Corn: December corn futures ended the day Friday down 12 1/4 cents at $3.44 3/4 and for the week lost 10 1/2 cents. Prices on Friday also closed at a technically bearish weekly low close. The corn market bulls fizzled Friday, hit by one-two punches of better rain chances in the updated Corn Belt weather forecasts and no bullish surprises in the USDA monthly supply and demand report. USDA today raised its old-crop corn ending stocks forecast by 145 million bu. from June. USDA kept its 2019-20 national average on-farm cash corn price at $3.60. USDA also cut the projected 2020-21 total corn supply by 850 million bu. from last month as a result of the lower crop projection and higher beginning stocks. Weather will be the main focus of corn traders next week and likely until the end of July. Friday’s weather updates now suggest wetter conditions and less heat in the Midwest the next couple weeks—during the critical pollination stage for the majority of the U.S. corn crop. However, just this week the weather forecasters did some of their usual flip-flopping on their predictions, and such could be the case when the new forecasts come out Sunday evening and Monday morning.
Soybeans: Soybeans ended lower, pushing futures down for the week. November beans fell 10 ¾ cents to $8.90 3/4 and down 6 cents for the week. December meal futures erased this week’s gain on Friday and closed $4.10 lower on the week. December soyoil futures fell 39 points this week to settle at 28.84 cents Friday. Weather continues to dominate price action. Futures surged to the highest since late March to start the week and closed making new weekly lows. Prices fell after President Donald Trump said the country’s relationship with China was severely damaged, raising doubt Beijing will fulfill pledges to buy more U.S. farm products. Today’s weather updates at midday were wetter and cooler and added to pressure from a neutral-bearish USDA supply and demand outlook this morning. This can all change. USDA raised old-crop carryover 35 million bu. to 620 million bu. from its June projections. New-crop carryover was raised 30 million bu. to 420 million. USDA raised its old-crop Brazilian crop 2 MMT to 126 MMT and boosted world carryover to 99.7 MMT. New-crop carryover was cut to 95.1 MMT and down from 112.7 MMT two years ago.
Wheat: Mixed close, reflecting the heavy speculative buying in SRW and lack of it in HRW which is more reflective of world markets fundamentals. December SRW extended this week’s gain almost a dime Friday and closed up 38 cents for the week at $5.39. December HRW fell almost 4 cents on Friday, paring this week’s gain to 13 ¼ cents to settle at $4.64 ¼. US 2020 wheat production was trimmed by 53 million bu. to 1,824 million bu. due to reduced SRW and HRW production. The spring wheat crop was estimated at 502 million bu., down 20 million from last year with recent rains likely to boost that estimate in the August 12 update. U.S. wheat ending stocks were estimated at 942 million bu., up 17 million from last month. The average farmgate wheat price stayed at $4.60/bu. World wheat stocks were projected at a record 314.8 MMT and likely an anchor on further rallies.
Cotton: Cotton futures posted gains of 34 to 42 points through the March contract today. For the week, December cotton futures firmed 136 points. Cotton futures pushed out to a new high for the move this week and finished near weekly highs. That keeps technical momentum with bulls. Fundamentally, weather is the focal point, especially dry conditions in West Texas. Some areas of West Texas and the Texas Panhandle are likely to receive rains next week, but given expected extreme temps, they won’t provide much, if any relief. New-crop ending stocks are now projected to decline from the 2019-20 marketing year. But at 6.8 million bales, supplies will still be plentiful.
Hogs: July hog futures finished 12 1/2 cents higher. Deferred contracts ended 35 to 82 1/2 cents lower. For the week, August hogs firmed 67 1/2 cents. Hog futures filled the chart gaps left after the June 25 Hogs & Pigs Report this week but failed to find follow-through buying. While there are signs a low has been posted, the premiums futures hold to the cash market could limit near-term buyer interest unless the cash market shows sustained strength. With packers still working through backlogged hog supplies, there isn’t incentive for them to aggressively pursue hogs with higher cash bids. BLT season should drive a pickup in demand for bacon, though the key driver for demand will remain exports to China. All indications signal China should continue to aggressively buy U.S. pork.
Cattle: August live cattle futures ended the day Friday with gains of $0.75 to close at $100.00. For the week, August live cattle gained $0.60. August feeder cattle futures rose $1.225 today to close at $135.75 and on the week gained $0.875. The live and feeder cattle futures markets ended the week just about where they started it. For futures to mount a sustainable rally, the beef product market likely needs to put in a definitive low. In addition, weekly U.S. beef export sales were light this week, which ultimately limited the futures markets’ upside to end the week. The cash markets this week did uncover some better packer bids for the first time in more than six weeks. Cattle traders and producers looking out over the horizon have one big and uncertain element hanging over the beef industry: What the food industry will look like after the Labor Day holiday.
Corn: Futures extended yesterday’s recovery but closed midrange today. December rose 2 3/4 cents to $3.57. Funds continued to cover short positions on hotter, drier weather forecasts but prices ended at midrange. That suggests the traders will need to see further threatening forecasts past July 18 to sustain this weather rally. Tomorrow’s USDA’s WASDE report should not throw any major surprises and the market will quickly turn its attention to the updated midday weather maps. Most are looking for a two- to three-point drop in crop ratings in next Monday’s USDA Crop Progress Report. About 10% of the crop entered pollination as of July 5, according to USDA. That’s slightly less than average. The condition ratings slipped two points to 71% in “good to excellent” condition.USDA did not announce any new large sales this morning and there were reports China buyers were shopping for some Ukraine and South American corn this week.
