Corn: After trading in the red most of the overnight session, prices rebounded in early U.S. trading and closed near session highs. December corn rose 4 cents to close at $3.65, capping the first four-day rally since May 23. Corn export sales were stronger than expected in the week ended July 12, with old-crop sales totaling 641,000 MT and new-crop sales coming in at 774,500 MT. Gulf basis bids firmed 1 to 4 cents today, a change from softer basis the past three days, as futures rose. The Buenos Aires Grain Exchange cut its corn crop forecast to 31 MMT from 32 MMT previously, further signaling more demand for U.S. supplies. Welcome rains are moving across parts of the Midwest today. Traders will monitor accumulation and how widespread the event is, as some areas need a quick soil-moisture recharge. Cooler temperatures have been widespread across the Midwest this week, with some forecasts now suggesting a warming trend next week. Funds continue to modestly reduce their net short position, which had grown to a record for this time of year.
Soybeans: Futures closed up 3 to 4 cents and near their daily highs today. Soybeans finished with modest gains today on additional short-covering and some perceived value buying. Funds covered short positions for a fourth consecutive day, signaling an extended price correction may be in the works after the prolonged price plunge. Weekly USDA export sales data showed soybean sales of 252,300 metric tons (MT) for 2017-18 that were near the lower end of expectations, but sales of 613,400 MT for 2018-19 the week ended July 12 topped expectations. Also of note, weekly soymeal exports hit a marketing-year high in today’s report. Preliminary trade data from Japan today showed that country increased its U.S. soybean purchases 6.2% last month, to 157,467 MT, reminding that nations other than China have been buying bargain-priced U.S. soybeans at a record-setting pace. Weather in the Corn Belt remains non-threatening, with the near-term forecasts calling for decent chances for rainfall in the region, with moderate temperatures. The weather patterns in the Corn Belt continue to favor the bean market bears heading into the critical growing month of August, though this morning’s long-range forecasts from the National Weather Service signal above-normal temps are likely across all but the northwestern Corn Belt the remainder of the growing season. There has been more negative rhetoric coming from both sides in the U.S./China trade dispute, with no signs of an early end coming to the present trade tariffs the countries have levied against each other.
Wheat: Winter wheat futures strengthened with the start of the day trading session and futures were able to settle high-range and up 7 3/4 to 9 3/4 cents. SRW wheat was the leader to the upside. Spring wheat futures also tagged along for the move higher and settled 8 1/2 to 8 3/4 cents higher.Traders remain optimistic that demand for U.S. wheat will improve in the months ahead as crops are being curbed in important producing regions around the world and the U.S. winter wheat crop is more competitively priced this season. In addition, this year’s HRW wheat crop is reportedly of high quality. But that demand news has been slow to develop. Export sales of 300,000 MT for 2018-19 failed to impress, though export shipments did notch a marketing-year high of 434,700 MT. Also catching a bit of attention today are harvest reports from SRW wheat country indicating that too much rain in June and July resulted in some quality issues and low test weights for some U.S. producers.
Cotton: Futures favored the downside in choppy trade today and ultimately settled 45 to 53 points lower, with nearby contracts leading losses. Importantly, futures found support at the 40-day moving average. Cotton futures faced some profit-taking today that was likely at least in part encouraged by early strength in the U.S. dollar index. The greenback pushed to its highest level in a year in early trade, though it has since backed off its daily high to trade near breakeven. Traders were also unimpressed by export sales of 12,900 running bales (RB) for 2017-18 and 247,700 MT for 2018-19 the week ended July 12. Exports were also down a third from the prior four-week average. But overall export commitments are still running ahead of what’s needed to meet USDA’s recently increased export projection for 2017-18 with just two weeks remaining until the marketing year ends.
On the other hand, selling was tempered to some degree by concerns about the impact of heat and dryness on the 2018-19 cotton crop. Excessive heat warnings and heat advisories are in effect across much of Texas and neighboring areas. And the Seasonal Drought Outlook calls for drought to persist or develop in the months ahead for Texas as long-range forecasts favor continued warmth and dryness.
Hogs: Lean hog futures closed up 5 and 30 cents in the August and October contracts, respectively, while December hogs finished down 15 cents. Prices finished low-range. The hog market attempted to stabilize today after August futures fell to another contract low early. Some value buying and short-covering were featured today. Also mildly supportive for hog futures was the discount futures hold to the cash hog market. But corrective buying was limited. Midday pork product prices rose 51 cents, led by higher loins and bellies. Movement was modest at 155.48 loads. USDA reported the average cash hog price $1.35 lower this morning, at a weighted average of $69.22. With weekly hog slaughter running 4.7% ahead of last year through today’ s estimate, there are plentiful market-ready supplies, which will keep the cash hog market under pressure.
Cattle: Live cattle futures finished narrowly mixed, ranging from 5 cents lower to 22 1/2 cents higher. Feeder cattle were also narrowly mixed today, ranging from 25 cents lower to 20 cents higher. Cattle futures struggled to find much followthrough buying today, despite a high-range close Wednesday and initial cash cattle trade at higher prices. Light cash cattle trade so far this week has taken place around $112, which is up $1.50 from last week’s average. While nearby live cattle futures are trading well below that level and the cash market has performed better than many traders feared so far, traders are reluctant to push futures much higher. Much of tomorrow’s price action will hinge on positioning ahead of USDA’s Cattle on Feed and Cattle Inventory Reports Friday afternoon. With managed money accounts long live cattle, it’s unlikely there will be active buying ahead of the reports unless more active cash trade occurs at $112 or higher prices.