After the Bell: Corn & Beans Rebound on Trade Optimism

Posted on 02/12/2019 3:09 PM

Corn: Corn futures end with solid gains and in the upper end of today’s range. March corn rose 5 ½ cents to close at $3.78 ¼ while December closed back above $4, gaining 4 ¼ cents to $4.02. Futures had a strong upside push today as export demand improved and amid signs the U.S. and China may reach a trade accord that could lead to stepped-up Chinese purchases of U.S. corn, ethanol and DDGs.  The market started firmer after USDA announced private exporters sold 122,376 metric tons of corn (MT) to unknown destinations for delivery before Sept. 1. Also, South Korea bought 138,000 MT of optional-origin corn overnight. Prices added to early gains after President Donald Trump said on Tuesday that he could see letting the March 1 deadline for reaching a trade agreement with China slide a little.

Soybeans: Soybean futures enjoyed an upside day of trade, with futures extending gains as the day progressed. The market settled 10 ¾ to 12 ½ cents higher, with nearbys leading to the upside. Soymeal posted gains of $4.30 to $4.50, while soyoil posted modest gains for the day. Word that President Donald Trump would consider pushing back the March 2 deadline for raising tariffs on Chinese goods if the two sides are close to a deal lifted soy futures, as well as a host of other markets today.

Wheat: SRW wheat prices ended the day up 1 3/4 to down 3/4 cents, while HRW contracts lost 1 3/4 to 4 cents in the nearby contracts. Spring wheat futures closed 1 to 3 ½ cents higher through the September contract. Some mild short covering was featured in SRW wheat today, along with a bit of spillover buying interest from higher corn and soybean futures prices. HRW futures continue to struggle with U.S. prices not being competitive with European and Russian wheat prices. Futures traders are also waiting on details from two tenders this week.

Cotton: March cotton closed down 77 points, with the May contract off 65 points. Both contracts hit 15-month lows today and closed near their daily lows. Chart-based selling was featured in the cotton market again today. The cotton market got no help from bullish outside markets today that included a lower U.S. dollar index, a solid rally in the stock market and higher crude oil prices. This is not a good sign for the cotton market bulls regarding price action the rest of this week.

Hogs: Futures closed mostly higher but down from the day’s best levels. April futures rose $1.25 to close at $60.325 while Just jumped $1.575 to $77.225. Hog futures were exceptionally overdone on the downside, essentially eliminating any Chinese pork import premiums that were added to the markets after the new broke last August about the outbreak of African swine fever in China. U.S. President Donald Trump said on Monday that the United States has a big team in China trying to reach a trade agreement and that Beijing very much wants to make a deal. Trump also indicated that he would be willing to let the March 1 deadline for an agreement slide a little if a deal can be reached.

Cattle: Live cattle futures closed down 42 1/2 cents in the April contract and down 22 1/2 cents in the June. Mild profit taking was featured following recent gains that saw the nearby futures contracts close at contract high closes on Monday. Feeder cattle futures finished the day down 32 1/2 cents in the March and down 7 1/2 cents in the May. Buyer interest in the cattle market is light so far this week, despite firm cash trade last week in the $125 range and inclement weather across the country’s midsection. While traders generally expect cash cattle prices to be steady to firmer this week, packers may be reluctant to raise cash bids again if retailer buying dries up.


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