After the Bell: Corn, Beans Weaker Friday, Capping Negative Weekly Close

Posted on Fri, 08/07/2020 - 14:44

Corn: December corn futures closed down 3 cents at $3.20 3/4 today and near the daily and weekly low and a new contract low. For the week, December corn fell 6 1/4 cents. It was another dreadful week for the corn bulls, amid a dearth of fresh, positive news for the market. Any rallies will be capped by rising yield ideas amid high U.S. crop condition ratings and few threats to grain-filling in August. The big event next week will be Wednesday’s monthly USDA supply and demand report and the first field-test-based production estimates from the agency. The wire service polls see the trade is looking for U.S. corn production to rise on average about 170 million bu., to 15.17 billion bu., from July’s forecast. Both U.S. and world corn ending stocks in the 2020-21 season are seen rising. U.S.-China relations will remain on the front burner of the grain markets in the coming weeks, amid deteriorating developments this week.  

Soybeans: November soybeans fell 10 1/2 cents to $8.67 1/2 and down 25 cents this week. December meal dropped $1.60 to $286.80 on Friday and lost $10.50 this week. December oil fell Friday and ended down 1 point this week to 30.75 cents. Futures fell for a fourth consecutive session, touching the lowest since June 30, as expectations are building that growing supplies will outstrip demand even as top buyer China steps up its purchases. Soymeal futures fell to new contract lows. Prices will key next week off rainfall amounts across Iowa from showers forecast this weekend. The wire service polls for the Aug. 12 USDA reports are out. The trade is looking for U.S. production to rise by an average of 123 million bu. to 4.258 billion bu. in next week’s report. Both U.S. and world soybean ending stocks in the 2020-21 seasons are seen rising. Soybeans showed a very short pop to the upside this morning after USDA announced new sales to China for a third straight session. That was the biggest single-day sale since June 11 to China.  

Wheat: December SRW wheat futures ended down 4 ¾ cents at $5.03 1/2, down more than 35 cents this week. December HRW wheat futures lost 25 3/4 cents this week to close at $4.37 1/4. September spring wheat futures dropped 19 1/2 cents this week to close at $4.94 1/2. Wheat futures fell again with HRW and spring wheat futures falling to new lows. Prices bounced off session lows on news Pakistan is tendering for 1.5 MMT. Pakistan allowed private sector wheat imports in June to cool domestic wheat and flour prices.  Euronext wheat futures fell on Friday to a fresh one-month low in step with U.S. futures as improved harvest prospects in several exporting countries underscored ample global supply and eclipsed a smaller expected European Union crop. As world demand has slowed due to Covid-19, the function of the market is to seek prices that build demand.  

Cotton: December cotton futures tumbled 249 points to 62.36 cents today, near the session low and closing at a technically bearish weekly low-range close. December cotton fell 30 points this week. The cotton market is likely to see some follow-through selling pressure early next week following combination punches Friday that sent the bulls to the ropes. Deteriorating relations between the U.S. and China got even worse Friday when the U.S. put a pending U.S. ban on transactions with the Chinese owners of messaging app WeChat and video-sharing app TikTok. A stronger U.S. dollar index, a big drop in gold prices, falling crude oil prices and a weaker stock market also hit the cotton futures hard today. Technically, a bearish double-top reversal pattern appears to be forming on the daily bar chart for December cotton futures.

Hogs: Lean hog futures ended the week on a strong note, with August through May futures settling 70 cents to $1.775 higher, with the October contract leading gains. Thanks to today’s gains, October lean hogs climbed $1.35 for the week. Today’s price action went a long way in signaling the lean hog market has put in a low, with prices pushing above the 20-day moving average and registering a new high for the month. A move above the July high and the 100-day moving average just above that level would be positive technical signals next week. The market will also take note of any changes to USDA’s export or production forecasts in the midweek WASDE update, with the market still working to get a handle on the overall impact of Covid-19 on the hog and food service sectors.

Cattle: August live cattle futures closed up $0.175 at $102.80 today. October live cattle finished the day down $0.525 at $106.45, for a technically bearish weekly low close, and for the week fell $1.425. October feeder cattle futures ended Friday’s session down $0.375 at $146.40, also at a bearish weekly low close and for the week lost $0.25. The cattle market bulls faded a bit this week and need to step up and show some fresh power next week to keep the price uptrends on the daily bar charts alive. Technically, the bulls can argue this week’s price action was just consolidation on the charts after prices had rallied significantly since mid-June. One positive heading into next week is that cash cattle prices this week traded generally $1 to $3 higher.