Grain futures mixed to start the last trading day of the week.
Grain futures are mixed this morning after a higher move overnight, on a recovery in crude oil and index pricing in the evening. Morning declines in crude oil to fresh quarterly lows pulled corn back lower along with soybeans on continued liquidation on the breach of the 50-day moving averages for corn and soybeans yesterday, along with soybeans violating its 100-day moving average. Technical selling is currently the key interest with oil pricing looking to find a low today or Monday during our key change-in-trend date. The fundamentals longer-term for the grain markets are bullish. Still, it does not make the markets immune to the short periods of chart-based technical selling that offers end-user opportunities. Record low stock/use ratios for world wheat, corn and vegoils will spark new rally highs once the Central US row crop harvest is underway.
The Pro Farmer Tour estimated the Iowa corn yield at 190.3 BPA compared to NASS at 193 BPA and the Minnesota corn yield at 177.4 BPA, which is well above NASS at 166 BPA. The big disappointment of this week's PF Tour was the Illinois corn yield at 196 BPA. The PF Tour hints at a September US corn yield of 173-174 BPA which helps validate the NASS August estimate. Based on August fill weather, kernel depth is expected to be slightly less than normal. Pro Farmer will be out with their US corn yield estimate later today. Crop ratings are anticipated to be lower again for corn and soybeans on Monday by 1-2%.
ADM and Marathon Petroleum formed a JV to use soyoil that will be exclusively to produce renewable diesel. The N Dakota plant plans to open in 2023.
Again, the weather models are at odds of where upcoming rains fall outside of they all have the Dakotas receiving rain this weekend. The EU model maintains a below normal rainfall pattern for most of the Midwest and the S. Plains. Ill-defined rain occurs beyond the next 6-7 days. For key states like Iowa and Illinois, the best chances for rain does not occur until the last three days of August. This means that US crop conditions in both states could slip. The best rains are forecast to drop across the Dakotas and W Nebraska this weekend where totals will range from .5-2.00″. Much of Kansas and Missouri miss the rain into September. Iowa/Illinois, and Indiana rains occur closer to the end of August with amounts in a range of .25-1.00″. August is going to end to be a drier/warmer than normal month for the Central US. Warmth returns in the 10-15 day period as a high-pressure Ridge rebuilds across the western US once again.
Cattle futures closed lower yesterday as the bulk of all commodity markets did from across the sector commodity fund liquidation. Thursday's cash trade was steady with Wednesday and $1-2 higher for the week at $122 in the south and $126 in the north. Boxed beef prices continued to gain with choice up $1.55/cwt and select rose $6.61. The August Livestock Slaughter report showed the July cattle kill was down 3% from last year at 2.85 Mil head. The steer/heifer slaughter was at 95% of a year ago versus estimates for CoF marketings at 97%. Carcass weights averaged 863 Lbs or 13 Lbs less than last year. Commercial beef production was 96% of last year and the smallest for July in four years. Despite the lite production, cumulative beef production for the year is 105% of a year ago and record large.
The Cattle On Feed Report is out this afternoon at 2 PM. Expectations for on feed is 98.3, placed 93.2, marketed at 96.5.