After the Bell: Wheat Leads Grains Higher: Livestock Rally Stalls

Posted on 03/25/2020 3:11 PM

Corn: Futures ended slightly higher but near midrange. May corn rose 1 1/4 cents to $3.48 1/2 and December gained 2 cents to $3.67 1/4. Futures pushed higher for a second session but buying interest continues to be curbed by worries ethanol producer demand for corn will continue slow. This morning’s daily USDA export sales reporting service announced that private exporters sold 138,000 metric tons (MT) of corn for delivery to unknown destinations during the 2019-20 marketing. This may be confirming market rumors of new business with China and helped prices strengthen earlier today. China may have booked another 250,000 MT of U.S. Gulf corn yesterday afternoon. This would take total recent purchases to 1 MMT after USDA announced sales of about 750,000 MT to China last week.  China’s corn imports from all origins in January-February rose nearly 65% to 930,000 MT from a year-ago total.  

Soybeans: Soybean futures finished 1 to 5 1/4 cents lower in the May through August contracts and 3/4 to 3 cents higher in the September through January contracts. Meal futures also ended mixed, while soyoil finished 9 to 16 points higher. Buyer interest in old-crop soybean futures dried up after four days of corrective gains. Traders hit the pause button and took some profits out of the long side of the market after gains earlier in the session. While there is still the possibility South American soybean shipments could be delayed amid the coronavirus situation, trades don’t want to push the market too far to the upside.  

Wheat: May soft red futures prices closed up 18 1/2 cents at $5.80 today and hit a two-month high. May hard red winter wheat futures finished with gains of 10 1/4 cents at $5.01 and also notched a two-month high. Spring wheat futures rose 2 to 3 cents. Wheat futures came on strong at the finish today as traders bought the early dips in prices. May SRW futures hold to a 13 1/4-cent premium to July--up from a small discount just a week ago. The growing premium of May over July is a bullish sign of underlying demand and increased fund buying. Flour millers have moved from “just-in-time” inventory management to “just-in-case” stockpiling. 

Cotton: Futures rose for a second day from contract lows but only finished mid-range. May cotton gained 55 points to 53.44 cents and December rose 39 points to $55.04. The precipitous drop in cotton the past three weeks pushed the Adjusted World Cotton Price under the loan rate for the first time in years and signaled price declines were overextended. Today’s range was well contained inside of Tuesday’s range, underscoring that much of the buying was short covering. Cotton largely followed the corrective rebound in stocks today. After a shaky start this morning, stocks added to yesterday’s biggest rally since 1933.  

Hogs: Prices opened higher but closed lower and near the daily lows. April hogs fell 57.5 cents to $65.85 while June fell $1.25 to $71.75.  Cash hogs opened steady with moderate negotiated numbers.  Supplies of slaughter hogs remain heavy and the national average prices slipped 8 cents today. Midday pork cutout values fell $2.60 on share declines in butts and bellies, with lower picnics and ribs offsetting gains in hams and loins.  Hog weights increased again this past week to 286.2 lbs.; that’s up 0.5 lb. from last week and up 0.2 lb. from a year ago.  Packers continue to be careful about purchasing in case a plant would be forced to shut down due to the coronavirus outbreak. 

Cattle: June live cattle futures prices closed down $0.70 at $96.325 today. April live cattle futures gained $2.30 at $108.45. May feeder cattle futures were down $0.40 at $129.10. Live cattle futures opened sharply higher to up the daily $4.50 trading limit but then ran into some profit-taking from the short-term traders, which is not unexpected given this week’s sharp gains. Nearby live cattle futures still have a double-digit discount to expected cash price trade this week. Direct cash cattle trade activity remains relatively quiet with prices on a few head trading up $5 to $8 and asking prices much higher. Boxed beef trade at midday Wednesday saw Choice cutouts up 17 cents and Select 21 cents higher, on movement of 84 loads. The Choice-Select grade spread is presently at $10.79.

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