After the Bell: Soybeans Drop

Posted on 09/05/2019 3:22 PM

Corn: December corn futures closed up 1/4 cent at $3.58 3/4 and near the session low in quiet trading today. Buying interest was limited today by some weather forecasters calling for warm weather across most of the U.S. from mid-month to late September, which the crop needs to reach maturity and maximize yield potential. Benign late-season weather has limited buying interest in the market to bouts of short-covering.

Soybeans: Soybean futures enjoyed gains overnight, but buying interest faded as the day session neared and the market extended losses through the day. Futures settled low-range and down 12 ½ to 14 cents. Soymeal ended roughly $3.00 to $4.00 lower and soyoil posted losses around 35 points. Forecasts for some welcome warm temperatures the latter half of the month weighed on the bean market today, as that’s just what the crop needs to finish. Frost remains out of the outlook, leaving traders to remove what weather premium remains factored into prices. Meanwhile, updated forecasts for Brazil’s 2019-20 crop that has yet to be planted continue to come in above year-ago levels based on a modest expansion in acreage.

Wheat: SRW wheat futures closed mostly around a nickel higher, HRW contracts posted gains of 5 to 9 cents and HRS contracts finished around 8 cents higher. Those were high-range closes in all three markets. The corrective buying that supported wheat futures Wednesday continued today, despite a lack of supportive news. The high-range closes set the market up for more corrective gains overnight. But some fresh supportive news likely needs to surface to maintain strength into the weekend.

Cotton: Cotton futures finished 39 points higher in the October contract, while the December through May contracts ended 91 to 99 points higher. A weaker dollar helped trigger corrective buying in the cotton market today. But the dollar remains strong overall and is unlikely to face extended pressure. In fact, some market-watchers expect the greenback to push above par (100.00) if global currencies continue to weaken. As a result, any support from the dollar appears short-lived.

Hogs: October lean hog futures settled 82 ½ cents lower, while the rest of the market posted gains of 25 cents to $1.10. Bull spreading and efforts to keep the front month in line with the cash hog index weighed on October lean hogs today, but the rest of the market enjoyed followthrough gains. Futures have worked higher off their late-August lows amid ideas the market may continue to perform contra-seasonally. While cash hog bids continue to soften, the pace of the decline has moderated.

Cattle: October live cattle futures fell $1.15 to $97.875 today and hit a contract low. The December contract also hit a new contract low and dropped $1.35 to $102.225. November feeder cattle futures closed down 50 cents at $131.575. Until the cash market signals a low is in place, buying in futures will remain limited. Some light cash cattle trade got underway at lower prices across the Midwest and Plains Wednesday, which put pressure on futures. Still, with the cash cattle market above October futures, the downside should be limited near-term though today’s downside breakout was technically damaging. 

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