Pro Farmer Market Snapshot: Corn Starts Week Off 2-4 Cent

Pro Farmer ( Pro Farmer )

10:30 a.m. Market Snapshot

Corn futures are 2 to 4 cents lower to start the week, which is off overnight lows.

  • Rains fell across much of the Midwest over the weekend, including some of the driest areas of the Midwest. That is keeping the market in negative territory.
  • But reports of many unplanted fields and some low yield reports from the early hours of the Pro Farmer Midwest Crop Tour has helped the market move off its overnight lows.
  • Equities are off to a stronger start to the week, as Sunday protests in Hong Kong were large but generally peaceful and the Trump administration said it will extend a temporary license enabling Huawei to continue working with U.S. customers.
  • The U.S. inspected 510,334 MT of corn for export the week ending Aug. 15. That was roughly half last year’s total for this week and below expectations, reminding of the corn market’s demand struggles.

Soybeans remain under pressure, but futures have moved off its lows to trade 3 to 5 cents lower.

  • Rains over the weekend are pressuring the bean market as August is typically the key development month for the bean crop. Historic planting delays mean that timeframe could be a bit different for some producers this year.
  • But this is countered by some low pod counts as scouts on our crop tour move through South Dakota and Ohio.
  • Soybean export inspections totaled 1.158 MMT the week ending Aug. 15, which was nearly double last year’s tally and a bit higher than analysts expected. But the market has a long ways to go to make up for disappointing shipments earlier in the season.
  • The trade war read is swinging a bit positive to start the week, though the market is now well aware that can change very quickly.

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Winter wheat futures are down 2 to 4 cents, with spring wheat 1 to 2 cents lower.

  • Exports have been a bright spot for the wheat market. Today, Morocco launched a tender to buy 576,000 MT of milling wheat and 345,455 MT of durum wheat from the U.S. via its preferential tariff quota.
  • Export inspections totaled 488,905 MT for the week ending Aug. 15, which was in line with year-ago and expectations.
  • Harvest of the spring wheat crop is underway, and with that comes some related hedge pressure.

Live cattle are moderately higher, paring a portion of this week’s sharp declines. Feeders are higher but near session lows.  

  • Corrective short-covering is lifting the cattle complex today, as the market likely overdid it to the downside in reacting to the Tyson Foods processing plant fire last week.
  • Surging product prices are also lifting futures. Choice and Select boxed beef values shot $2.57 and $2.59 higher on Friday, respectively. Choice values have climbed more than $22 over the past week and Select is up more than $19.
  • Packer profit margins are also soaring thanks to rising beef prices and falling cash bids. LLC reports packers are earning $378.25 a head, a $221.55 surge from week-ago.
  • Packers were able to secure cattle for lower prices of $105 to $109 last week, but the surge in margins means demand should be strong this week and other plants are expected to ramp up production to make up for the downed Tyson plant. That could help cash prices to stabilize or even turn higher this week.

Lean hog futures posting gains of 70 cents to $1.50, with nearbys leading to the upside.

  • Lean hog futures are posting solid gains to start the week as traders cover short positions in the wake of Friday’s plunge. Futures have retraced around half of Friday’s losses.
  • Gains in the live cattle complex are lending some spillover support.
  • Expensive beef prices could improve demand for pork heading into Labor Day. But the pork cutout value dropped $1.97 on Friday.
  • Hog packers are also enjoying strong processing margins of $24.50 a head. And last week’s kill was up a fairly modest 1.5% from year-ago.
  • Cash hog bids have been mixed of late, but prices dipped 49 cents on a national average basis on Friday, with lower bids in the eastern Corn Belt offsetting firmer prices in the west.
  • An undisclosed number of hogs have died in the Philippines and the region is currently running tests to determine the cause. African swine fever is likely the culprit.