Soybeans: Futures finished near midrange with gains of mostly 3 1/2 to 4 1/2 cents. Meal futures ended mostly $3.50 to $3.60 higher. Soyoil futures settled 26 to 30 points lower. Soybean futures were supported by forecasts calling for hot, dry conditions across most of the Corn Belt next week and the following week. Buyer interest was tempered late in the session by a big band of rains pushing across the western and northern Corn Belt. While the critical timeframe for soybeans isn’t until August, recent price action signals that’s traders’ primary focus at this time. Traders will closely monitor the ridge of high pressure to see if it moves from the Plains to over the Corn Belt or stays to the west. Right now, forecasts suggest the hottest and driest conditions will be in the southwestern Corn Belt. This morning’s weekly export sales data garnered limited attention. USDA reported net sales of 952,200 MT for 2019-20 and 382,100 MT for 2020-21.
Wheat:. SRW wheat futures settled 7 ¼ to 8 ¾ cents higher, which was well off session highs. HRW wheat futures retraced early gains and finished narrowly mixed and near session lows. Spring wheat futures ended midrange and up 1 to 2 ¾ cents. Momentum favors market bulls, though there is limited fundamental reason for this strong of a rally in wheat. Early yield reports out of Europe and the Black Sea region have been disappointing and dry weather in Argentina is limiting planting in Argentina. But global supplies are still expected to be ample and the U.S. has struggled to attract export business. Analysts polled by Reuters expect USDA to show global wheat carryover climbing from 297.30 MMT in 2019-20 to 315.89 MMT in 2020-21.
Cotton: December cotton futures closed down 27 points at 63.89 cents today after touching a four-month high in early dealings. Some normal profit taking was seen in cotton futures today, following recent good gains. Cotton futures are being supported on trader anticipation USDA will cut its U.S. production and carryover forecasts in Friday’s WASDE Report after estimating much smaller acreage in the June 30 report. Traders on average are looking for ending stocks to fall about 1.1 million bales from 8.0 million projected in June. That average looks a little high based on the size of the acreage reduction, unless USDA drastically cuts its export forecast as well. Hot, dry weather forecasts for West Texas are also bullish for the cotton futures market.
Hogs: August lean hog futures closed up $2.275 at $50.225 today, hitting a two-week high and closing near mid-range. Hog futures are trying to bottom out and today’s gains begin build a base of support. Good follow-through buying and a bullish weekly high close on Friday would be a good chart clue that the futures market has bottomed out. Traders pushed aside worries about heavy hog slaughter numbers that could last into early September. Pork demand continues to be very good, both at home and abroad. U.S. pork export sales fell 20% to 31,500 MT last week from a week earlier but were up 6% from the prior four-week average. China was the biggest buyer after Mexico, purchasing 8,100 MT last week. Export shipments were robust, up 7% from the prior four-week average.
Cattle: Futures closed higher but off the day’s highs. August live cattle rose 10 cents to settle at $99.25 and August feeders rose 47.5 cents to $134.45. Trader optimism faded, and technical buying slowed after a strong opening this morning. USDA reported the slaughter the last full week of June totaled just 665,000 head, below the estimated 680,000. Steer carcass weights were up 6 pounds for that week, back to 896 pounds, 42 pounds over a year ago and 36 pounds over the 5-year average. In addition, the midday boxed beef trade was weak on modest sales. Choice dropped 45 cents at $203.38 and Select fell 86 cents to $194.66. There was hope for some stability to develop this week, but prices are now the lowest since 2018. While some believe that prices have declined enough and packers can contribute more of their profitable margin to make that so, proof will have to come from strong bids next week and firmer beef markets.
Corn: Corn futures finished in the upper bounds of today’s range with gains of 1 1/4 to 3 1/4 cents following two-sided trade. The July contract that’s in delivery led today’s price gains. Corn futures were largely pulled higher by strong gains in the wheat market. If not for that strong spillover support, corn may well have finished lower. Aside from price action in the wheat market, traders are focused on weather. Models continue to call for rains and a mild cool down tonight through Sunday across areas of the Corn Belt. Warmer and drier conditions are expected next week. The week-two forecast is the one that traders are going to pay close attention to, as that outlook could change depending on the strength and placement of the high-pressure ridge next week. Traders are also preparing for USDA’s monthly Supply & Demand Report on Friday morning that will incorporate June 1 stocks and last week’s updated acreage figures.
Soybeans n: November soybeans closed down 5 1/4 cents at $8.97 1/4. December soybean meal fell $1.30 at $301.80 and December bean oil lost 35 points at 29.21 cents. Futures prices at mid-week were pressured a bit with the less-threatening Midwest weather forecasts. The late-week rainfall coverage and amounts will be key to price direction. Still, the overall weather pattern in the Corn Belt favors periods of hot, dry weather, but not a stationary ridge in the region that would create serious crop problems. This morning, USDA did not announce any new large soybean sales for a second day after Monday reporting private exporters sold 264,000 MT of soybeans to China for old-crop delivery. Chinese crush margins improved last week, and that may help to boost import demand. U.S. soybeans are on China’s menu, but it’s a question of when purchases occur, amid tensions with the U.S. on the rise.
