After the Bell: Corn, Soybeans Hold Steady After Big Washouts as Weather, Trade Lean Negative

Posted on 06/20/2018 3:16 PM

Corn:  Futures finished up 1/4 to 1/2 cent through the March contract. That was in the upper end of today’s range, but off session highs. Short-covering and bargain hunting were supportive of corn futures today, though corrective buyer interest was light. Prices did pop a bit late in the session on news reports President Donald Trump made some positive comments on the U.S. trade situation. However, traders remain cautious on the trade front. Buying interest in corn was limited today due to a lack of immediate weather threats for the Corn Belt. Demand for U.S. corn has been quite strong, with Asian buyers increasing their purchases on the price declines.

Soybeans: Futures saw two-sided trade today before settling in the upper half of today’s trading range and narrowly mixed. Old-crop futures ended steady to fractionally higher, while new-crop futures posted similar losses. Soybean futures enjoyed some light, corrective short-covering in the wake of yesterday’s pronounced selloff that took the front month to its lowest level in nearly a decade. But a tense and uncertain trade situation with China shows no sign of changing any time soon, which is keeping buyers away from the bean market. Adding to the negative tone is a generally positive weather situation, relatively high crop ratings and an elevated U.S. dollar index.

Wheat: SRW and HRW wheat futures closed higher and near session highs while the spring wheat contracts ended higher but in lower half of their daily ranges. SRW gained 6 ¼ to 10 ½ cents while HRW advanced 4 ½ to 6 ¾ cents. Spring wheat was up 2 ½ to 3 ¼ cents today.  The market advanced today on too much rain for collection of the U.S. winter wheat crop and hot, dry forecasts for European and Black Sea wheat regions. Rains will slowly dissipate next week across the central U.S., pushing more rain in parts of the drier U.S. and Canadian spring wheat belts. Basis continued to be steady to firm for HRW wheat as farmers have slowed new sales and are delivering only supplies to meet existing contracts. Weekly wheat export sales in the morning are seen from 250,000 to 500,000 MT compared with 302,349 MT a week earlier. Exports remain sluggish.

Cotton:  Prices saw a mixed finish with July futures down 11 points while the December contract rose 36 points. Old-crop futures were pressured by longs rolling to deferred contracts amid worries about cotton tariffs slowing remaining marketing-year shipments to China the next five weeks. There may be a new supplier for China cotton on the horizon should new U.S. import tariffs become effective July 6. A weak currency versus the dollar and lower freight costs may boost India’s exports to China to as much as 5 million bales, up five-fold from this season, according to India exporters. New-crop finds support on a drier outlook into early July in West Texas where more rain is still needed.

Hogs: Futures finished $1.775 to $2.575 lower through the December contract. August futures led today’s price plunge. Futures ended low-range. Hog futures were hit with heavy speculative-based selling today, as funds liquidated long positions. Much of the heavy price pressure today and earlier this week is tied to trade concerns as China is threatening to slap another 25% tariff on U.S. pork shipments as of July 6 if a trade deal isn’t reached. China also slapped a 25% tax on U.S. pork earlier this year.Additional pressure today came from weakness in the cash hog market, as the national average bid was 67 cents lower this morning.  

Cattle: Live cattle ended up 22 1/2 to 77 1/2 cents through the December contract, with August futures hitting a three-month high before retreating late. Feeder cattle futures finished narrowly mixed, ranging from 20 cents lower to 22 1/2 cents higher. Live cattle futures were supported in part by cash cattle trade on the Fed Cattle Exchange averaging $110.00 on good volume. That was better than the USDA reports of cash trade Wednesday in the Iowa/southern Minnesota market at mostly $108.00, but some at $109.00.  It’s our bias the cash cattle market will strengthen at least into mid-summer.


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