After the Bell: Corn, Beans Little Changed Watching Weather, China Purchasing

Posted on Mon, 07/27/2020 - 14:21

Corn: Futures slipped lower for a second session on favorable U.S. weather. December corn dropped 1/2 cent to $3.34 1/2. Prices tried to move higher overnight after the Chinese Dalian corn futures surged to new contract highs, with the September futures rising to the highest for the contract since January 2007. Prices remain well below the record hit in 2013. Talk continues to circulate that production will be down from flooding in the South and dry in the north and China may need to be a more aggressive buyer for new-crop delivery. Prices failed to hold the gains on favorable forecasts with rains falling from Kansas to Illinois this morning and moving east. Weekend Midwest weather was largely as forecast, with heat countered by good precip in the upper Corn Belt, Central Plains, Delta and Southeast. The dry areas of western Iowa missed rain again and remain a focal point.      

Soybeans: Soybean futures finished steady to 2 1/4 cents higher through the May 2021 contract, which near midrange. Soymeal futures posted gains of $1.70 to $2.90. Soyoil futures finished 20 to 23 points lower. Soybean futures were supported by daily export sales again today. USDA reported soybean sales to China and Mexico – the 10th straight day with daily soybean sales announcements. That countered pressure from generally favorable weather for soybean crop development. The 10-day forecast calls for no extensive heat and multiple rain chances across the Corn Belt the next 10 days. With the calendar flipping to August on Saturday, focus on weather will be heightened in the weeks ahead as plants set pods and fill them. Weekly soybean export inspections at 17.4 million bu. were up slightly from the previous week but well below last year’s 39.2 million bu. for this week.  

Wheat: Wheat futures softened as the day progressed, with futures settling near session lows. SRW wheat futures closed 6 to 11 ¾ cents lower, with the front month leading the decline. HRW wheat posted losses of 9 to 10 cents. And HRS wheat futures finished around a nickel lower. Winter wheat futures retraced Friday’s gains to start the week amid some improving yield reports out of Europe and the Black Sea region as harvest advances. Most recently, IKAR raised its forecast for Russia’s wheat crop from 76.5 MMT to 78 MMT and Kazakhstan’s ag ministry raised its grain crop projection from a range of 18.0 MMT to 18.6 MMT to 20.5 MMT. Rains are also expected to benefit spring crops in the Black Sea region near-term.  While weekly wheat export inspections were up from last week at 472,680 MT, the tally was not impressive and the Black Sea region remains a dominant force in the export market.  

Cotton: December cotton futures closed up 106 points at 61.16 cents today and near mid-range. Some short covering and perceived bargain hunting were featured today after prices last Friday fell to a three-week low. Today’s gains were supported by a slumping U.S. dollar index that today hit a two-year low—making U.S. cotton more price-competitive on the global market. However, India is looking at a good crop and may cut into some potential sales into Asia. The Texas hurricane saw little rain produced in the main southern cotton regions of the state. Some rains forecast for the southern U.S. this week could help out the drier cotton areas of the South.

Hogs: August lean hog futures closed up $0.55 at $54.55 and October futures gained $0.60 at $50.75. Deferred futures closed slightly lower. Some modest short covering and bargain hunting were featured in futures today. However, gains were limited by the still-large premium the futures market trades to cash hogs. The hog futures market is being constrained by increased U.S.-China tensions. Until more is known about Chinese buying intentions via the Phase 1 trade deal, the hog market may remain defensive. The abundance of U.S. pork has been met with strong demand, both from U.S. consumers eating more meals at home and from overseas buyers. That has helped cash hog bids and pork prices to stabilize. The average national hog markets rose $2.88 on Friday. Monday’s noon pork report showed cutout value up $6.00, led by a gain of $37.51 in bellies as BLT season is in full swing.   

Cattle: August cattle fell 85 cents to $100.425 and October live cattle fell $1.275 to $103.825. September feeders fell $3.125 to $139.625. Friday’s USDA inventory reports did not produce any bearish surprises, producing a strong opening. However, prices failed to hold the gains and closed making new session lows. Midday beef prices were slightly higher with Choice up 43 cents and Select gaining 29 cents. But sales were light and raised trader concerns about weekend beef clearance at supermarkets. The monthly Cattle-on-Feed data pegged the July 1 on-feed count at 99.6% of a year ago, June placements 102.1%, and June marketings 101.3%, all perhaps slightly bullish compared to pre-report estimates. Meanwhile, USDA’s semi-annual Cattle inventory report had the June 1 beef cow inventory at 99.2%, beef replacement heifers at 100.0%, and the 2020 calf crop estimated at 99.3%, suggesting not as much contraction in the herd as some were betting on earlier this month.