Wheat: December SRW wheat futures closed up 19 3/4 cents at $5.21 3/4 cents and December HRW futures finished the day up 14 1/4 cents at $4.67 1/2. Both markets’ prices ended near the daily highs and they hit three-week highs today. Spring wheat futures gained about a dime. Wheat futures rallied sharply today on disappointing early-harvest yield results reported in parts of Europe and the Black Sea regions. Paris futures rose to near five-week highs today. In its first projections for the 2020-21 season, France’s AgriMer forecast soft wheat shipments outside the EU would fall to 7.75 MMT, down 43% from 2019-20 and the lowest volume in four years. Tuesday the French farm ministry forecast wheat production would fall 21% this year. Consultancies ProAgro and IKAR also reduced their wheat harvest forecasts for Ukraine and Russia on Tuesday.
Cotton: Futures ended higher and just below midsession highs. December rose 114 points to close at 64.16 cents. Cotton is marching higher in anticipation of USDA cutting its U.S. production and carryover forecasts in Friday’s WASDE Report after estimating much smaller acreage in the June 30 report. Traders on average are looking for ending stocks to fall about 1.1 million bales from 8.0 million projected in June. That average looks a little high based on the size of the acreage reduction, unless USDA drastically cuts its export forecast as well. Hot, dry weather forecasts for West Texas only add to the fund buying interest this week.
Hogs: Choppy session ending mixed. August hogs fell 92.5 cents to $47.95 and October hogs rose 17.5 cents to $48.80. Cash hogs were weak amid large negotiated supplies. Hog weights dropped 1.5 lbs. last week but remain 2.8 lbs. above a year ago. Cash hog markets have been steady-weak over these past three weeks and despite the lower carcass weight data since mid-May, hog supplies remain more than ample. The pork cutout fell back below the $63-$68 range of the past three weeks and only rebounded 18 cents to $62.78 at midday. Pork product values are probing for values that must clear a tremendous amount of production into domestic consumers’ or exporters’ hands the next six months. Hams are already at levels that should see increased demand. The outlook is for broad-ranging trade. The cash market is trying to confirm an early seasonal low
Cattle: Live cattle futures faced pressure for the bulk of the day, but the market was able to finish midrange with losses of 22 ½ to 85 cents. Feeder cattle also finished well off session lows with losses ranging from 42 ½ cents to $1.05. Some early cash cattle trade took place yesterday in Iowa around $100, up $3 to $4 from the week prior and at steady prices in Kansas and Texas ranging from $94 to $95. And the online Fed Cattle Exchange auction saw nearly half of the 1,390 head of cattle put up for auction sell at an average price around $95. While steady to higher trade was a welcome change for the cash market, futures recently moved to a premium to the cash market, so they did not rally in response to firmer bids today. The front month ended today a buck under the Iowa cash action.
Corn: December futures fell 3 3/4 cents today to close at $3.52 1/2. Prices closed near mid-range. Corn opened higher in the overnight trade but failed to build on lower USDA crop ratings. Weather in the Corn Belt remains the focus. It’s going to be hot but with more showers now seen later this week. This weekend should be slightly cooler in the Midwest. The key now is where the high-pressure ridge moves next week. If it moves farther west, more showers may develop in the central Midwest; but if the ridge holds over the Great Lakes next week would be hot and dry. About 10% of the U.S. crop entered pollination as of July 5, according to USDA. That’s slightly less than average. The condition ratings slipped 2 points to 71% in “good to excellent Recently released Census export/import data for May showed net ethanol exports for the U.S. were 67 million gallons, the lowest in five years.
Soybeans: November beans ended down 3 3/4 cents at $9.02 ½. December Meal was down $2.90 to $303.10 and December soyoil rose 33 points to 29.56 cents. Prices opened higher overnight and closed in the bottom third of today’s range on forecasts for better Midwest rain later this week and some cooler temperatures this week before heat and dryness returns next week. The weather encouraged some profit taking after the recent jump in prices which was encouraged by a 5% jump in open interest in the past week. Before the recent rally, funds extended their bullish bets on soybeans to 67,836 futures and options contracts through June 30, up from 44,285 in the prior week. The new fund long position is the most bullish since October.The weekly USDA Crop Progress Report showed U.S. soybeans rated “good to excellent” condition held unchanged at 71%.
Wheat: Futures ended slightly higher but down from earlier highs. December SRW futures rose a penny to $5.02 and December HRW rose 1 3/4 cents to $4.53 1/4. September spring wheat rose 1 1/4 to $5.14. Winter wheat followed EU wheat prices higher but ran into some light hedge pressure to fall back from session highs by the close. European wheat futures rose near a four-week high on Tuesday, supported by an official forecast of a sharp fall in this years harvest in France, the European Unions biggest wheat supplier. Futures touched 184.75 euros per MT, its highest since June 10. Prices rose on an export-boosting weakness in the euro against the dollar. Frances farm ministry forecast the French soft wheat harvest would fall nearly 21% this year to 31.3 MMT with crops suffering a wet autumn and dry spring. Analyst ProAgro cut the Ukraine wheat crop to 26.1 MMT, down from 26.7 MMT previously.
Cotton: July and October cotton futures settled 17 points higher. The December and March contracts each dropped 12 points on the day. Cotton futures posted a quiet trade with prices stuck inside Monday’s range amid a lack of fresh market-moving news. Monday afternoon’s crop condition data showed a stronger-than-expected improvement in cotton ratings, but that wasn’t enough to attract fresh selling. USDA’s Supply & Demand Report on Friday will show a sharp reduction in projected new-crop ending stocks versus last month as planted acreage will be down sharply to reflect last week’s estimate. But ending stocks will still be plentiful.
