Corn: Steady to down 2 cents
Soybeans: Steady to down 2 cents
Wheat: Up 1 tp 5 cents
General Comment: Quiet overnight session with corn and soybeans slipping lower and wheat futures extending this week’s gains. The markets will get fresh inventory news on Monday when USDA releases its Sept. 1 Quarterly Stocks Report. Traders are looking for big stocks of all three commodities, but the surprise may be smaller inventories reflecting better demand and smaller 2018 corn and soybean production. USDA also issues its U.S. wheat production forecasts on Monday. Market bulls will need to see USDA trim its corn and soybean crop forecasts in the Oct. 11 update to sustain the recent rally. It may take until November to get a clear yield picture given the harvest delays.
Weather looks wet for the next two weeks across parts of the Midwest, but the models have reduced the risks for frost and freezes next week. The season’s first major winter storm will reach parts of the Northern Plains and Canadian Prairies this weekend and that remains a supportive feature to the spring wheat futures markets.
In South America, more rain and showers are forecast for parts of Southern Brazil, northeast Argentina and southern Paraguay, but dry pockets will remain. More rains will be needed by mid-October in central Brazil for timely planting and emergence of soybeans.
The U.S. House of Representatives is proceeding with work on a trade agreement with Mexico and Canada, U.S. House Speaker Nancy Pelosi said on Thursday, allaying worries an impeachment inquiry into President Donald Trump would delay approval of the deal. Pelosi, whose support is key to getting the United States-Mexico-Canada Agreement (USMCA) passed into law, said House Democrats had discussed the pact on Wednesday, a day after she announced the inquiry into Trump. Pelosi has not said when she thought a vote could be held for the deal, which must still be approved by U.S. and Canadian legislators.
Balancing worries over the ramifications of any possible impeachment of Trump was an apparent easing of trade tensions between Washington and Beijing this week. U.S./China trade talks can progress if both sides are proactive, Foreign Minister Wang Yi said. Wang told reporters on the sidelines of the United Nations General Assembly in New York, “Recently both sides have shown goodwill to each other, such as the U.S. granting a tariff exemption for hundreds of Chinese products and China being willing to buy more American products needed by Chinese market.” Those comments fueled the positive mood after Trump on Wednesday praised the Chinese purchases, saying a trade deal could come sooner than people thought. Trade talks between the United States and China are set to resume on Oct. 10 in Washington, CNBC reported on Thursday, citing three people close to the talks.
Last year, Southeast Asian farms offered a lifeline to U.S. grain exporters wounded in a bitter trade war with China. Now, African swine fever (ASF) is set to reduce demand for corn and soybean meal in the third largest region for animal feed. However, as ASF spread is slowing in China, farmers are raising fatter pigs to profit from soaring pork prices, boosting demand for key feed ingredient soymeal, and reducing some of the impact from a huge drop in the overall herd, according to estimates of Shanghai JC Intelligence. Many pigs are now slaughtered as much as 50% higher than normal, rising to 150 kilograms from 100 kilograms. The China agriculture ministry said on Wednesday it expected pig production capacity to hit bottom before the end of the year before stabilizing. C.P. Pokphand Co., one of China's top pig producers, will raise output from 4 million pigs to 6 million pigs by the end of 2021, its chief executive told Reuters last week. The firm is also restocking farms previously infected with African swine fever. Raising heavier hogs and more chicken and fish may help to improved corn and soybean demand into 2020.
Meanwhile, profits at China's industrial firms contracted in August, reversing the previous month's brief gain, as weak domestic demand and the trade war with the U.S. weighed on corporate balance sheets. Industrial profits fell 2% in August from a year earlier, data released by the National Bureau of Statistics (NBS) on Friday showed. That compared with a 2.6% gain in July. As a result, policymakers are widely expected to unveil more support measures to boost a slowing economy amid sluggish consumption, increasing pressure for finding a resolution of the U.S. trade war.
The world is bracing for a weekend of unrest with pro-democracy protests in Hong Kong likely to mount in the China-ruled territory ahead of the 70th anniversary of the founding of the People's Republic on Tuesday. But the biggest protests are likely to be on the Oct 1 National Day, with protesters saying they plan to use the holiday to propel calls for greater democracy in the former British colony and to embarrass political leaders in Beijing.
USDA is its daily export sales reporting services said private exporters sold126,000 metric tons (MT) of soybeans for delivery to China during the 2019-20 marketing year. That followed 581,000 MT announced sold to China on Wednesday and 257,000 MT announced sold to China yesterday.
Corn: Futures are in consolidation after reaching a five-week higher earlier this week, heading for a lower weekly close. With the quarter’s and month’s end and USDA inventory report set for Monday, there is little interest in taking on new positions today. Momentum turned down yesterday and the key will be holding above the 20-day moving average today.
Soybeans: November beans are paring this week’s gains tied to stepped up Chinese buying of U.S. soybeans ahead of talks next month. Malaysian palm oil futures fell nearly 1% on Friday, dragged down by weakness in related edible oils, capping their sharpest weekly drop in three months. It was down 3.3% for the week, keeping pressure on soybean oil futures Friday.
Wheat: European wheat futures are extending gains in Friday’s trading, reaching nearly a seven-week high on increased global tenders the past two weeks. The strength in foreign wheat prices is a bullish development for U.S. futures and adding to the bullish technical signal emerging across the world markets.
Cattle: Steady to mixed
Hogs: Steady to firm
Cattle: Cattle may need to pause today and wait for the cash market to develop a trend. Most were looking for firmer bids this week after active and higher cash markets last week. Some packers were bidding lower with few takers earlier this week. Wholesale beef prices continue their mixed trends with Choice sliding another $1.12 and Select gaining 56 cents on Thursday. Sales were moderately active. Slaughter is unchanged this week compared with a year ago but down 10,000 head from last year.
Hogs: Look for steady to firmer futures start after pausing yesterday after reaching resistance at the 100-day moving average on Wednesday. Cash hogs firmed another 80-plus cents on Thursday and wholesale pork cutout values jumped $1.60 on moderately active sales. Slaughter this week is down 3,000 head from a year ago and 66,000 below last week. It could be a slow session ahead of the USDA Quarterly Hogs and Pigs Report after the close. Market will continue to find underlying support from expectations for increased Chinese buying of U.S. pork. South Korea confirmed its ninth case of African swine fever in a town near its border with North Korea, its agriculture ministry said on Friday. South Korea has been on the highest alert in the wake of its first outbreak of the deadly hog disease on Sept. 17, ramping up disinfection measures, including a temporary nationwide ban on transport of hogs and related livestock. About 0.5% of the total national herd of 12.3 million pigs have already been culled or are expected to be slaughtered.