Soybeans advance on late-month heat prospects.
Grain futures were mixed overnight, with soybeans leading the advance on short covering after finding value under $13.00 and the prospects of some extreme heat in the 9-15 day forecast, while wheat softened on any lack of further attacks on infrastructure in the Ukraine/Russian port areas. Tuesday’s open interest data showed corn interest dropping 7,379 contracts, soybeans off 1,546 contracts while Chicago wheat is down 997 contracts volume trading is declining rapidly ahead of Friday’s USDA report. That means intraday volatility remains high.
September Dalian corn futures rose 9 cents yesterday to $9.93, while the Dalian September meal rose $6.70/MT to $617.20/MT. These are the highest spot prices in several years. The Chinese import margin on world corn/sorghum is the largest since late 2020, while Chinese crush margins are deep in the green as China has been extremely active in booking and shipping Brazilian corn from August through October. Meal values advance. Chinese crop losses are mounting due to the Mongolian drought and their acute Hebei flooding.
India announced that they will provide 5 MMT of wheat and 2.5 MMT of rice from government reserves to domestic bulk customers to help cool prices. They’re also expected to cut their duty on wheat from 40% down to 0-15% in the southern consumption areas. Indian rice prices are at the highest level since 2008. The Indian monsoon is dwindling quickly, and it could be withdrawing prematurely. Imports of Indian wheat could climb to near 10 MMTs this winter.
August USDA Crop Production/Supply & Demand Report on Friday, with analysts estimating a reduction in corn yield estimate to 175.5 bpa from 177.5 bpa and beans to 51.2 bpa from 52.0 bpa. NASS said it will review all available data, including survey data, and if changes are justified for acreage numbers of planted and harvested barley, oats, Durum wheat, spring wheat, and winter wheat, they will publish changes in the Friday USDA Report.
The various weather models of GFS/EU/Canadian forecasts are in agreement that a stormy. As ahead for the Midwest over the next 60-72 hours, then an extreme period of dryness with heat returning in the 9-14 day period. This is because of a high-pressure Ridge amplifying north and east across the Plains and extending into Illinois. The heat from the late-summer Ridge is anticipated to return for now and looks to persist for 5-7 days before retreats.
The live cattle trade was weak on Tuesday again, while cash markets were untraded in all regions. Packer bids are expected to start lower, and feed yards will be looking to sell $one-three higher for the week. Box beef values did firm with the choice cutout advancing $0.90 to $302.39, while select picked up $1.15 at $276.16. Typically, box beef prices bottomed out in late July/early August and strengthened into the fourth quarter. A year ago, the beef values continued to weaken into the end of August and then rallied into the fourth quarter. Momentum has stalled in cattle, and funds are bullish. A break of under 178 on the October contract could set off technical liquidation.