Hogs Lean hog futures faced pressure for much of the day trading session, but the market was able to settle well off session lows with losses ranging from 7 ½ cents to 57 ½ cents. Backlogged hog supplies remains the main source of pressure for the lean hog market, with cash market stability and a boost in pork demand needed for the futures market to forge a low. This week’s Midwest heat helped cash hog bids to firm this morning. And slaughter numbers continue to gain on year-ago numbers. Packer profit margins remain above $60 a head, giving them plenty of incentive to keep pushing through as many animals as possible. This morning, the pork cutout value climbed $1.14 and a solid 210.23 loads changed hands. Export demand has also been solid, with Census Bureau data showing the U.S. exported a record amount of pork for the month of May, with strong Chinese buying.
Cattle: August live cattle futures closed down $0.10 at $100.00 today, while August feeder futures lost $1.225 at $134.925. Cattle futures traded in narrower ranges today, waiting for confirmation of talk packers will be bidding for more for supplies this week. There were some reports of light cash cattle trade taking place today at $93 to $95. Cash cattle traded at an average $94.87 last week. Boxed beef values were higher at noon today, with Choice up 58 cents and Select gaining 89 cents. Movement was lighter at 55 loads. U.S. beef export demand remains sluggish. May export shipments fell to a four-year low, down 31% from a year earlier. That’s not a surprise after the surge in wholesale prices. Now the key is to see weekly exports improve.
Corn: Futures ended higher but in the bottom third of the daily price range. December corn rose 2 3/4 cents to $3.56 1/4. Today’s rally stalled on increased farmer sales amid much slower fund short covering. Traders will be looking for fund shorts to fall 70,000 to 80,000 contracts as of June 30 from more 277,000 contracts a week earlier. It is going to be hot and mostly dry this week but there are hints that the high-pressure ridge may break down and allow for some moderation in temperatures and a few showers into the Midwest by late this week and again next week. The models have been erratic and signal rising seasonal price volatility. Some are betting that the current 15% of the corn crops experiencing some crop stress may rise to 40% by next week. This morning, USDA’s daily export sales reporting program announced private exporters reported 202,000 MT of corn sold to China for new-crop delivery and Mexico bought 121,900 MT of corn for new-crop delivery and another 60,960 for delivery in the 2021-22 marketing year.
Soybeans: Soybean futures enjoyed strong buying coming out of the July 4 holiday weekend, with old-crop contracts poking back above the $9.00 level for the first time in four months. But futures backed well off those highs by the close, with futures ending 6 cents to 9 ½ cents higher for the day. Old-crop contracts settled just under the psychologically significant $9.00 level. Traders aggressively extended last week’s quick weather-inspired rally to start the week. But the price move above $9.00 for nearby futures triggered some profit-taking and farmer sales. Recent heat and dryness are expected to linger this week and possibly return again next week after some late-week/weekend showers. But there’s a fair amount of forecast uncertainty and the key development period for soybeans does not arrive until August. Simmering tensions between the U.S. and China are another a limiting factor, with the market still on edge about whether China will follow through on its ag purchase commitments. USDA did announce a 264,000 MT old-crop soybean sale to China via its daily reporting service today. But a steady flow of such news and even bigger tallies will be needed to put China’s purchase targets in reach.
Wheat: HRW contract led price gains in the wheat complex today, firming generally 4 to 5 cents. SRW contracts finished mostly a penny-plus higher, while HRS futures were around 1 to 2 cents higher. Wheat futures road the coattails of the corn and soybean markets higher today. With those markets closing off their highs, SRW futures finished low-range. But HRW contracts managed to end midrange, despite ongoing harvest activity in the Plains. For wheat to show any sustained strength during harvest, corn and soybeans likely need to lead the way. Dry conditions in the Black Sea region are causing some wheat crop estimates to decline, which provided additional support. In addition to potential yield losses due to weather, Russia’s ag minister says the country wants to make its export quota mechanism permanent, but a decision won’t be made until after harvest data is finalized.
Cotton: December cotton futures gained 19 points at 63.14 cents today and hit a nearly four-month high. Prices did finish nearer the session low. Rallying global stock markets to start the trading week lifted the cotton futures market. At present, traders and investors are reckoning the surprising rebounds in major economies, as evidenced by recent economic reports, is trumping the rise in Covid-19 cases in some industrialized countries, including the U.S. The weaker U.S. dollar index to start the trading week also worked in favor of the cotton market bulls today. Cotton traders are also awaiting Friday’s monthly WASDE report after USDA estimated smaller cotton planted acreage last week.
Hogs: August lean hog futures closed up $0.075 at $49.275 today and near the session low. Hog futures continue to struggle to regain their footing after the bearish USDA Quarterly Hogs & Pigs Report that signaled the market will be working through backlogged animals for another two months. Strong domestic demand for pork and USDA reporting solid pork exports the week ending June 25, with China as a lead buyer, have stabilized the market for now. However, it’s unclear whether a low in the futures market is in place, especially with the charts still showing little upside momentum Today’s hog slaughter was 452,000 head versus a year ago at 483,000 and a week ago at 468,000. Pork cutout at midday today rose $1.75 on strength in hams. Movement was 217.38 loads.
