After the Bell: Grains Recover to Close Higher, Soybeans End Lower

Posted on Mon, 09/28/2020 - 14:19

Corn: Corn futures settled high-range with gains of 1 to 2 1/2 cents through the September 2021 contract. December 2021 corn futures ended 1 1/2 cents higher.  Corn futures faced pressure overnight and early during daytime trade, but key support held and that attracted buyers. Managed money accounts, which were net long more than 108,000 corn futures contracts as of Sept. 22, added to their market length today. Funds have their most bullish position in the corn market since the end of July 2019 and the most bullish stance for this time of year since 2012. They could peel off some of their long positions ahead of Wednesday’s Quarterly Grain Stocks Report that will set 2019-20 ending stocks and give the market implied fourth-quarter corn use.  

Soybeans:  Futures ended lower and in the bottom third of the daily range. November beans fell 6 1/4 cents to $9.96 1/4. December soymeal dropped $4.70 to $333.90 and December soyoil gained 25 points to 33.11 cents. After a few showers across the Midwest during the weekend and today, the outlook is drier into next week. Harvest progress is expected to rise near 18% done as of Sunday, according to a poll of analysis ahead of tonight’s weekly USDA update. The market is looking for active harvest and increased farmer sales as the lack of carry in the market signals to sell now and not store this year’s crop. Rains in Argentina during the weekend and more forecast this week along with a slightly wetter forecast at midday for parts of Brazil, added to a defensive tone.  

Wheat: Winter wheat futures closed higher, erasing early declines. December SRW was up 6 cents to $5.50 1/4 and December HRW gained 7 1/2 cents to $4.82 3/4. Spring wheat futures were fractionally lower. Wheat futures bounced off technical support on concerns that dryness will hurt early crop development of winter wheat ahead of the winter. Dryness concerns remain for winter wheat planting and establishment in the U.S. Plains, Russia’s Southern Region and Kazakhstan. However, rain will fall in Ukraine and many areas in Europe have already received rain which will improve winter crop planting and establishment conditions. The weekly USDA inspections report showed an improvement in wheat shipments last week, with 20.7 million bu. inspected, including 6.9 million for delivery to China.  

Cotton: December cotton futures closed the session down 26 points at 65.69 cents and finished near mid-range. The cotton market saw some selling pressure on ideas this week will see good weather for harvesting the U.S. cotton crop. Traders are looking for a smaller U.S. crop to be collected this fall, based on weather losses since last month’s USDA update. However, damage from the recent hurricanes and tropical storms may prove to be less severe than some expect. Also a worrisome element for the cotton market bulls is the continued trade and political tensions between the U.S. and China.  

Hogs: Most lean hog contracts spent the day within Friday’s wide trading range, with the market settling anywhere from 77 ½ cents lower to 95 cents higher. The lean hog market continues to display resiliency after USDA delivered a neutral to bearish Quarterly Hogs & Pigs Report last week, in part due to some skepticism about the data. Sharp cash market gains, reduced weights and moderating slaughter numbers would imply a more current hog inventory situation than the report implies. Over the past four weeks, hog slaughter has dipped 1% from year-ago, but the coinciding rise in average cash hog bids signals supplies are not backing up on the slowdown. Cash hog bids climbed nearly $4 last week. The pork cutout value surged $5.72 to start the week, with belly prices soaring $21.12 and hams rising $9.52. Retailers are reportedly stocking up on holiday supplies early.  

Cattle: October live cattle futures closed the day up $0.375 at $107.95, with December futures gaining $0.25 at $111.65. November feeder cattle futures rose $0.95 to close at $141.10. The cattle futures bulls had a good day today, as prices made gains despite USDA’s Cattle on Feed Report last Friday showing the number of cattle on feed on Sept. 1 rising to the highest for the date since data began in 1996. The number of cattle placed into feedlots in August jumped 9.2% from year-ago, which was above the 5.8% gain analysts expected.  Market attention is shifting back to recent improvement in the cash market. Cash cattle prices on average rose about $1.50 last week.