After the Bell: No Shortage of News, But Market Has Limited Response

Posted on Tue, 12/10/2019 - 15:08

Corn: December corn futures posted losses of 2 ½ cents for the day, while deferred months ended 1 ¼ to 2 cents higher. Trade news today was pretty positive, with House Speaker Nancy Pelosi announcing a deal had been reached that should allow the long-stalled U.S.-Mexico-Canada Agreement to move forward. Meanwhile, officials from both the U.S. and China have signaled a Phase 1 trade deal is near and indicated the Dec. 15 tranche of U.S. tariffs on Chinese goods may be pushed back. But we’ve been down this path before on the China front, only to have a deal slip out of negotiators’ grasp.

Soybeans: January soybean futures rose 4 cents to $9.01 1/4 today and closed at its highest level in nearly three weeks. March soybean meal gained 20 cents at $302.40 and March bean oil was up 9 points at 31.95 cents, which marked its highest close in four weeks. USDA in its monthly supply and demand report today left its U.S. soybean ending stocks forecast unchanged from last month and made no changes to its supply or usage projections for 2019-20. However, the national average on-farm cash soybean price was lowered 15 cents from last month to $8.85 per bushel.

Wheat: SRW wheat futures finished mostly around a penny higher. HRW and HRS contracts finished around a nickel higher. The wheat market had a positive reaction to USDA’s December WASDE Report. USDA cut U.S. ending stocks much more than anticipated and mildly reduced its global wheat ending stocks forecast without China. The most support came from the 40-million-bu. cut to U.S. carryover, which dropped it to 974 million bushels. This would be the first time below the 1-billion-bu. level for U.S. wheat ending stocks since 2016-17.

Cotton: March cotton futures gained 55 points to close at 65.93 cents today. The size of the U.S. cotton harvest declined once again on the USDA’s December Crop Production and WASDE reports. The department’s planted and harvested acreage estimates were once again unchanged at 13.76 million and 12.51 million acres, respectively, so the reduction in the harvest forecast reflected another cut to the yield estimate.

Hogs: December lean hog futures closed up 47 1/2 cents at $60.475. Deferred contracts posted gains in excess of $1 today. Recent back-and-forth trade continued in the hog market today. Support came from hopes the U.S. and China are moving closer to the initial phase of a trade deal. Reports signal the U.S. is willing to push back tariff increases planned for Dec. 15. But until a deal is signed and/or major Chinese purchases are confirmed, traders are likely to take a prove-it attitude, which means more volatile price action is likely.

Cattle: February live cattle futures closed down 17 ½ cents at $124.575 today, while January feeder cattle gained 12 ½ cents to finish at $141.65. The cattle futures bulls are timid so far this week as many market participants are looking for a top in the cash cattle market soon. Late word this afternoon sees Kansas cash trade getting underway at $118 to $119, in line with last week’s action that resulted in an average price of $118.92.