Cattle: Futures on Monday extended strong gains to close last week. August live cattle closed 70 cents higher at $100.10 and October gained $1.20 to $103.925. August feeders rose $1.275 to $136.15. Futures added to their premium relative to the cash market that averaged $94.47 last week. Some of last Thursday’s push higher came from unwinding spreads after the CME raised margins as open interest fell more than 3,500 contracts. Preliminary showlists are lighter this week as feedlots hold animals in hopes of a stronger cash markets. That could cut the rally short unless the cash markets start to firm. Direct trade was slow today. Boxed beef was weak to lower at midday on light demand but that did not turn prices lower. Traders will be watching for signs the holiday weekend clearance has retailers refilling coolers.
Corn: December corn futures closed up 10 cents at $3.60 ½, extending its three-month high today. July closed up 9 3/4 cents at $3.48 1/4. The corn market bulls were able to produce strong and important follow-through strength on the upside Wednesday, after Tuesday’s big gains in the wake of USDA’s shocking U.S. acreage report. USDA estimated corn acreage will rise to 92 million acres this year from 89.7 million last year but down from 97 million farmers said they intended to plant in March. Some said the drop in acres may be revised upward, but for now, the smaller seedings and increased weather threat are lifting the corn futures market. Wednesday’s additional solid gains in corn give legitimacy to the potential for still more gains occurring in the near term.
Soybeans: August soybeans rose 12 3/4 cents to $8.91 1/2 and November futures gained 16 3/4 cents to $8.99. Soymeal jumped $7 to $9 today and soyoil futures gained about 20 points. Soybeans extended the strength from yesterday’s gains amid a smaller increase in USDA’s acreage estimate from the March intentions survey. Funds were big buyers today, adding to net-long positions in soybeans and covering net-shorts in soymeal. Hot, drier Midwest weather forecasts into July 11 added to the buying enthusiasm. This morning’s weather updates show less rain in the outlook next week, increasing threats from the rising temperature outlook. While models out 10 days remain volatile with an enormous spread in the potential outcomes, the markets are more focused on the hot, dry outlook despite rains this week and more falling this morning in some of the drier areas.
Wheat: Mixed finish. December SRW rose 7 cents to $5.06 and December HRW gained 3 cents to $4.55. September spring wheat futures were down 2 3/4 cents to $5.17 1/4. Wheat futures traded both sides of unchanged and came back late in the session on strength in corn and soybeans. Spring wheat was pressured most of the session on beneficial rains across the Northern Plains and Canadian Prairies. Carryover support continued from USDA cutting it estimate of planted acreage to the lowest since records began in 1919. Wheat is also moving up on weather worries overseas. Concern over France and neighboring areas will continue for at least the next ten days and the same is expected for crop areas from eastern Ukraine through Russia’s Southern Region to Kazakhstan. Favorable crop weather will continue elsewhere on the European continent
Cotton: Cotton futures found strong followthrough buying today and finished 160 to 191 points higher through the March contract. Futures settled near session highs. Traders were still factoring in USDA’s surprisingly low cotton acreage figure, which was down 1.5 million acres from March intentions and 1 million acres lower than traders anticipated. There are also concerns with the U.S. crop, specifically in Texas. Technical-based buying added to the price strength today, as futures pushed through resistance levels and triggered buy stops. Funds were again active on the long side of the market. To extend the price rally, funds must continue to pump money into long positions.
Hogs: Lean hog futures were unable to sustain early gains. The market settled 25 cents to $1.075 lower in all but the August contract, which finished with a 5-cent gain. Lean hog futures continue to struggle to gain their footing after a very bearish Quarterly Hogs & Pigs Report last week. The report reminded of burdensome supplies of market-ready supplies. Production had been expected to test the industry’s slaughter capacity this year, and then Covid-19 hit, taking down a substantial portion of the industry’s processing sector and causing backlogs in excess of 1 million animals. Processing is back up to speed but working through the glut will take time. The market remains unclear whether this bearish news has been fully factored into current prices. If so, product market strength could be the driver for a corrective rebound.
Cattle: August live cattle futures closed the day up $1.025 at $97.30, near the session high and at the highest closing level in three weeks. August feeder cattle futures gained $0.225 at $133.075 erasing earlier declines. The cattle bulls have gained a bit of momentum in this holiday-shortened week. However, gains in feeders are being limited by the big rally in the corn futures market. Wednesday’s noon beef report showed Choice grade cutout down $1.38 and Select down $0.44. Movement was 115 loads. Lower wholesale beef cutout values on Tuesday and today will likely find stronger grocer demand and that’s a positive signal heading into July. Traders are now awaiting Thursday morning’s weekly USDA export sales report. Better export numbers than recently would add to cash market stability.
Corn: July corn rose 12 1/2 cents to $3.38 1/2 and December futures jumped 15 3/4 cents to close at $3.50 1/2. Prices hit nearly three-month highs and closed at technically bullish monthly high closes on this last day of the month. The USDA estimated corn plantings would decline about 5 million acres below what farmers told the government they intended to plant in March. USDA estimated 92 million acres of corn were planted this year--3.2 million less than traders expected on average and below the lowest trade forecast. The decline suggests farmers took prevent plant insurance wherever they could in response to the combination of falling prices, worries about the impact the Covid-19 pandemic on corn use in feed and fuel, and uncertainty about Chinese commitments to buy U.S. ag goods. It may take increase weather risks to the yield potential in July to sustain the rally.
