After the Bell: Corn and Soybeans Continue to Struggle Amid Non-threatening Forecast

Posted on 09/06/2019 2:48 PM

Corn: Corn futures finished 3 to 4 cents lower in most contracts today. For the week, December corn futures dropped 14 1/4 cents and posted a new contract low. Funds added to their net short stance in the corn futures market this week. Until the fund selling subsides, it’s going to be difficult for the corn market to put in a bottom. Given forecasts calling for warm temps and scattered rains across the Corn Belt next week, there’s no incentive from a weather standpoint for funds to actively cover short positions. USDA isn’t likely to lower its corn yield much in the Sept. 12 Crop Production Report. And old-crop carryover is going to increase.

Soybeans: November soybeans closed down 3 3/4 cents at $8.57 3/4 and closed at a technically bearish weekly low close. Soybean meal was down $1.50 in the December contract and bean oil closed steady to mildly higher. For the week, November soybeans dropped 11 1/4 cents. Next week’s forecast remains non-threatening for the Corn Belt. Colder weather is forecast to move into the region by next weekend, but temps are not expected to get low enough to end the growing season. Weather still gets a bearish read by soybean traders.

Wheat: December SRW wheat futures closed down 2 1/2 cents at $4.63 3/4 and for the week gained 1 1/4 cents. December HRW wheat futures closed the session down 1/2 cent at $3.93 1/4 and for the week lost 4 cents. December HRS futures ended down 7 3/4 cents today at $4.94 1/4 and for the week gained 2 1/2 cents. The wheat market has been trending lower since late-June. Look for more of the same in the near term amid plentiful global supplies and slack worldwide demand for U.S. wheat -- even though U.S. wheat prices have become more competitive on the world market.

Cotton: Cotton futures faced pressure to close out a week that featured an extension of the recent sideways price action. Futures ended 24 to 54 points lower for the day, with the December contract 25 points for the week. Hurricane Dorian failed to spur much buying in the cotton market this week as the storm skirted primary producing areas of Georgia. Attention next week will shift to USDA’s Sept. 12 reports. A plunge in USDA’s crop condition ratings over the past month suggest a big drop in USDA’s yield estimate is likely. That could help push futures out of their sideways trading range.

Hogs: October lean hogs closed down $2.80 at $63.50 and December futures dropped the daily trading limit of $3.00 to $62.475. Both contracts closed at technically bearish weekly low closes. For the week, October hogs only lost 2 1/2 cents. Lean hog futures saw heavy pressure from ongoing weakness in the cash hog market. The average national direct cash price was $1.28 lower Thursday and another 80 cents lower this morning. October hog futures have moved back to a discount to the cash index after briefly pushing above it, suggesting traders sense more cash pressure is coming.

Cattle: Live cattle futures closed sharply lower, with the October contract ending down the $3 daily trading limit. As a result, trading limits expand to $4.50 for next Monday’s session. Feeder cattle finished $1.025 to $1.425 lower through the January contract. For the week, October live cattle futures plunged $4.05 and posted a new contract low. October feeder cattle firmed a dime for the week. Bears carry strong momentum into next week’s trade. Unless something bullish surfaces or attitudes completely shift, followthrough selling is likely early next week. The cash and product markets likely need to put in lows before buyers return to futures, as the path of least resistance is down and funds are fully in sell mode.

 

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