After the Bell: Beneficial Global Weather, Disappointing Exports Pressure Soy, Grains

Posted on 10/18/2018 3:32 PM

Corn: Corn futures slipped 2 3/4 to 3 ½ cents and ended in the bottom half of the daily price range.  Corn prices were defensive from open to close amid improving U.S. harvest weather and beneficial rains for early crop development in South America. Weekly export sales this morning were a big disappointment and prices eroded to session lows after trading resumed this morning. USDA said export sales in the week ended Oct. 11 tumbled to 382,500 MT, down 72% from the prior four-week average. Traders were looking for sales of 800,000 MT to 1.3 MMT last week. Drier weather and warming temperatures should firm fields and increase harvesting this week and into next week. Some increase in commercial hedge selling pressure is expected with accelerating harvest.

Soybeans: Soybean futures were sharply lower today, closing near session lows and down around 22 cents in the nearby contracts. Traders today were reminded of the serious damage to U.S. soybean exports caused by the U.S.-China trade war. According to a report from Reuters, China's soybean imports may drop 25% in the fourth quarter--the biggest drop in at least 12 years. Chinese soybean imports will likely decline to around 18 million MT to 20 million MT in the last three months of 2018, compared with 24.1 million MT in imports the same period last year, according to Reuters. Weekly USDA export sales in the latest week fell to 293,566 MT from 439,651 a week earlier, amid a sharp increase in net reductions for unknown destinations. Sales fell far short of trade estimates calling for 600,000 MT to 1.0 million MT.

Wheat: Wheat futures faced followthrough selling after the market’s disappointing finish Wednesday. SRW wheat settled 2 to 4 ½ cents lower, with nearbys leading the decline. HRW wheat closed 5 to 6 ¼ cents lower. And spring wheat futures posted losses of roughly 2 to 3 cents. SRW wheat futures dropped below the 40-day moving average yesterday and the market faced followthrough selling today. Wheat is not a leader this season and heavy losses in soybeans alongside softer trade in the corn market added pressure to wheat.While wheat export sales were decent at 476,000 MT the week ending Oct. 11, especially considering the time of the year, stronger numbers are needed to convince the market that the U.S. is stepping up shipments of the grain as Russian, Australian and EU supplies dwindle.

Cotton: Cotton futures posted slight gains of 4 to 15 points and finished near mid-range today. Today’s weekly USDA export sales report showed U.S. sales of 32,700 running bales--down 67% from the previous week and down 55% from the previous four-week average. Shipments of 135,400 running bales were down 25% from the previous week and down 20% from the four-week average.

Hogs: Lean hog futures posted losses of $1.30 to $2.40 through the June contract and finished near session lows. Winter-month contracts led today’s losses. Lean hog futures faced pressure from falling cash hog bids. December hogs widened their already-large discount to the cash market, signaling traders anticipate heavy pressure on cash prices through fall. Chart-based selling also weighed on the market today, with sell stops triggered on the drop through support levels.

Cattle: October live cattle settled slightly higher after rebounding from a six-session low. December through April live cattle futures were fractionally lower but pared earlier losses and finished in the upper half of today’s range. November feeders rallied $1.0725 to settle at $154.425 after touching the lowest level since Sept. 12. After two days of solid sales, packers were able to raise wholesale beef prices Thursday and movement continued moderately active at midday. Choice beef carcass values rose $2.20 and Select gained $1.25 today. Slaughter this week is 467,000 head up 1,000 from a year ago and 1,000 less than last week. There has been some light cash cattle action between $109 and $111 in Nebraska and Iowa, with the bulk of action taking place at prices steady with the upper end of last week’s action. Beef export sales totaled 13,100 MT for 2018 and 2,300 MT for 2019 in the week ending Oct. 11, with the 2018 sales dipping 15% from the prior four-week average.

Add new comment