After the Bell: Choppy Soy Trade Uncovers Buying on Early Price Weakness

Posted on Thu, 11/19/2020 - 14:58

Corn: December corn fell 3 ¼ cents to close at $4.22 ½, with March down 3 ¼ to $4.27 ¼. Futures pared morning losses by the close but still finished below the opening range. March futures failed to rise above key resistance at last week’s high of $4.35 3/4 yesterday, putting in motion some profit taking, despite December futures rising to new contract highs. USDA did not announce any daily private exporter sales, tempering the support from the weekly export sales data that beat trade expectations.  USDA reported corn sales rose 11% from the prior week to 1.089 MMT, topping pre-report estimates for 600,000 MT to 1.0 MMT. China bought 174,700 MT last week. Some rains are forecast in Brazil and Argentina, but recent forecasts have overstated actual amounts.   

Soybeans: January soybeans closed up 1 3/4 cents at $11.77 1/2 today. March meal futures closed down $1.40 at $389.10 and March soybean oil futures gained 27 points at 38.13 cents and set another new contract high. The soybean and meal futures markets saw normal pauses today, amid the solid price uptrends that remain firmly in place. USDA this morning reported weekly U.S. soybean export sales fell 6% from a week earlier to 1.388 MMT but that topped trade estimates for 600,000 to 1.2 MMT. China bought 1.061 MMT last week, which provided support for the turnaround this morning after a week of no daily sales announcements. USDA failed to announce any new daily export sales today.   

Wheat: Wheat futures finished low-range with losses of mostly 5- to 7-plus cents in SRW contracts, mostly around 9 cents in HRW contracts and 4 cents in the HRS market. With the corn market facing corrective selling today, wheat futures were without their strongest recent support. Wheat futures simply don’t have the fundamentals to generate much buyer interest on their own. Weekly export wheat sales were a marketing-year low at just 192,400 MT. The fact China was the buyer of 125,000 MT was offset by the paltry overall total. Despite the recent drop in the U.S. dollar, U.S. wheat prices aren’t competitive on the global market.

Cotton: December cotton futures closed down 36 points at 69.32 cents and the March contract lost 16 points to close at 71.67 cents. Some profit taking was featured today, amid a still-solid price uptrend on the daily bar chat. Mild selling pressure also came from a wobbly U.S. stock market today and news that U.S. jobless claims rose a higher-than-expected 742,000 in the latest reporting week.USDA today reported U.S. cotton net sales of 131,400 running bales (RB) for 2020/2021 were down 45 percent from the previous week and 40 percent from the prior 4-week average.  

Hogs: Futures tumbled to 10-week lows. December hogs dropped $2.10 to $63.70 and February futures were down $2.85 to $63.05. Rumors about packing plant slowdowns or closures due to COVID-19 sent futures sharply lower. Plants are well prepared and weathering the rise in COVID cases better than other areas.  But that is not stopping the fears that rippled through the livestock markets today. No one is interested in standing in the way of fear-driven selling and active fund long liquidation. Slaughter today was up 8,000 head from a week ago and for the week is up 32,000 head, so no evidence of any slowdowns. Export sales of 28,900 tons were down 32% on the week, mainly to Mexico, Canada, and South Korea. China bought 2,100 tons, but also canceled on 1,400 tons.   

Cattle: Live cattle futures settled low-range but off session lows with losses of $1.975 to $2.625 through the August contract. Feeder cattle settled $1.75 to $2.40 lower. The market dropped sharply amid rumors about packing plant slowdowns/closures due to Covid-19 as infections continue to rise at a breakneck pace, with the Midwest particularly hard-hit. More and more states are closing schools and shutting down restaurants for in-person dining. Today’s kill of 119,000 head was down just 1,000 head from week ago and up 4,000 head from year-ago, so the slaughter numbers don’t seem to reflect any disruption.  Otherwise, fundamental news was generally bullish for the cattle complex today, with USDA reporting weekly beef export sales of 46,400 MT for 2020 (a marketing year high) and 14,100 MT for 2021. Meanwhile, Choice beef jumped another $1.94 this morning, with Select climbing 27 cents.