Soybeans: Soybean futures finished 17 1/4 to 20 3/4 cents higher today. November futures led the price gains. Meal futures rallied $5.20 to $7.30. Soyoil futures posted gains of 35 to 36 points in most contracts. USDA’s Acreage Report showed soybean plantings around 900,000 acres less than traders anticipated, while June 1 stocks were 6 million bu. less than expected. While those figures were slightly supportive, the bulk of today’s price rally came on spillover from the surge in the corn market. That suggests that corn likely needs to extend today’s rally or the soybean market could face profit-taking on Wednesday. Traders aren’t likely to get too concerned with weather and the soybean crop until August.
Wheat: Winter wheat futures strengthened in the wake of USDA’s reports. Winter wheat contracts ultimately settled in the upper half of their daily trading range but well off session highs with gains of 2 ¼ to 6 ¾ cents. HRS wheat futures posted even stronger gains and ended 8 ¼ to 12 ¼ cents higher. USDA made a big, 7.2 million-acre cut to its principal crop acres estimate from March intentions, with much of that cut coming out of corn. The surprise lifted all boats, wheat included. Spring wheat led gains in the wheat complex as USDA’s other spring wheat acreage estimate of 12.2 million acres was down 390,000 acres from March intentions and a much bigger cut than analysts anticipated.
Cotton: July cotton futures closed up 136 points at 60.98 cents today, with December futures gaining 125 points at 60.88 cents. Prices closed near the daily highs. The cotton market saw good buying interest today in the wake of a bullish USDA cotton acreage report. USDA estimated U.S. cotton plantings at 12.185 million acres, down 1.518 million acres from March intentions and roughly 1 million acres less than traders expected. Monday’s USDA crop progress report showed 41% of the U.S. cotton crop in good to excellent condition compared to 40% in the previous reporting week. Twenty-four percent of the cotton crop was rated by USDA as poor to very poor versus 25% last week.
Hogs: August lean hog futures closed up 57 ½ cents at $49.025 today on tepid short-covering after hitting a contract low on Monday. Lean hog futures are trying to shake off last week’s USDA Hogs & Pigs report that was bearish. The all hog inventory rose to the highest ever. Demand for pork is key but keeping hog slaughter plants operating and increasing production is needed the next two months to reduce the backlogged supply of hogs. Hog backlogs are estimated to top 1 million (possibly 2 million), signaling it will take several more weeks/months to work through the backlog. The pork cutout value fell another $1.54 at midday Tuesday, led by a drop in bellies.
Cattle: Live cattle and feeders closed lower, erasing earlier gains. August fell 20 cents to $96.275 and October were down 32.5 cents to $99.725. August feeders fell 65 cents to $132.85. After trading higher early, cattle futures followed the weak expiration of the June futures, which fell $3.35 to $91.65. There has been packer demand for deliveries against the June, but that failed to lend support into the expiration. The seasonal trend lower into July and production will be large. Better domestic and export demand will be required to sustain any rallies next month. Part of today’s choppy trade reflected the end-of-month positioning. With cash expected to trade lower this week, there will likely be little fresh buying interest to start July. Midday beef prices were mixed with Choice cutouts 23 cents lower at $208.13 and Select trading 76 cents higher at $201.47
Corn: Corn futures opened under pressure overnight, but traders were unwilling to push prices much lower given heat and dryness in the forecast and major USDA reports on tap tomorrow, which helped the market to reverse higher and extend gains. Futures ended high-range with gains of 7 ½ to 9 ½ cents. Friday’s Commitment of traders Report showed funds extended their net short position in the corn market last week, giving the market some fuel for short-covering this week, with the weather being a possible spark. Rains are possible midway through this week for the Midwest, but after that, heat and dryness is expected over the next 10 days. Therefore, coverage and accumulation of this week’s rains will be key. The other main focus is USDA’s Acreage and Grain Stocks Reports that will be released at 11:00 a.m. CT tomorrow. Analysts have a tendency to underestimate USDA’s corn acreage projection and quarterly grain stocks are expected to remind of the plentiful supply situation.
Soybeans: November soybeans closed up 1/4 cent at $8.61 1/2 and near mid-range after hitting a three-week low early on. December soybean meal futures fell $2.00 at $288.60 and hit a contract low today. December bean oil rose 38 points to close at 28.46 cents after hitting a four-week low early on today. The soybean futures market today paused and saw some fund short covering ahead of Tuesday’s USDA acreage and grain stocks reports that are expected to show an uptick in U.S. soybean planted acreage from the March intentions report and the second biggest June 1 inventory behind last year’s record. These end-of-June reports have a history of producing surprises, both bullish and bearish. There was no daily USDA export sales announcement for U.S. soybeans today, following recent daily purchases from China. Weekly U.S. export inspections for soybeans were reported at 324,512 MT today versus 255,810 MT reported last week
Wheat: December SRW wheat futures closed up 9 1/2 cents at $4.93 1/2 and December HRW futures ended the session up 8 1/4 cents at $4.49 1/4. Spring wheat futures narrowly mixed. Fund and other speculator short covering was featured today ahead of the USDA’s acreage and grain stocks reports on Tuesday morning, and following the winter wheat futures hitting contract lows last Friday. Wheat was also supported today by a smaller increase in Canadian planted acreage. Canadian farmers increased planted acreage to 25.0 million acres from 24.6 million last year but below the 25.2 million expected by analysts polled by Reuters, according to Stats Canada this morning. Russian wheat export prices fell last week as the harvesting of the new crop started. The market expects the new crop from the Black Sea to push wheat prices further down. Friday’s CFTC Commitments of Traders report showed larger-than-expected fund selling in wheat.
