After the Bell: Corn Unable to Hold on to Early Gains

Posted on 09/04/2019 3:02 PM

Corn: Corn futures enjoyed gains overnight, but buying petered out with the start of the day trading session and the market again dropped to new contract lows. Futures settled 1 ¾ to 3 ¾ cents lower for the day, with nearbys leading to the downside. Lagging demand remains an anchor on the corn market, as exports have disappointed and the ethanol sector continues to struggle, a point driven home by yesterday’s Grain Crushings Report. That has traders expecting higher ending stocks estimates from USDA next week. The greenback did retreat today, but the dollar’s dramatic rally remains in place, which doesn’t do exporters any favors.

Soybeans: Soybean futures finished in the upper end of today’s trading range with gains of 6 to 7 cents in most contracts. Meal futures ended $4-plus higher, while soyoil dropped 8 to 10 points. Soybean futures trade higher overnight, faded to a mixed tone at midmorning and then firmed late. That gives bulls the slight upper hand heading into overnight trade. But the upside remains limited to corrective buying unless funds decide to actively cover short positions. We don’t anticipate that happening anytime soon.

Wheat: December SRW futures closed up 7 1/4 cents at $4.60 3/4, while December HRW finished up 2 1/4 cents at $3.84 1/2. December HRS futures ended up 6 1/2 cents at $4.87. The wheat market saw some short-covering and a corrective bounce today after hitting multi-month or contract lows on Tuesday. Ideas the downside was overdone and sharp losses in the U.S. dollar index today kept the sellers at bay — for now.

Cotton: December cotton futures closed up 35 points at 58.21 cents today and nearer the session high. Short-covering was featured in cotton futures today. A rally in global stock markets and the U.S. dollar backing down worked in favor of cotton market bulls. Still, gains in the cotton market will likely remain tepid as the greenback is still very strong on the world foreign exchange market—making U.S. cotton more expensive to purchase in non-U.S. currency.

Hogs: October lean hog futures settled 60 cents higher at $67.125. The December through April contracts ended 5 to 60 cents lower. Hog futures started higher following Tuesday’s limit-up performance, but profit-taking quickly pulled futures lower. While the October contract was able to rebound from morning losses and finished high-range, deferred contracts only ended midrange. Today’s price action gives little direction heading into Thursday’s session.

Cattle: Live cattle futures saw mixed price action for much of the day and the market ended split, with October and December futures 25 cents and 75 cents lower, respectively, and deferred months 10 to 65 cents higher. Feeder cattle settled 95 cents to $1.40 higher. Live cattle futures remain rangebound, as the market is still awaiting word on when a major Tyson meatpacking plant will come back online. The surge in beef prices and sharp plunge in cash bids in response to the fire pushed packer profit margins sharply higher, and those near-record margins are helping to keep supplies from backing up. Bids have softened the past few weeks, but the declines have been far more tempered than many feared.

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