After the Bell: Cattle Futures Surge

Posted on 08/22/2019 4:29 PM

Corn: December corn closed up 3/4 cent at $3.71. Scouts on the Pro Farmer Midwest Crop Tour measured corn yield potential of 171.2 bu. per acre in Illinois--down 11.1% from year-ago and 9.4% from the three-year average. Yield potential in western Iowa was up from the three-year average in two of the three crop districts. We’ll release Tour results for Minnesota and all of Iowa tonight. The separate, Pro Farmer crop estimates will be released at 1:30 p.m. CT Friday. The National Weather Service is forecasting cool and wet conditions to close out August. Now, the corn crop needs sunshine and heat. USDA export sales for corn the week ending Aug. 15 were light but in line with expectations. Traders are optimistic something will be done regarding EPA’s use of small refinery waivers that have lowered ethanol blending obligations mandated under the Renewable Fuel Standard. President Trump was to meet with the heads of EPA and USDA today on the topic.

Soybeans: November soybeans closed down 4 1/4 cents at $8.68 3/4 today. Meal prices lost $1.00 in the nearbys, while September bean oil fell 20 points. Crop Tour pod counts in Illinois dropped 24.9% from year-ago levels to 997.7 pods in 3’x3’. That’s a 21.6% decline from the three-year average. In western Iowa, Crop Districts 1, 4 and 7 yielded pod counts a bit under the three-year average. The soybean crop needs sunlight, heat and time to finish. The NWS 6- to 10-day outlook is cool and wet. Weekly USDA soybean export sales of 25,900 MT for 2018-19 were in line with expectations, while sales of 792,600 MT in the new marketing year were stronger than anticipated, with “unknown,” Mexico and China topping the buyers’ list.

Wheat: December SRW futures gained 3 3/4 cents to $4.71 3/4 today, while December HRW prices were up 3 3/4 cents to $4.04 1/4. Stabilization in corn futures market prices had winter wheat futures in positive territory today. U.S. and Japanese officials were holding talks today in hopes of reaching an ag and autos trade deal by September. Spring wheat harvest is underway, keeping a damper on HRS wheat prices. USDA wheat export sales were solid the week ending Aug. 15, at 594,600 MT for 2019-20. Exports were also up 28% from the prior four-week average at 659,500 MT. U.S. wheat prices are competitive globally.

Cotton: December cotton futures fell 100 points to close at 58.94 cents today. Weekly USDA export sales data showed net sales in the 2019-20 marketing year of 164,000 running bales (RB). The 2020-21 marketing year saw U.S. sales of 500 RB. Exports of 344,000 RB were reported, including 31,300 RB to China. The U.S.-China trade war front is showing no signs of improvement. China’s renminbi hit an 11-year low Thursday. U.S. exporters are expected to feel the brunt as goods become more expensive to sell to China. Meanwhile, Beijing said it hopes the U.S. will change course on tariffs, the Commerce Ministry said today. China will have to retaliate if the U.S. persists in its current course, said Gao Feng, a ministry spokesman.

Cattle: August live cattle futures closed up $2.30 at $104.975 today, while the October contract gained 87 1/2 at $101.10. November feeder cattle futures rose 67 ½ cents to $135.075. More short covering in the futures markets was seen today, following the recent strong selling pressure. Weekly USDA beef export sales of 17,300 metric tons (MT) were up 17% from the prior four-week average, with Asian nations topping the list of buyers. USDA’s Cold Storage update today will provide another update on demand. Early cash market signals point to steady-to-higher trade this week. Today's midday beef report showed Choice grade down $2.39 but Select up $2.38, on light movement of 49 loads. The market is gearing up for USDA’s Cattle on Feed Report Friday. Cattle on feed are expected to climb 0.8% from year-ago, with placements up marginally and marketings 6.4% higher than year-ago.

Hogs: October lean hog futures lost $1.00 to $62.30 today, while December futures fell $1.125 to $61.55. USDA’s weekly export sales update showed pork sales of 18,500 MT for the week ending Aug. 15, which was up 16% from the previous four-week average. Traders were disappointed China was not listed as a major buyer. Cash hog bids dropped $1.41 on Wednesday. The noon pork report showed cutout value down another 24 cents after sharp losses Wednesday, led by losses in bellies.

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