Corn: Corn futures finished high-range with gains of 3 1/4 cents to a nickel through the July contract. Corn futures faced light selling pressure through overnight trade, but selling dried up and buyer interest built through daytime trade. The followthrough buying after Monday’s strong performance suggests the corrective rebound could extend further. How far and how long the corrective rebound extends likely depends on funds, who were big buyers of corn yesterday and moderate buyers today. Managed money accounts were net short 162,551 contracts of corn futures as of Sept. 24. Since then, they’ve likely covered around 60,000 contracts, so there’s still plenty of “room” for more near-term short-covering. Recent heavy rains and oncoming cold weather are raising some crop concerns. Rains are keeping the crop from drying down and could lead to some stalk quality problems. The oncoming cold front may cause some freeze/frost damage in the far northern locations of the Corn Belt, with northwestern areas most at risk of crop damage give the delayed maturity rates.
Soybeans: November soybeans closed up 13 1/2 cents at $9.19 1/2 today and hit a nine-week high. December soybean meal futures finished up $8.00 at $309.00 and hit a two-month high. December soybean oil futures lost 20 points to 28.88 cents. Strong gains in soybean meal futures today helped to confirm notions this week's strong up-move in soybeans will lead to still more upside in the coming weeks. The wet, late harvest last year curbed U.S. production more than USDA estimated. USDA said the smaller Sept. 1 stocks estimate released Monday means it overestimated the 2018 soybean crop by 116 million bushels as both harvested acres and yields were reduced. Because USDA overstated last year’s crop that has raised questions about this year’s crop forecast, which the agency will be updating Oct. 11. While carryover supplies on September are still more than double a year ago and record large, the market now must consider what impact the adverse weather had on this year’s yields. Private Chinese buyers were estimated to be bidding for 750,000 MT to 1 MMT Monday after the government issued 0% import quotas for upwards of 1.8 MMT of the oilseed, according to commercial sources on Monday. USDA did not confirm any new sales in its daily reporting service, but traders expect those sales to be announced yet this week.
Wheat: Winter wheat closed mixed and spring wheat fell. December SRW futures rose 3 cents to $4.98 ¾, and December HRW futures fell 3 ½ cents to $4.11 ½. December spring wheat fell 11 ½ cents to $5.33. Soft red wheat will have the tightest supply and demand balance this season and it continue to firm relative to the other varities. HRW futures fell today after the higher Sept. 1 stocks report on Monday showed implied wheat feeding fell well below trade ideas. That led to traders unwinding long HRW/Short corn positions today. However, now HRW is looking more competitive in feedlot feeding programs going into the winter, especially if next week’s USDA production report shows a smaller U.S. corn crop than forecast a month ago. Rallies in corn and soybeans should help to carry wheat to higher levels. Exports have started better than some expected this season and will need to show further improvement to sustain the recent bounce off contract lows. World prices are firming and that suggest little downside risk until current small weather problems in Argentina, Australia, and parts of the Black Sea region and harvest delays in Canada are more clearly defined.
Cotton: For a third straight session, cotton erase early declines to close near session highs. December cotton rose 15 points to 60.98 cents. Cotton prices were pressured until late in the session by the downturn in world equity markets and the World Trade Organizations lowering its economic outlooks into 2020. The market also drifted lower in early trading on speculation recent rain and forecasts for warm weather will help some of the smaller bolls develop and produce cotton this year. Commercial buying is slowly increasing, suggesting improved export demand may be developing. However, the market will need fresh evidence of that buying in the weekly export sales report to take out the mid-September highs.
Hogs: October lean hog futures fell $2.90 to $62.55 today. December lean hogs lost $2.675 to $69.925. Today’s price action quickly took back Monday’s solid gains. Still, the market is trending up from the September low and today’s price action is likely just a downside correction in the choppy uptrend. The market hog inventory reported in last Friday’s USDA Quarterly Hogs & Pigs report came in 0.5% higher than traders expected at 3.5% above year-ago, signaling record hog supplies ahead. Last week’s hog kill was the second-largest on record at 2.646 million head and this week should be close to that level. Packer margins have increased quickly the past five weeks as cutout values firmed and cash hog bids fell. The national cash hog markets rose 64 cents and Iowa/Minnesota cash bids rose 82 cents. Pork cutout value rose a solid $2.78 at midday today, led by strength in bellies, ribs and picnics. Sales were 220.66 loads.
Cattle: Live cattle futures saw two-sided trade today before setting 5 cents higher in the front-month and 5 to 57 ½ cents lower in deferred months. Feeder cattle faced pressure for much of the day and ended low-range and down 75 cents to $1.75. Live cattle futures appear to be marking time as traders wait for cash markets to pick up and align themselves with the premium futures have built in. Outbreaks of African swine fever in Southeast Asia and Eastern Europe are expected to prop up already solid export demand for U.S. beef, helping to lessen the burden of ample supplies. Feedlots have done a good job of keeping marketings current, even with one of the nation’s biggest processors shuttered near-term. Strong packer profit margins and the solid retail demand that implies has been helpful to that end. Boxed beef prices strengthened this morning, with Choice surging $1.56 and Select edging 10 cents higher. That widened the already wide spread between the values. But traders are also keeping an eye on the greenback, as the currency hit its highest level in two years this week. That makes U.S. products, including beef, less competitive globally. Rising corn prices put some pressure on the feeder cattle market as that points to rising feed expenses.