Corn: December corn futures finished 4 1/2 cents lower, with the March contract 3 1/4 cents lower and May future down 2 cents. Far-deferred contracts posted fractional losses. Corn futures made a feeble attempt to push above unchanged during early daytime trade, but spent much of the day below unchanged amid a lack of fresh supportive news. Traders are still waiting on damage assessments from the freeze/frost event and more specifics on the China trade deal. That gave traders an excuse to let the market pause again today and to take some profits out of the long side of the market. While there are plenty of supply (crop) uncertainties, the demand side of the market remains a concern. Weekly export inspections totaled only 470,612 MMT, which was at the low end of modest pre-report expectations. Since the start of the marketing year on Sept. 1, corn inspections are running 63.9% behind year ago. In addition to sluggish exports, ethanol production is also struggling amid poor margins.
Soybeans: November soybeans closed down 6 1/2 cents at $9.34, on mild profit taking after prices hit a nearly four-month high on Monday. December soybean meal closed down $3.10 at $307.80 and December bean oil was up 39 points at 30.39 cents. Uncertainty about Chinese demand prospects after last week’s trade talks is being offset by Midwest weather/harvest concerns. Bloomberg News reported today China wants real U.S. tariff cuts to enable them to secure $50 billion of U.S. ag products. China would only make that move if President Trump rolls back tariffs put in place since the trade war began, the report said. However, reports out of China said both countries are on the same page regarding progress made at last week’s trade negotiations in Washington. Cold, wet weather probably had a much bigger impact on soybean yields than corn during the past week across the Midwest. Farmers who delayed planting in waterlogged fields this spring face a new threat as they race to harvest their crops. Snow and high winds over the past several days buffeted northern farm belt states where many farmers faced historic planting delays last spring. The early blizzard book-ended a trying year for U.S. farmers. Harvest activity has finally started picking up for many farmers this week. This afternoon's weekly USDA crop progress report is expected to show U.S. soybean harvest at 25% complete as of Sunday versus 14% last week and a 38% five-year average.
Wheat: Futures ended lower but near midrange on Tuesday. December SRW fell 4 cents to $5.07 with December HRW falling 4 ½ cents to $4.21 ¼. December spring wheat fell 6 ½ cents to $5.45 ½. Futures were pressured by light selling after the recent rally increased farmer sales across the globe and export tenders were light this week. Spot basis bids for hard red winter wheat firmed for supplies destined to be exported, firming at an elevator in Galveston, Texas, as well as in the U.S. Gulf rail market. Bids were steady in Kansas and Oklahoma. Farmers sales increased Monday and that has satisfied immediate cash needs. USDA on Tuesday morning said weekly export inspections of wheat rose to 462,651 metric tons (MT), down from an upwardly revised 479,335 MT a week earlier and 467,791 MT a year earlier. Analysts' forecasts ranged from 300,000 MT to 600,000 MT. China was the biggest destination after Japan last week and Brazil was also noted taking U.S. wheat. Shipments since June 1 are 9.3% higher than the pace a year earlier. Mexico and the Philippines are the top destination for wheat shipments this season. Paris wheat futures fell on Tuesday, moving away from a 2-1/2 month high as French farmers took advantage of the recent rally to book some sales.
Cotton: December cotton futures closed up 131 points at 63.53 cents. Prices closed near the session high and got back more than half of Monday’s sharp losses, to keep alive a price uptrend on the daily bar chart. The cotton futures market was lifted today in part due to reports China has actually mentioned purchasing U.S. cotton as part of its big ag-purchase package agreed upon last week. Still, Bloomberg News today reported China wants real U.S. tariff cuts to enable them to secure $50 billion of US ag goods. China would only make that move if President Trump rolls back levies put in place since the trade war began, the report said. Beijing is suggesting it may need more time to negotiate an accord, even as the Trump administration suggests a deal could be signed with Chinese President Xi Jinping at APEC in November. Frosts and light freezes occurred as far south as West Texas over the weekend, which will cause some crop damage. But the frost/freeze event generally wasn’t as severe as far south as traders anticipated ahead of the weekend. Conditions are expected to be warmer and drier the next two weeks.
Hogs: Lean hog futures rallied today and settled on or near session highs with the front-month up the $3.00 limit and deferred contracts 55 cents to $1.90 higher. Limits will expand to $4.50 tomorrow. Buying ramped up in the lean hog market after China’s Foreign Ministry Spokesman Geng Shuang said that China has already purchased 700,000 MT of U.S. pork. That’s a bit of a head scratcher, as roughly half of that is on the books for 2019, with 2020 sales adding just a bit to the tally. Some categories of pork (like offal) do not show up in weekly updates, but that’s still too wide of a gap to be explained away by that. In any case, the comments add to the strong Chinese demand story in the wake of African swine fever; they are also another sign of much improved U.S./China relations. Chinese media reports that were initially quite cautious regarding their take on the Phase 1 trade deal between the two nations have now come around to confirming the U.S.’s account of the deal. While details still need to be hashed out, this is certainly a positive development.
Cattle: Cattle closed steady to slightly higher, rebounding from earlier losses. December cattle were unchanged at $113.45 and February cattle rose 27.5 cents to $119.55. November feeders were unchanged at $146.075. Quiet cash trading again today after prices rose $1 to $2 last week. Most still look for firmer bids again this week. Wholesale beef prices rose at midday on strong sales. Choice rose 52 cents and Select rose $1.14 Tuesday. The spread remains at more than $27 and that tells you how current marketings are at this moment and why packers may have to pay more for cattle this week to get supplies. The market continues to be supported by expectations for more Chinese buying of beef to supplement its depleted pork supply. China imported 1.1 million metric tons (MMT) of beef from all origins this year, up 53% from a year ago. That’s almost as much as the 1.3 MMT of pork they have imported in the first nine months of 2019.