Corn Hangs Near Key Support Ahead of WASDE, Cattle Stuck in a Range, Energy Surges

Crop Progress

Corn: Good/excellent held at 61%, unchanged from last week and right in line with the trade estimate of 61% (range 60–62%). A neutral, no-surprise print.

Soybeans: Good/excellent eased to 62%, down a point from 63% last week and a point below the average trade estimate of 63% (range 62–64%) — landing at the bottom of the expected range. A modestly soft print.

Weekly Export Inspections

Weekly corn export inspections of 68.5 million bushels were above pre-report estimates. Cumulative corn inspections are up 25% from last year’s pace, which has analysts looking for an increase to the corn export demand forecast ahead of Wednesday’s USDA Supply/Demand report.

Soybean inspections of 14.7 mb were within pre-report expectations. Cumulative soybean inspections are down 18% from last year’s pace, close to the USDA’s expectation for a 20% decline.

Wheat inspections of 15.5 mb were within expectations. Cumulative wheat inspections are down 25% from last year’s pace while the USDA is calling for a 15% decline.

Flash Sale - Corn

The USDA reported an export flash sale this morning of 105,000 metric tons of corn to unknown destinations.

Grain and Oilseeds Wrap Up

Corn prices came off 4 cent overnight session gains when Monday’s action got underway and spent the rest of the day in an uneventful 3 cent range. The December contract has been glued to the low-$4.60 area lately, struggling to rally as the weather situation improves, but seeing major selling interest stay at bay thanks to solid demand and chances of a lower yield estimate. The combination of more favorable weather and the likelihood that a lot of old crop bushels still need to move could send prices lower, but we expect any downside movement from current price levels will be met with strong buying interest.

Soybean prices immediately backed off from 7 to 8 cent overnight gains when the daytime trade kicked off and had to fight to stay in positive territory. It looked good that prices wanted to hold above key short-term support around $11.70 last week, but better improving weather forecasts have limited upside excitement. It appears any short-term strength provides an opportunity to reduce upside exposure.

The wheat markets reached gains of nearly 20 cents in the early morning hours as reports continue to surface about reduced export capabilities in Russia and Ukraine while port attacks keep uncertainty high. Prices spent the day erasing the overnight gains as both the Chicago and KC market would end up near unchanged. The bulls need a breakout beyond $6.80 for any hope to get an uptrend going while support has so far been solid on moves towards $6.50.

Cattle

October live cattle reached gains of $2.50 around midday before backing off session highs by $1.00 ahead of the close. Cash markets ended last week at $235, which was up $2.00 from the week prior, while cutout values have suffered a pullback recently after flashing some strength to start the month. Price action looks like it could turn sideways for a little while, as bulls want to see better strength return to cash markets and the cutout value. Look to get defensive if another rally runs into stiff resistance around $230.

September feeders ended the session 80 to 90 cents and $2.00 off from their morning high while deferred contracts held onto early strength. The September contract is getting range-bound within the $340 to $350 zone, so plan accordingly for moves on both sides of the market.

Hogs

October hogs saw gains of more than $2.00 as prices again ran into strong support in the low-$80.00 area. It helped today that cutout values were jumping back above $102. The mostly sideways trend in the cash and cutout markets have made it difficult for prices to maintain strength, but it looks like moves down into the $80 to $82 zone offer a chance to add upside exposure.

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