Grain futures are mixed Thursday morning.
Row crop futures softened overnight after a three-day recovery rally that had corn and soybeans challenging their 50 in near 100-day moving averages. Technical resistance caused a pause in overnight trade. Wheat futures firmed along with French milling wheat as the recent break sparks new end-user interest after a hiatus for two weeks. Tuesday morning, August 30, is Stats Canada release of their crop size projections.
South Korea booked 135,000 MTs of optional corn, with the US included as a source. This was the 1st time in months that US corn could again be flowing to South Korea, which confirmed the US’s newfound competitiveness. Belarus has banned grain exports for six months following a weather reduced harvest of only 6.2 MMTs. The ban applies to wheat, rye, corn, and other small grains. Belarus is a small world grain exporter during times of surplus.
There is a mixed tone to the financial world as Fed chairman Powell prepares for the Jackson Hole meeting now through Friday, which will be done online. Market analysts are looking for clues to where the central bank will start tapering US bond purchases and whether it will be late 2022 or wait until 2023. As always, were anticipating a vague statement that will be justice transitory as his statements on inflation.
According to producers, Midwest crops are quickly maturing, with most commercial firms trimming their yield estimates due to the recent heat/dryness. US ear/pod weights are always a big determinate to yield, and that data won’t be known for a few more weeks as the S Midwest harvest starts. China continues to secure US soybeans on a near-daily basis, just at levels below a year ago.
A hurricane is expected to strike the Gulf Coast States of Louisiana/ Mississippi late Sunday or early Monday. One of the models has a major hurricane, while others have it as a category 1 or 2. Either way, flooding rains and strong gusty winds will cause problems for unharvested crops along the Gulf Coast. Louisiana rainfall is estimated in a range of 4-10.00” with the path of heavy rain carving thru the Tennessee Valley before exiting the US via Virginia. This storm needs to be closely followed as there is a 90% chance of development by the weekend. A series of storm systems will ride a southward sliding jet stream across the Canadian Prairies, North Dakota, Minnesota, and Wisconsin. Rain totals here will range from 1-3.00” and add to soybean seed size across the Lake States. Some of that moisture leaks into N Illinois and N Indiana. Near to above normal temperatures will push US corn/soybean crop maturity with highs ranging from the mid 80’s to the lower 90’s for the next 5-6 days.
The cash cattle market continues to be mostly untraded through the middle of the week on light demand. Cattle feeders remain optimistic for the show list to sell $2-$3 higher this week with beef prices at historic levels. Boxed beef values inched lower on Wednesday. The choice-value slipped $.69, and select was $1.21 lower. While the choice carcass was down, the rib value and wholesale ribeye prices continued to new record highs. Wholesale ribeyes sold for $14.74/Lb on Wednesday, $6.21 higher than a year ago and nearly $7 over the 5-year average. A market top and significant correction is likely near for the box beef. The question is, will the Packers want to save their precious large margins and as the boxed beef declines and remove recent bids? Until we get into late fall/early winter, packers have a strong captive supply on numbers that start to become thinner as placements reflect a tightening herd into the winter, forcing the Packer into the market for more livestock. We have recommended hedging into the recent breakout to new highs in October, December, February, and April.