Corn: December corn futures fell 3 1/4 cents to $5.37 1/2 a bushel, still up 2.8% since Sept. 1. Corn futures fell for a second straight day on pressure from the accelerating U.S. harvest and spillover from weakness in wheat futures. USDA yesterday reported the U.S. corn harvest at 29% complete as of Oct. 3, compared to 18% last week and above the five-year average of 22% at this time of year. Progress was in line with trade expectations. Speculation USDA may trim its yield estimate in its Oct. 12 Crop Production report may lend a modest upside bias to futures, though harvest pressure likely will limit any rallies. StoneX yesterday said it reduced its estimate for the U.S. average corn yield by 0.9 bu. per acre to 176.6 bu. per acre, while raising its production forecast by 0.2% to 15.022 billion bushels. Today, IHS Markit raised its U.S. corn crop estimate to 15.085 billion bu. on a higher average yield forecast of 176.8 bu. per acre. USDA currently projects an average U.S. yield of 176.3 bu. per acre and harvest of 14.996 billion bu.
Soybeans: November soybeans rose 14 3/4 cents to $12.50 1/2 a bushel, while December soyoil jumped 231 points to 61.14 cents per pound, the contract’s highest closing price since Aug. 25. December soymeal declined $2.40 to $321.20 per ton, the lowest closing price in almost a year. Soybean futures were supported by sharp gains in soyoil, which rallied after Malaysian palm oil futures soared to a record and Nymex crude oil futures neared a seven-year high. Also, Census Bureau data on U.S. exports carried some supportive numbers for the soy complex. U.S. August soybean exports fell almost 72.0% from the year-ago figure, but soymeal bulls may have been encouraged by the modest 14.0% year-over-year decline in August meal exports.
Wheat: December SRW futures fell 11 3/4 cents to $7.44 3/4 a bushel, while December HRW futures fell 13 1/4 cents to $7.41. December spring wheat fell 4 3/4 cents to $9.25 1/2. Wheat futures were caught in corrective trade that also included the European wheat market. Traders took profits out of recently added long positions, with funds noted sellers on the day. While outside markets should have been generally price-supportive for the wheat market, the U.S. dollar was firmer, which added to the pressure on wheat futures. Reports yesterday that Russia plans to introduce a wheat export quota from Feb. 15 forward stirred ideas that exporters will more aggressively sell Russian wheat into the market ahead of the quota, despite the current export tax. That could curb export demand for U.S. wheat over the next four-plus months. Additional pressure stemmed from forecasts calling for rains across U.S. winter wheat areas over the next week.
Cotton: December cotton rose the 400-point limit to settle at $1.0893 per pound, a 10-year high. ICE cotton futures’ daily trading limits expand to 500 points on Wednesday. Cotton extended the steep rally over the past week on bullish technicals, strength in U.S. stocks and spillover from rallying Nymex crude oil, which neared a seven-year high. Slight deterioration in weekly crop ratings also supported futures. USDA yesterday reported 62% of the U.S. cotton crop in “good” or “excellent” condition as of Oct. 3, down from 65% a week earlier. Heavy rain fell from the Florida Panhandle into parts of central and southern Alabama and central Georgia over the past day, potentially leading to a decline in crop quality through discoloration or stringing out of fibers from the boll.
Cattle: December live cattle fell 20 cents to $127.85 per hundredweight. November feeder cattle rose $1.85 to $156.875. Cattle futures ended mostly firmer in a modest corrective bounce from last week’s slump to five-month lows, though persistent weakness in the wholesale beef market continues to hang over the market. Feeder futures gained support from lower corn prices. Choice boxed beef fell $1.47 today to an average of $287.71, the lowest since $285.84 on Aug. 3. Movement totaled 171 loads. Beef prices have been in a nearly uninterrupted slide since late August and likely must stabilize before futures can generate any sustained buying. Cash cattle markets showed further erosion early this week, with live steers averaging a little more than $122 in some feedlot areas. Last week, steers in five top feedlot areas averaged $122.56, down $1.08 from the previous week and the fifth straight weekly decline.
Hogs: October lean hogs rose 17.5 cents to $90.975 per hundredweight, while December fell 55 cents to $82.55. Hog futures stabilized after yesterday’s sharp losses, though a drop in wholesale pork prices may pressure the market tomorrow. Pork carcass cutouts fell $4.27 today to an average of $108.13, the lowest in a week and led by a decline of nearly $15 in hams. Carcass base prices on national direct markets fell 75 cents to an average of $71.26. Hog futures have reduced the market’s discount to the CME lean hog index in recent weeks, but the industry seems to be anticipating sustained seasonal losses through fall and early winter. Despite the cash hog market’s history of rising moderately through the early part of this month, October futures’ close left it $2.81 below the preliminary CME Index ($94.11), with the contract’s Oct. 14 expiration looming. The December contract is trading at a much larger discount, reflecting expectations for higher hog slaughter in early-to-mid-December.