After the Bell: Soybeans Lead Corn Higher After USDA Crop Production Report

Posted on Fri, 09/11/2020 - 14:25

Corn: December corn futures prices rose 3 1/2 cents today to close at $3.68 1/2, hit a 5.5-month high and closed at a bullish weekly high close today. For the week, December corn gained 10 1/2 cents. Today’s strong close in corn futures suggests some follow-through technical and speculator buying interest is possible on Monday. USDA’s monthly supply and demand report today was not bearish as some had reckoned and showed a U.S. corn crop estimate that is down 378 million bu. from August and in line with the average pre-report trade estimate. USDA estimated the U.S. corn yield at 178.5 bu. per acre, down 3.3 bu. from last month. USDA increased old-crop corn carryover 25 million bu. from last month. New-crop corn carryover of 2.503 billion bu. is down 253 million bu. from USDA’s estimate last month but 52 million bu. above the average pre-report trade estimate.  Corn bulls are also being fed by speculation China will continue to buy U.S. corn after three recent typhoons damaged crops.  

Soybeans: November soybeans rose 18 1/2 cents today to close at $9.96 a bushel. Nearby soybean futures hit a more than two-year high today. For the week, November bean futures rose 28 cents. Solid export demand for U.S. soybeans continues to fuel the bull market run. Look for follow-through speculator and technical buying interest early next week in soybeans, although it can be argued the market is now short-term overbought and due for a normal and healthy corrective pullback next week. USDA’s monthly supply and demand report today showed the U.S. soybean crop estimate down 112 million bu. from last month but 18 million bu. higher than traders expected. New-crop bean carryover was estimated down 150 million bu. from last month and is just 5 million bu. below the average pre-report trade estimate. USDA put the national average on-farm cash bean price at $9.25 per bu., up 90 cents from last month.

Wheat: December soft red winter wheat futures on Friday fell 6 1/4 cents to close at $5.42 and for the week fell 8 1/4 cents. December HRW wheat futures dipped 2 3/4 cents to close at $4.71 1/4 today and for the week fell 1 1/4 cents. Winter wheat bulls have faded since posting multi-month highs on Sept. 1 and price uptrends on the daily charts are now in jeopardy. Bulls need to step up and show some strength early next week to keep the near-term price uptrends alive.Today’s monthly USDA supply and demand report saw the agency’s 2020-21 wheat carryover projection unchanged from last month and just 1 million bu. above the average pre-report trade estimate. Still, world inventories will remain at a record in the 2020-21 season.

Cotton: December cotton closed unchanged at 64.81 cents on Friday and down 13 points this week. USDA’s cotton crop estimate for 2020-21 is down 1.016 million bales from last month and 506,000 bales less than the average pre-report estimate. USDA lowered the estimated yield by 28 lbs. from last month to 910 lbs. per acre. USDA cut harvested cotton area by 242,000 acres to 9.005 million acres. USDA cut estimates yields in the top two production states. In Texas, the yield was cut 37 lbs. to 737 lbs. per acre. In Georgia, the yield was reduced 71 lbs. to 932 lbs. per acre. However, ending stocks were only cut 400,000 bales as USDA also cut expected domestic mill and exports by a combine 600,000 bales. World ending stocks were cut 1.1 million bales to 103.8 million from a month ago but that is still up 4.4 from this past year. Supplies are ample.

Hogs: December hogs rose $3.15 to close at $66.00 on Friday, capping a gain of $7.75 for the week. February hogs rebounded $6.45 this week to close at $69.475. Futures moved sharply higher to close the week after the east German state of Brandenburg confirmed case of African Swine Fever in a wild boar on Thursday, and South Korea immediately banned pork imports from Germany. Other nations including China and Japan are expected to follow. Hopes for strong U.S. exports to offset rising slaughter numbers boosted prices. Cash hogs were lower at midday with strong negotiated numbers.  Even on a slow week, processors have been able to keep the supply chain moving with another big Saturday kill planned. But pork values were moderately higher at midday as the cutout gained another 46 cents to $81.32. Sales were very active to close the holiday-shortened trading week suggesting a better start next week. The CME index gained $4.32 this week to $62.44. 

Cattle: December cattle rose 47.5 cents to close at $109.90 on Friday, capping a weekly gain of $1.425. November feeders rose 92.5 cents to $141.325 and gained $1.80 this week. Futures tested support and closed near weekly highs, suggesting further gains for next week with several live cattle contracts closing back above the 200-day moving average. Direct cash cattle trade has been slow, but some firmer trade developed from earlier this week. The stability in cash trade is positive but cash prices are still closing lower for a third consecutive week. Market bulls are calling this week a low for the cash markets for the remainder of 2020, but that will likely require a firmer trend in beef prices. Boxed beef was higher at midday on good demand.