Cotton: Futures ended mixed on light volume. December cotton rose 13 points to close at 59.63 cents and near session highs. Futures fell in early trading on Monday as a spike in coronavirus cases in the United States stoked demand concerns for the natural fiber, ahead of the release of the USDA planted acreage data on Tuesday. Prices rebounded as U.S. equity markets and crude oil futures erased earlier losses and rallied. Of course, despite the increasingly adverse conditions now occurring across Texas, the market remains concerned about demand. Traders are waiting for USDAs acreage report on Tuesday. A Reuters poll shows analysts estimate 13.153 million acres of U.S. 2020 cotton plantings. The USDAs weekly crop progress report is due later Monday afternoon.
Hogs: Hogs rose, erasing earlier declines. August hogs rose 32.5 cents to $48.45 and October rose 42.5 cents to $47.42. Cash hogs opened firm with moderate negotiated numbers. Processors were a little more aggressive to start the day. Supplies of market-ready hogs are more than ample, but a sluggish economic recovery could put some pressure on the demand. Barrows and gilts at the National Daily Direct were 41 cents higher at midday. The CME Index rose 36 cents on Friday. Pork values were higher at midday – up $3.58 at $69.53. Bellies were nearly $23 higher at midday. Butts, ribs, and loins were all higher. Packer margins are estimated at $62.65 today, up from $60.30 a week ago, according to HedgersEdge.com.
Cattle: Live cattle futures finished 30 to 77 1/2 cents higher through the February contract. Feeder cattle posted gains of 20 to 90 cents through the January contract. Futures in both markets finished on or very near session highs. Cattle futures were choppy through midmorning before buyer interest started to pick up. June live cattle finished at $95.00 today, $1.21 below the average cash cattle price for last week. With tomorrow marking the final trade day for the contract, additional strength is possible, though the upside is limited. Deferred cattle futures are trading at premiums to the cash market, so the upside is likely limited until the cash market signals a low is in place.
Corn: July corn futures today closed down 1/4 cent at $3.17 and for the week lost 15 1/2 cents. December corn futures today fell 2 3/4 cents to $3.25 1/4 and hit a fresh contract low early on. For the week, December corn lost 20 cents. This was a dreadful week for the corn market bulls, and the serious technical damage inflicted on the charts suggests more downside price pressure in the near term. The big speculative fund traders early next week will be looking to build their short futures positions. Monday may see quieter dealings ahead of the important USDA reports on acreage and June 1 inventories next Tuesday. History shows these June USDA reports tend to produce higher volatility in their immediate aftermath. Traders are expecting the June 30 reports to show corn planted area fell about 1.85 million acres from March intentions, while June 1 inventories declined about 240 million bushels from last year, but reflecting the lowest March-May use in seven years.
Soybeans: August beans fell 5 1/2 cents Friday to close at $8.60, capping a 16-cent weekly drop. November futures fell 19 ½ cents this week to $8.60. August meal extend its weekly drop $2.70 to $285.30, capping a $4 weekly decline. August soyoil fell 1.29 cents this week to 27.41 cents. Favorable weather pushed soybeans lower this week and Chinese purchases were smaller than trade reports indicated. Prices extended losses at midmorning after the Wall Street Journal said U.S. meddling in Hong Kong, Taiwan, other matters could jeopardize Chinese goods purchases under the trade deal. USDA’s daily reporting service did announce private exporters sold 132,000 MT to China for new-crop delivery. China needs to be buying much higher quantities to reach its commitments under the Phase 1 deal. Next week’s focus will be on the USDA’s Acreage and Quarterly Grain Stocks Reports on June 30.
Wheat: Futures tumbled to new lows with December SRW prices falling 11 1/4 cents for the day and week to $4.84. December HRW fell 9 ½ cents on Friday to $4.41 and down 8 3/4 cents for the week. Spring wheat futures were down 26 ¼ cents this week. Futures fell on increased technical selling and liquidation amid an accelerating harvest and abundant global supplies. Expiration of July options and positioning ahead of the first notice day for delivery against the July contract added to pressure Friday. Prices accelerated lower after the Wall Street Journal reported on Friday that the U.S. intervention in Chinese interests could risk the Phase 1 trade deal and that spooked traders already worried about a surge in coronavirus cases. Traders will closely examine the acreage updates from the USDA on Tuesday and Stats Canada on Monday next week. Most are looking for small reductions in both nations from estimates in March.
Cotton: July cotton futures slumped 126 points to close the week, but price action was far less dramatic in other contracts to close the week, with deferred months settling 10 to 20 points lower and within recent consolidated trading ranges. December cotton edged 31 points lower for the week. Analysts polled by Bloomberg expect USDA to trim its cotton planted acreage estimate to 13.2 million on Tuesday, which would be a 500,000-acre decline from March intentions and a 540,000-acre retreat from year-ago. But a wide range of expectations signals a lot of uncertainty on that front. While cotton prices at their face value gave producers little incentive to plant the crop, farm programs may have. That said, top-producing Texas has 23% of its crop in “good” to “excellent” shape and 40% in the ”poor” to “very poor” categories, signaling poor yields could hold back production.
