After the Bell: Corn, Soybeans Retreat on Harvest Pressure, Fund Long Liquidation

Posted on Thu, 09/24/2020 - 14:41

Corn: Prices ended lower and near the daily lows. December corn fell 5 cents to $3.63 1/2. Futures were weaker overnight and December prices pushed down to $3.63, breaking the prior two sessions’ lows at $3.65 3/4. The market is sitting just above longer-term support. Chicago futures followed Dalian corn futures lower overnight, a reminder that there is also a big speculative long in the Asian market as well as here at home. Weekly U.S. corn export sales rose to 2.139 MMT in the week ending Sept. 17, with 566,400 MT sold to China. Sales on the books for the marketing year to China are now 9.3 MMT with another 2.8 MMT sold to unknown destinations. Sales did top pre-report estimates but failed to provide much boost to futures this morning. USDA’s daily export sales reporting service did not announce any new large private exporter sales this morning.  

Soybeans: November soybeans closed down 14 1/2 cents at $10.00. December soybean meal futures ended down $8.10 at $336.50 and December bean oil lost 39 points to close at 32.41 cents. Soybeans today followed Chinese bean futures lower. Also, soybean futures saw pressure today after USDA did not announce any new sales to China this morning, halting 14 straight sessions of announcements to China or unknown destinations. Weekly USDA export sales in the week ended Sept. 17 were above pre-report estimates soybeans. USDA reported that soybeans sales rose to 3.195 MMT, primarily for China, which bought 1.879 MMT. The market rally has stalled this week on open U.S. harvest weather and some “better-than-expected” early yield results.  But it is early to call a trend.

Wheat: December SRW wheat futures closed up 3/4 cent at $5.49 3/4 today. December HRW futures finished the day down 1 1/4 cents at $4.83 today. Spring wheat futures gained almost 2 cents. The rallies in corn and soybean futures have stalled out this week, which is leading to limited fresh buying interest in wheat futures. The wheat futures markets will continue to look to corn and soybean markets for direction. Export sales in the week ended Sept. 17 were on the light end of trade ideas for wheat. U.S. wheat sales last week fell 34% below the prior four-week average, with private exporters reporting 351,200 MT sold last week.

Cotton: Cotton futures saw two-sided trade today, but the market found support near the 40-day moving average and Monday’s low, helping prices to finish high-range with gains of 6 to 21 points for the day. The July 2021 contract was an exception, settling high-range but a point lower for the day. Traders were encouraged by the market’s ability to rebound off near-term levels of support, signaling bulls are unwilling to give up their grip on the market just yet. That said, harvest is underway and related hedge pressure remains a near-term risk. While the market’s long-term trend remains higher, cotton futures have posted a series of lower highs and lower lows the past two weeks and futures are testing the uptrend drawn off the lows since April.

Hogs: Hog futures were lower and ended near session lows, halting a two-day rally. December hogs fell $1.075 to $63.275 and February fell 57.5 cents to $68.50. Cash hogs opened steady to firm with a light run today, ahead of the USDA’s Quarterly Hogs & Pigs Report tonight. The report was in-line with pre-report estimates. The strength of demand has been offsetting the heavy supplies of market-ready hogs, barrows and gilts. This week’s slaughter is estimated at 1.935 million head, up 9,000 head from a week ago and 60,000 head more than a year earlier.  The national average direct hog price was 63 cents higher this morning. Pork values were firm at midday, with the cutout rising 77 cents to $89.74.  Picnics, loins, butts, ribs, and bellies are higher and offsetting lower hams. Sales were light at just 150 loads.

Cattle: Live cattle futures finished 62 1/2 cents to $1.075 higher through the June contract. Feeder cattle gained 45 cents to $1.20 through the May contract. Cattle futures found follow-through buying today as they rebounded from losses the first two days this week. Fundamental support came from stronger weekly export sales of beef. Export sales for the week ended Sept. 17 totaled 18,000 MT, up 26% from the previous week and 36% above the four-week average. China was a buyer of 3,400 MT of U.S. beef during the week. Additional support came from this week’s firmer cash cattle prices. There’s also hope the wholesale beef market may be bottoming, which could support additional near-term cash strength.