After the Bell: Corn, Soybeans and Wheat Set Back

Posted on Tue, 09/15/2020 - 15:03

Corn: Corn futures set back today, and futures settled with losses around 3 cents. Selling was corrective in nature. Funds took a breather from aggressive buying to start this week, leading to a corrective mood to the downside today. But momentum still clearly favors market bulls. Gains over the past month have been fueled by late-season crop concerns in the U.S. and improved export business, with some saying China could be a much more aggressive importer of corn in 2020-21 than USDA projects.

Soybeans: November soybean futures fell 8 cents to close at $9.91 1/2 today. December meal closed down $2.80 at $319.20 and December soyoil dropped 14 points to close at 34.15 cents. All three markets saw normal and healthy corrective pullbacks in existing price uptrends, following recent gains. Today’s monthly NOPA crush report showed a lower-than-expected August crush at 165.1 million bu., down from 168.1 million bu. in crushed in August 2019 and the 169.5 million bu. expected by the trade.

Wheat: Wheat futures finished mostly 5 to 7 cents lower, with the SRW contract leading today’s declines. Futures closed well off session lows but still ended in the lower portion of today’s ranges. Wheat futures didn’t get any help from the corn and soybean markets today, which triggered a wave of fund long liquidation in the winter wheat markets. As of Sept. 8, managed money accounts were net long just over 22,000 SRW futures and nearly 9,000 HRW futures contracts. Given projected record global wheat ending stocks for 2020-21, fundamental incentive for funds to hold long positions in the wheat market is lacking, especially if corn and soybeans halt their recent rallies. As a result, price action in those two markets is critical for wheat futures.

Cotton: Cotton futures finished 7 to 42 points lower through the July contract, though that was well off session lows. Cotton futures faced profit-taking today after failing to find buyer interest above Monday’s highs in early trade. But the late move well off session lows signals there wasn’t much seller interest on the mild price break either. Funds were only minor sellers of cotton today. Given funds were net long 43,725 futures contracts as of Sept. 8 and they added to that position the past four days, the market could face additional price pressure if fresh bullish news doesn’t develop.

Hogs: October lean hog futures closed up $1.075 at $65.70 and December futures dropped 52 1/2 cents to $63.05. Futures finished near session lows. It appears the futures market quickly factored into prices news late last week that Germany confirmed a case of African swine fever. Additional cases were reported today. China, South Korea and Japan have responded with blanket bans, opening the door for even stronger U.S. shipments of pork.

Cattle: Live cattle futures faced pressure for much of the session, but the market was able to muster a high-range, narrowly mixed finish. Feeder cattle saw two-sided trade before moving definitively higher to finish with gains ranging from 17 ½ cents to $1.10. Today’s close is encouraging for followthrough buying tomorrow, extending the live cattle market’s recently renewed uptrend. Futures are signaling traders expect higher cash cattle trade after fairly light action last week at softer price levels. October futures hold nearly a $6 premium to last week’s average cash price. Showlist estimates are reportedly down 19,000 head from week-ago, which should work to feedlots’ advantage.