After the Bell: Quiet Consolidation with Corn, Beans and Wheat Finding Support

Posted on Thu, 10/01/2020 - 15:29

Corn: Corn futures finished near midrange with gains of 3 3/4 cents through the July contract. December 2021 corn futures ended 1 3/4 cents higher. Corn futures showed follow-through buying after USDA’s bombshell Grain Stocks Report on Wednesday. Front-month corn futures hit their highest level since early March on the continuation chart. While the buying wasn’t nearly as strong, bulls came back to the market today, signaling the move wasn’t a flash in the pan. With Sept. 1 stocks (new-crop beginning stocks) 255 million bu. below expectations and USDA expected to cut its production estimate in the Oct. 9 Crop Production Report, the new-crop supply picture is much friendlier than it was prior to yesterday’s report.

Soybeans: November soybean futures prices closed steady at $10.23 1/2 today. December soybean meal futures gained $5.10 today to close at $347.90 and set a new contract high. December soybean oil futures fell 71 points and closed at 32.42 cents. It was a good day for the soybean bulls despite prices failing to make gains, as Wednesday’s solid gains were held. The strong soybean meal futures market is also a positive for more price appreciation in soybeans in the near term. USDA’s daily export sales reporting service announced private exporters sold 120,00 MT of soybeans to Egypt. Today’s weekly USDA export sales report showed U.S. soybean sales topping pre-report estimates. Exporters reported soybeans sales at 2.591 MMT and included 1.329 MMT in sales to China. Soymeal sales rose above 500,000 MT.

Wheat: Futures consolidated Wednesday price surges. December SRW was down 7 3/4 cents to $5.70 1/4 and December HRW slipped 3 3/4 cents to $5.06 1/2. Spring wheat futures were down 6 to 7 cents. Funds took some profits after the unexpected surge on Wednesday. The markets remain supported by USDA cut in the U.S. crop and smaller inventories estimated on Sept. 1, which helped to pare losses by the close.  With the weather issues seen in the U.S. Plains and Russia more upside can be seen but this move will push U.S. wheat out the export market mixed. Market bears continue to say that but weekly sales in the week ended Sept. 24 rebounded 44% from the prior week and topped more than 500,000 MT. More than half the sales were HRW and that continues to keep that market paring its discount to SRW futures. Sales were also above the weekly paced needed to reach USDA current export projection.

Cotton: December cotton futures rose 12 points to close at 65.91 cents today. USDA today reported U.S. cotton net sales of 233,800 running bales (RB) for 2020/2021 were up noticeably from the previous week and up 7% from the prior 4-week average. China purchased 55,700 RB. Shipments of 218,200 RB were down 23% from the previous week and 10% from the prior 4-week average. Exports were primarily to China at 105,400 RB. Selling interest in cotton futures was limited today by a stabilization in the U.S. stock market this week and by a pullback in the U.S. dollar index from its recent gains.

Hogs: October lean hog futures settled $1.35 higher in the front-month and narrowly mixed in deferred contracts. December through May futures posted an inside day of trade while summer months poked to new highs for the week. Strong domestic demand has prevented months of big kills from overwhelming the market with pork. In fact, the average pork cutout value for the month of September stood at $85, up $14 from year-ago levels, despite big year-over-year gains in slaughter through summer and into the fall. Kill numbers have recently moderated. This week’s slaughter is running 22,000 head under year-ago levels four days into the week and weights in the key Iowa/southern Minnesota market are holding just below year-ago levels, signaling the worst of the backlogs have been worked through. USDA announced sales of 39,500 MT for 2020 delivery the week ending Sept. 24, with another 1,300 MT in sales for 2021 delivery. Mexico and China topped the list of buyers.

Cattle: October live cattle futures prices closed down 2.5 cents today at $108.525. December live cattle lost 52.5 cents to close at $111.825 today. November feeder cattle futures closed down 80 cents at $141.25. The cattle futures markets saw corrective, profit-taking pullbacks today following recent gains that saw prices earlier this week hit multi-week highs. USDA today reported weekly U.S. beef export sales jumped 67% to 24,700 MT from the prior four-week average. China was noted as buying 4,300 MT. USDA also reported 1,300 MT in 2021 sales to Hong Kong. Choice and Select boxed beef values climbed another 89 and 83 cents, respectively, at noon today, with movement slowing to 83 loads.