After the Bell: Beans Rally as Meal Leads Higher; Grains Close Lower

Posted on 12/05/2019 3:19 PM

Corn: Corn futures finished with losses of 1 1/4 to 2 1/4 cents and on session lows for the March through December 2020 contracts. The December 2019 contract that is in delivery closed 3 1/4 cents lower. Corn futures were unable to pull support from strength in the soybean and soymeal markets today. Weakness in the wheat market added pressure to corn. Traders were disappointed by this morning’s weekly export sales tally, which totaled just 546,100 MT, which was down 32% from the previous week and 18% from the prior four-week average. But considering corn’s export struggles and the fact it was a holiday week, the performance wasn’t as poor as traders believed. Still, it’s going to take a strong rebound in corn export demand to entice bulls. At a minimum, export demand must be strong enough to signal prices are “low enough.” That hasn’t happened yet.

Soybeans: Soybean futures enjoyed followthrough buying today, with the charts looking like futures could be working on a v-bottom reversal. Futures settled 5 ¼ to 6 ¾ cents higher in old-crop contracts, which was in the upper half of their daily trading range but off session highs. A surge in soymeal futures helped push soybeans higher. Soyoil finished steady to marginally higher. Soybean futures have bounced off Monday’s low, amid ideas the downside has overdone with the possibility of a South American weather threat and a U.S./China trade deal on traders’ minds.  Reports that a large Argentine crusher is having financial difficulties and had to liquidate existing short hedges in soymeal sent meal prices surging. The uncertainty of currency, export taxes and recent large cash purchases from growers have combined to create a financial problem for the crusher.   

Wheat: March SRW wheat futures lost 3 3/4 cents today at $5.23 3/4. March HRW wheat futures were down 5 cents today at $4.35 1/2. Spring wheat futures closed mostly 1 ¼ cents lower. The wheat market bulls have faded a bit this week after prices last week hit 3.5-month highs. Bulls want to focus on the tightening global supply situation and rising global wheat prices that have made U.S. wheat slightly more competitive on the world market. However, weekly U.S. wheat export sales fell to 228,100 metric ton (MT), down 45% from the prior four-week average. Shipments fell to a marketing year low, pressuring futures prices today.  

Cotton: Cotton futures closed narrowly mixed with most contracts finishing lower and near session lows. March cotton fell 19 points to close at 64.51 cents. Prices tried to rally today on optimism China and U.S. negotiators can find a path to making a deal before the next round of U.S. tariffs are slapped on Chinese imports on Dec. 15. Prices slipped back into the red by the close as U.S. export sales slowed during the Thanksgiving-shortened trading week. USDA reported net sales of 163,700 bales sold for export last week, down 36% from the prior four-week average.  

Hogs: December lean hogs closed down $0.30 at $61.575 today, while February futures fell $0.85 at $67.575. The hog futures bulls just cannot get on track despite some positive underlying fundamentals in the market at present. Cash hog bids rose an average of 71 cents nationally on Wednesday. The pork cutout value Thursday rose by $3.09, led by big gains in bellies. Movement was a moderate 149.82 loads. USDA this morning reported net pork sales of 30,600 MT in the week ended Nov. 28, up 20% from the prior week and 5% better than the four-week average. Mexico bought 10,900 MT and China purchased 10,300 MT. However, shipments slowed 22% from big exports the past four weeks. Also, for 2020, USDA reported net sales reductions of 1,400 MT after China cancelled 8,500 MT.

Cattle: Cattle futures closed mixed today. February live cattle rose $0.425 to $124.60 and January feeders were off $0.325 a $140.55. Wholesale beef cutout values were down again Thursday with Choice falling $1.11 and Select down $1.32. Sales at midday were moderately active. It looks like cash markets will be fully steady or better this week after rising $2 to $3 last week.  USDA’s weekly export sales report showed beef sales plunged to 500 MT for 2019 with 2020 sales limited at 11,700 MT. Shipments fell 27% below the prior four-week average. Packer competition this week is rising as packers seek to replenish inventory. Cattle inventory gets burned up fast with a kill pace this big in December, increasing the fear about winter storms in January causing some hiccups in supplies when supplies will tighten.  

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