After the Bell: Grains, Beans Continue Sideways, Choppy Trade, Livestock End Mixed

Posted on Tue, 05/19/2020 - 14:45

Corn: Corn ended slightly higher but well below session highs. July corn gained 1/2 cent to $3.21 1/4 and December corn rose 1 1/2 cents to $3.34 1/4. Prices surged to the highest since April 24 and then closed near the open. Prices gained on talk about Chinese buyers asking for export bids at the Gulf. The lack of any confirmation of daily sales before the reopening tempered the late overnight buying interest this morning. Gulf export bids did firm a little today, although some of that may be reflective of exporters trying to pull supplies in the face of scheduled lock and dam closures for repairs. The market also gained on strong oil prices. June crude oil futures expired at $32.50, a big improvement from the negative $37.63 at the May contract’s expiration a month ago.  

Soybeans: July soybean futures closed down 2 1/2 cents at $8.42 1/2 today and near mid-range. July meal hit another contract low and closed down $0.50 at $284.60. July bean oil fell 23 points to close at 27.09 cents after hitting a five-week high early on today. The soybean futures market continues to struggle due in part to a sickly soybean meal futures market. The meal market will have to show a solid price recovery for the soybean futures market to show any significant price improvement. The lack of any new U.S. sales to China so far this week is also a negative for the soybean market. National planting was 53% complete as of Sunday, well ahead of the five-year average was 38% complete. A year ago, soybean planting was 16% complete. The market was expecting 56%.  

Wheat: July SRW wheat futures closed up 1 3/4 cents at $4.98 3/4 today and near mid-range on tepid short covering after hitting an eight-month low on Monday. July HRW wheat futures closed the day down 4 3/4 cents at $4.41 1/2, near the session low and touched a four-week low today. The winter wheat markets are trying to stabilize from recent strong selling, but the bulls have more work to do in the near term to accomplish a stable base. Selling in wheat futures today was somewhat limited by the modest strength in the corn market so far this week. The U.S. spring wheat crop is 60% planted, which is well behind the five-year average of 80% planted by mid-May, crop progress reports late Monday showed. USDA’s winter wheat crop condition report showed national good to excellent ratings down 1 point from last week to 52%, which is in line with five-year average.  

Cotton: Cotton futures posted gains of 111 to 140 points through the March 2021 contract, which was high-range for the day. Funds continued to cover short positions in the cotton market, despite a lack of bullish fundamental reasons to do so. As of May 12, managed money accounts were net short 15,375 contracts of cotton futures, suggesting more near-term short-covering is possible given the potential technical upside breakout from the short-term consolidation range today. Days in which cotton futures have posted gains in excess of a penny have typically had some Chinese demand component. We were unable to uncover any Chinese purchase rumblings today.

Hogs: Lean hog futures got off to a firmer start, but buying petered out and futures settled low-range and down 92 ½ cents to $1.375. Selling in the lean hog market picked up after the release of details regarding USDA’s Coronavirus Food Assistance Program. The measure will make per head payments for pigs and hogs, but the measure did not include aid to help with euthanization expenses. USDA Secretary Sonny Perdue indicated policy on that will come later and be based on data. For the producer the message is clear—more delays. The payment limit is higher than initially proposed at $250,000 per person or entity for all commodities combined, but some fear these caps will still be hit quickly. Hog processing continues to improve with slaughter estimated at 397,000 head on Tuesday, up 36,000 head from last week but still 69,000 head below year-ago levels.

Cattle: Live cattle closed mixed and feeders were mostly lower. August live cattle rose 22.5 cent to $99.075 and October were up 7.5 cents at $101.125. August feeders fell 62.5 cents to $131.925. Choppy trading continues but a firming undertone continues to develop in the front-month futures given the large discounts to the cash trade. Very light trade said done at $120 but bids are few and far between. Slaughter rose to 99,000 head, up 10,000 from last week and pushing the weekly tally to 193,000. This week’s kill is up 18,000 from last week but still 48,000 head below last year. Boxed beef was lower at midday on moderate demand for moderate offerings.  Choice was $5.43 lower at $409.52 and Select fell $5.24 to $389.63.