Corn: December corn futures close up 1 3/4 cents at $3.65 1/4 and near mid-range. For the week, December corn lost 13 1/4 cents. Friday’s modest gains stopped this week’s bleeding, but the bulls will have to step up and show better buying interest early next week to keep the near-term price uptrend alive on the daily bar chart. U.S. harvest weather continues to look mostly clear for the next two weeks, and that will limit buying interest in corn futures as farmers will also be bringing their newly-harvested corn across the elevator scales to sell. On Sept. 30, USDA will release its Quarterly Grain Stocks Report. We expect USDA to increase Sept. 1 U.S. corn stocks above the average pre-report trade estimate. Fourth-quarter feed use has never topped the third quarter, as USDA’s current 2019-20 feed and residual use estimate implies.
Soybeans: Soybean futures saw some choppy trade overnight, but the market spent the day trading session in the green and settled 2 ½ to 5 cents higher for the day, but solidly lower for the week. The November contract fell 41 cents from last Friday. Soymeal futures settled 80 cents to $3.10 higher today, but lower for the week. Soyoil futures posted gains of 21 to 48 points today and sharply lower for the week. USDA will release its Grain Stocks Report on Sept. 30. Preparation for and reaction to that data will be a major market feature. On average, analysts polled by Reuters expect USDA to raise the 2019 soybean crop by 33 million bu., but we fear the increase could be even larger, pushing Sep. 1 soybean stocks higher than most expect. Meanwhile, harvest is picking up steam thanks to warm, dry weather, and with that comes hedge pressure.
Wheat: Wheat futures finished the week under pressure with SRW contracts down around a nickel, HRW contracts 7 to 8 cents lower and HRS futures mostly 3 to 5 cents lower. For the week, December SRW wheat dropped 30 3/4 cents, December HRW wheat fell 29 cents and December HRS wheat fell 21 1/2 cents. Today’s losses and the low-range closes for the week give bears the upper hand to start next week. Wheat needs the corn and soybean markets to provide support to halt the price pressure. Otherwise, there isn’t much bullish news for wheat traders to pull support from. Wednesday’s USDA reports aren’t likely to provide any market-moving news for the wheat market, as only a small adjustment to 2020 production is expected and implied first-quarter use is likely to be rather ho-hum.
Cotton: December cotton gained 49 points to close at 65.95 cents. That was near weekly highs and up 29 points for the week. Cotton continues to be tied to the stock markets and today’s rebound on Wall Street helped cotton finish on an upswing. Cotton exports slowed in the week ended Sept. 17 from a week earlier. However, accumulated sales are 57% of the USDA export forecast for the year as of last week, above the five-year average of 48% for the date. The dollar formed a big reversal up pattern this week and that could limit sales if the trend continues to gain momentum. Prices will likely continue to chop between 64.00 and 67.00 cents into the October 9 USDA world supply demand report.
Hogs: October lean hog futures closed the day up $2.275 at $71.75. December lean hog futures closed up $1.15 at $64.425, scored a bullish outside day up on the daily bar chart and closed at a technically bullish weekly high close. For the week, December hogs gained 90 cents. Friday’s strong close suggests there will be follow-through speculative and chart-based buying in lean hog futures early next week. If the hog futures have proven anything the past two weeks, it’s that this market is resilient. With the USDA quarterly hogs and pigs report out of the way with no major bearish surprises, focus next week will be on U.S. exports, which will be key after the recent surge in both cash hogs and pork cutout values amid the seasonal increase in hog numbers the next six weeks. The CME Lean Hog Index rose to near a 13-month high this week, pulling futures higher
Cattle: December cattle were down 87.5 cents at $111.40 and 45 cents lower for the week. February cattle fell $1.05 to $114.60 on Friday and down $1.475 for the week. November feeders fell $2.20 on Friday and $2.375 for the week to close at $140.15. October futures showed the most bullish action of any live cattle contract this week, as the contract rose above the nearby weekly contract’s high from August today but still pared its weekly gain into the close. December closed lower for the week as did more deferred contracts on hedge selling ahead of this afternoon’s USDA Cattle-on-Feed report. The report showed on-feed numbers up 3.8% from a year earlier and a new record for Sept. 1. That was larger than the average pre-report average estimate for a 3.3% increase and may add some pressure early next week.