After the Bell: Non-Threatening Forecast Weighs on Soybean Futures

Posted on 08/03/2017 2:59 PM

Corn: Corn futures faced pressure for much of the day and the market settled midrange and around a penny lower. Corn futures were unable to shake spillover pressure from the soybean market today. Adding to negative attitudes, weekly corn export sales were disappointing, with old-crop sales hitting a marketing-year low. And traders view the cool, wet forecast as non-threatening. Plus rains moved through some dry areas of Iowa today.

Soybeans: Soybean futures were pressured throughout the day and ended off session lows, but still low-range for the day with losses of 14 1/4 to 16 3/4 cents. Pressure on soybeans came from rains moving across Iowa and Minnesota today, along with cooler temps. Additionally, the near-term weather outlook calls for below-normal temps to linger well into next week along with periodic rounds of showers. Adding to pressure were news reports that China may target soybeans if the U.S. announces trade sanctions.

Wheat: SRW wheat ended the day 2 1/2 to 3 cents lower, with HRW down around 4 cents. Spring wheat futures closed 5 to 9 cents lower. Wheat saw spillover from losses in the corn and soybean market, as well as rains moving across the Southern Plains and ongoing harvest progress in the Northern Plains, despite reports of low yields. Additionally, this morning's weekly export sales data was disappointing, as sales of 145,500 MT for 2017-18 were a marketing year low and well below expectations.

Cotton: Cotton futures saw two-sided trade today and the market ended split, with October and December futures down 20 and 18 points, respectively, and deferreds 9 to 19 points higher. Futures saw a mix of followthrough buying and profit-taking after yesterday's surge to the upside. Export data today also garnered a mixed response. USDA reported a net cotton sales reduction of 55,700 running bales for 2016-17 and sales of 126,500 RB for 2017-18 the week ending July 27. With July 31 marking the end of the marketing year, big cancellations have not materialized, adding to ideas USDA is too low on its export forecast.

Cattle: Live cattle futures were choppy today but market bulls had the advantage at the close. August live cattle ended 70 cents higher, while deferred months finished 2 1/2 to 45 cents higher. Yesterday's high-range close and nearby contracts' discount to higher-than-expected cash cattle trade Wednesday helped the cattle market to post gains for the day. So far, cash trade has largely occurred between $116 and $117, steady to down $1 from the week prior and a bit higher than where nearby contracts ended today's session.

Hogs: Lean hog futures ended the day mixed, with the front-month contract up 2 1/4 cents, October through February down 10 to 72 1/2 cents and far-deferred futures firmer. August hog futures were supported by the discount the contract holds to the cash index, but the prospect of building supplies weighed on the fall- and winter-month contracts even though they hold an even stiffer discount to the index. A softer tone in the cash hog market added to price weakness. Week-to-date slaughter is running 15,000 head above week-ago and 109,000 head above year-ago levels.

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