tour found an average HRS yield of 47.7 bu. per acre on routes through central and northern North Dakota, up from the five-year average of 37.9 bu. per acre on similar routes. But the crop’s lagging maturity, estimated by the North Dakota Wheat Commission to be two to three weeks behind normal, have raised some concerns that yields may fall short of expectations. Scouts will sample fields in northeast North Dakota and in bordering Minnesota counties today.
Wuhan, the central Chinese city that was the epicenter of the early Covid-19 outbreak, locked down a district of about 1 million people due to four asymptomatic cases, as the nation’s leaders maintain their zero tolerance toward the virus, a policy that has cast a shadow over both the national and global economies. It is the first time that Wuhan has imposed a restriction since late January 2020.
Bangladesh purchased 50,000 MT of optional origin milling wheat. Iran passed on a tender to buy 110,000 MT of milling wheat.
CORN: USDA reported net U.S. corn sales of 150,300 MT during the week ended July 21 for delivery during the 2021-22 marketing year, up from 33,900 MT the previous week. For 2022-23, net sales totaled 193,700 MT, primarily for Mexico (107,300 MT). New-crop sales fell short of trade expectations ranging from 200,000 to 625,000 MT.
December corn overnight reached $6.19 1/4, the contract’s highest intraday price since $6.23 3/4 on July 18.
SOYBEANS: USDA reported net weekly soybean sales reductions of 58,600 MT for 2021-22. This marked the fourth week in the past five with net old-crop sales reductions. For 2022-23, net weekly sales totaled 748,800 MT, primarily for China (538,000 MT) and “unknown destinations” (199,000 MT). New-crop sales easily topped expectations ranging from 100,000 to 500,000 MT.
November soybeans overnight rose to $14.34, the contract’s highest intraday price since $14.38 1/2 on July 11. The new-crop contract rallied 26 1/4 cents Wednesday, the fourth straight higher close.
WHEAT: USDA reported net weekly wheat sales of 412,000 MT for 2022-23, down 19% from the previous week and down 29% from the average for the previous four weeks. Sales were within trade expectations ranging from 250,000 to 625,000 MT.
LIVESTOCK CALLS
CATTLE: Steady-weaker
HOGS: Steady-firmer
CATTLE: Live cattle may face pressure from further erosion in the cash market. Cash cattle trade started around $135 in the Southern Plains and $225 in the Nebraska dressed market on Wednesday, down around $1 and $2, respectively, compared with last week. But pressure on futures should be limited with August live cattle trading more than $4 below last week’s average cash price of $141.12. Signs of solid beef demand may limit futures weakness. Choice beef cutout values fell $1.12 Wednesday to $267.99 but movement was strong at 146 loads. August live cattle fell 7.5 cents to $136.80, while October futures fell 5 cents to $142.325.
Net weekly U.S. beef sales totaled 25,300 MT for 2022, up 6% from the previous week and up 66% from the prior four-week average.
HOGS: Hog futures may extend gains on continued cash strength. The national direct cash hog price jumped $5.70 Wednesday, fueled by gains in the western Corn Belt. While hog numbers will build seasonally during the second half of the year, cash sources signal buyers are actively competing for supplies, which should keep the cash hog index climbing. The index is up another 25 cents to $119.73 (as of July 26). Pork cutout values rose 2 cents Wednesday to $126.79 on light movement of about 218 loads. August lean hogs rose $1.625 Wednesday to $118.60, while October futures surged $2.80 to $96.45, a three-month closing high.
USDA reported net U.S. pork sales of 21,600 MT for 2022, up 5% from the previous week but down 16% from the prior four-week average.