After the Bell: Rains Limiting Traders' Crop Concerns

Posted on 08/20/2019 2:44 PM

Corn: December corn futures prices lost 5 3/4 cents today, hit a three-month low and finished with a contract-low close. Rain makes grain. More fell in Iowa, North Dakota and southern Illinois today and that pairs with a lack of threatening temperatures in the Midwest to keep traders unconcerned about the crop and willing sellers of any strength in prices. On Day 1 of our annual Pro Farmer Midwest Crop Tour, samples generated an Ohio corn yield that was down 14.0% from year-ago and 3.4% from the three-year average. South Dakota’s yield was 13.4% under year-ago and 2.5% shy of the three-year average. USDA’s crop progress and condition update Monday afternoon showed a one-point decline in corn rated “good” to “excellent,” to 56%. It also reminded of slow development.

Soybeans: Soybean futures prices closed up 1 3/4 cents in the nearby contracts. Soybean meal gained just over $2.00 and bean oil lost 25 to 30 points. Losses in the corn and wheat markets limited buying interest in soybeans today, as did more beneficial rains for the Corn Belt the past 24 hours, and more in the forecast. Day 1 of our crop tour showed pod counts in a 3’x3’ square down sharply from year-ago and the three-year average for both Ohio and South Dakota. And a lot of those pods were flat. That kept selling in futures limited today. USDA Monday afternoon trimmed the amount of top-rated soybeans a percentage point to 53% and the crop remains well behind in development.

Wheat: Winter wheat prices closed down around 4 to 6 cents today. Spring wheat futures closed 1 to 1 ¾ cents lower. December SRW futures hit a three-month low. Corn’s reversal lower today after some early strength prompted selling pressure in wheat to resurface, too. Ample supplies of wheat at home and around the world have wheat remaining a followers’ role. The U.S. has been able to compete on the global marketplace, thanks to competitive prices. But even if USDA does have to raise its export projection, U.S. carryover is expected to be plentiful. Rains in North Dakota overnight could aid some later-planted crops. Spring wheat harvest is off to a slow start.

Cotton: December cotton futures prices fell 10 points to 59.14 cents today. A rebound in global stock markets the past few sessions has somewhat limited selling interest in cotton futures, on hopes for some increased worldwide demand. Still, gains in futures prices have been tepid at best amid the U.S./China trade war that is showing no significant signs of ending and which is partly to blame for slack U.S. cotton exports.

Cattle: October live cattle futures prices closed up $1.775 at $100.00. November feeder futures finished up 57 1/2 cents at $133.475. Short covering lifted cattle futures today. Traders are increasingly recognizing cattle futures overdid it on the downside recently, in reaction to a fire at a Tyson Foods meat plant in Kansas that processes around 5% of the nation’s cattle. Despite the disruption, last week’s cattle slaughter dipped just 1.2% lower versus year-ago. Other plants ramped up production to take advantage of strong packer margins. Boxed- beef values strengthened again today, extending the impressive product market rally. Choice grade was up a solid $3.50 and Select gained a more modest 45 cents. The spread between the two grades is $27.66.

Hogs: October lean hog futures prices closed up 95 cents at $64.975 and December futures gained $1.325 at $64.175. The futures market saw some short covering and spillover support from the firmer live cattle futures market. Reports Chinese hog prices are at record-high level also reminded trader the outbreak of African swine fever in Southeast Asia should present some export opportunities for the U.S. The strongest demand period for China begins next month. The market is also seeing support from ideas soaring beef prices could improve demand for pork. The pork cutout value dropped another 21 cents today, but movement picked up to 235.24 loads.

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