After the Bell: Down Day for Many Commodities

Posted on 09/17/2019 3:39 PM

Corn: December corn futures closed down 6 cents at $3.68 today, and near the daily low. Prices were pressured in part today after USDA Monday afternoon reported better crop conditions in its weekly Crop Progress Report. As of Sunday, USDA reported 93% of the U.S. corn crop was in dough, 68% was dented, and 18% was mature—5, 19 and 20 percentage points behind their five-year averages at this point in the season, respectively. USDA conditions plugged into the weighted Pro Farmer Crop Condition Index showed corn improved 1.2 points to 348.3 points.

Soybeans: Soybeans ended lower but off session lows. November beans were down 6 ¼ cents to $8.93 3/4. December soybean meal fell $1.10 to $297.80 and December bean oil fell 29 points to 29.99 cents.  The market was pressured by lower crude oil prices after energy prices surged on Monday, and on improved U.S. crop conditions. USDA conditions plugged into the weighted Pro Farmer Crop Condition Index show the soybean crop rose 0.6 points. The CCI rating is 24.4 points below the five-year average. But crops remain behind in development. About 95% of the U.S. soybean crop was setting pods (100% on average) and 15% was dropping leaves (38% on average).

Wheat: Wheat futures faced pressure through the day and into the close, with futures settling well off session lows but in the red, with HRW wheat down 5 ½ to 6 ¾ cents, SRW wheat 3 ¾ to 4 ½ cents lower and HRS wheat down roughly 2 cents. Corn and soybean futures faced pressure today, which spilled over to the wheat market. The wheat market’s upside remains capped by a need for U.S. prices to remain competitive in a global market where supplies are plentiful. Some areas of dryness are developing around the world, including in important wheat producing areas like Australia, Brazil, Argentina and the Black Sea Region, but so far that has not been enough to push up global prices.

Cotton: December cotton settled down 1.21 cents at 61.38 cents and in the bottom half the daily range of 60.8 and 62.56 cents. Futures prices fell nearly 2% on Tuesday, dragged down by falling crude oil prices and a lack of follow through buying of the natural fiber after hopes of a deal between the United States and China last week. Oil prices dropped 6% on Tuesday after Saudi Arabia's energy minister said the kingdom has fully restored its oil production hit by an attack this weekend. Lower oil prices may help to keep synthetic fiber competitive with cotton.

Hogs: Futures fell sharply lower to limit down. October hogs fell $1.525 to $62.10 and December dropped the $3 limit to $67.675. Slaughter rose to 975,000 head during the first two days of this week, up from 970,000 a week ago and 834,000 head a year ago. The CME Lean Hog Index fell to a preliminary $57.49, a substantial discount to the October and December futures. Cash prices are searching for a low but until that occurs the futures will remain defensive.

Cattle: October live cattle futures closed up $1.35 at $99.35 and December closed up $1.275 at $105.30. November feeder cattle futures closed up $1.875 at $135.05. Cattle slaughter rose to 117,000 head Monday from 113,000 a year ago, suggesting improving beef demand. Slaughter fell to 629,000 head last week down from 656,000 a year ago, the smallest since the mid-August fire at the Tyson plant in Kansas. Wholesale beef cutout values rose today on light sales, with Choice up $1.39 and Select gaining 42 cents. The $25.02 premium Choice holds to Select at present continues to suggest the current supply of market-ready animals.

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