Hogs: Lean hog futures closed out the week on a sour note with losses of $1.65 to $3.525 today. Summer- and fall-month contracts posted new lows. For the week, August hogs plunged $4.675. A Wall Street Journal report saying China is subtly warning the U.S. that American pressure on Hong Kong and other matters could jeopardize the Phase 1 trade deal weighed on the hog market today. While China needs U.S. pork, the report rattled the markets, causing traders to remove more premium futures hold to the cash index. With the poor close to the week, bears carry momentum into next week’s holiday-altered trading schedule. USDA’s Hogs & Pigs (H&P) Report signaled kills will run about 12% to 13% above year-ago through July. Combined with increased carcass weights, that means there will be a lot more meat for demand to chew through.
Cattle: August live cattle futures closed down $0.05 at $96.025 and for the week were up $0.625. August feeder cattle futures fell $0.65 to close at $132.60 and for the week gained $0.05. While this week’s price action in cattle futures was not overly impressive, the bulls did manage to stabilize prices. Next week the bulls will try to build better support from signs of improving demand after the drop in beef prices slowed this week. Friday’s noon beef report showed Choice grade cutout value fell by 68 cents and Choice was down 17 cents. Movement was decent Friday at 95 loads. Beef export sales and shipments last week rose to the highest since January, a sign that beef prices have reached levels that are uncovering demand. Still, rallies will be limited until the cash cattle market finds a bottom.
Corn: July corn futures closed down 7 cents at $3.17 1/4 today and hit a six-week low. December corn fell 5 3/4 cents to $3.28 and hit a contract low. Today’s bearish price action is ominous for the corn futures market, likely prompting the big, speculative fund traders to increase short positions in the near term, especially as weather forecasts signal fewer chances for a blocking ridge to develop over the Midwest after rains later this week. USDA’s weekly export sales report this morning showed old-crop U.S. corn sales of 461,700 MT, up 29% from a week ago but 11% below the four-week average. China did buy one cargo of U.S. corn last week, but total sales were disappointing and a sign that South America exporters are becoming more competitive. New crop sales totaled 77,000 MT.
Soybeans: Soybean futures faced pressure throughout trading session, but the market was able to work back to a high-range close with losses ranging from 1 cent in the August contract to 3 cents in spring 2021 contracts. Another day passed without a daily soybean sales announcement from USDA, which again has traders concerned about whether China will followthrough on its purchase commitments, despite high-level assurances big purchases are coming. In addition, soybean export sales of 601,900 MT for 2019-20 and 560,700 MT the week ending June 18 were in the lower half of the range of expectations, with new-crop sales down notably from last week. Soybean exports were also down 19% from the prior four-week average at just 302,400 MT. Besides tense relations with China, the market is also noting that South American supplies are increasingly competitive with U.S. supplies.
Wheat: SRW wheat futures finished mixed to mostly firmer. HRW contracts posted losses of a penny-plus to 3 cents. HRS futures ended mostly 4 to 5 cents lower. SRW wheat futures were boosted by corrective buying today as traders covered short positions and unwound short SRW/long HRS spreads. Traders also added to long wheat/short corn spreads, despite the wide premium SRW contracts hold to corn futures. The December SRW/December corn spread pushed out to $1.67 1/4 on the close, though it was over $2 about two months ago. Weekly wheat export sales were in line with expectations at 518,700 MT. China took delivery of 92,200 MT of U.S. wheat during the week but was not a buyer.
Cotton: July cotton futures closed up 15 points at 61.81 cents and December futures gained 49 points to close at 59.70 cents. The cotton market bulls are showing resilience late this week, even as world stocks sputtered to their lowest levels in over a week on Thursday, as a surge in U.S. coronavirus cases and an IMF warning of a nearly 5% plunge in the global economy this year hit the stock market bulls. However, if the world stock markets continue to erode, cotton futures prices are likely to follow suit. Prices are likely to move mostly sideways Friday and Monday, as traders await next Tuesday’s USDA U.S. cotton acreage update. Spotty showers in Texas this week have provided few benefits and drought there is expanding.
Hogs: August lean hog futures rose 7.5 cents at $51.325 today and closed near mid-range as the bulls try to stabilize the market after it hit a contract low on Monday. Trading was quieter today ahead of this afternoon’s USDA’s pig crop report. Pork cutout values rose 38 cents at noon Thursday on more modest movement of 162.97 loads. USDA reported this morning that U.S. pork export sales fell 38% from the previous week but were still 3% higher than the four-week average. Shipments fell 10% below the prior four-week average. China was the biggest buyer after Mexico, and the larger destination for U.S. pork last week. Lean hog futures price rallies have struggled this week after China stepped up inspections of meat imports and demanded shippers from all origins of meats, food and grains to certify that those shipments are free of the coronavirus. The development is somewhat disquieting in there may be no science to support the request.
Cattle: Live cattle ended mixed and near midrange and feeders were slightly higher. August live cattle fell 27.5 cents to close at $96.075 and August feeders were up 32.5 cents at $133.25. Another choppy session without much direction. The market found early support from improving export sales data. Beef export sales and shipments last week rose to the highest since January, a sign that beef prices have reached levels that are uncovering demand. China was a very small buyer of U.S. supplies. Meanwhile, Chinese trade data showed the country’s beef imports for the first five months of the year are up 46% from year-ago. The country did not provide a breakdown by origin. Daily wholesale beef sales have been showing increasing grocer demand. However, boxed beef prices were lower at midday. Choice cutouts were $1.75 lower at $207.94 and Select was $1.11 lower at $200.58.