After the Bell: Wheat Leads Corn Higher, Soy Mixed, Shaking Off Early Price Weakness

Posted on Thu, 10/15/2020 - 15:25

Corn: Corn futures finished high-range with gains of 3 to 7 1/4 cents through the July contract, with the lead December contract pacing the move higher. The December 2021 contract firmed 1 cent.  Buyer interest built through the day in the corn market. Spillover support came from strong gains in the wheat market. Fundamental support came from surging corn prices in China, which spurred hopes of greater corn export demand. China has actively booked U.S. corn shipments, but based on rising domestic prices there, supplies are short and it will need to import even more corn. Funds were active buyers of corn today, adding to their net long position, which tallied 117,284 futures contracts as of Oct. 6.

Soybeans: Futures ended mixed with nearby contracts higher but deferreds were lower. November beans rose 5 ½ cents to $10.61 ¾ but May futures were down ¾ cent to $10.38 ¾. December meal surged $8.00 to $371.60. December soyoil was down 72 points to 33.16 cents. Soybeans battled with competing forces as export demand from China outweighed pressure from harvest selling by U.S. farmers, and heavier overnight rains in South America and more in the forecast next week. Beans started lower overnight on Covid-19 lockdowns in Europe and rising infections in the U.S. that triggered risk-off selling. Futures were also pressured by the rising U.S.-Chinese tensions. Prices then turned higher in the first hour of trading after USDA confirmed new sales to China. That was a signal to market bulls it is better to watch what China is doing and not pay attention to their rhetoric.

Wheat: December soft red winter wheat futures closed up 21 1/2 cents today at $6.18 1/4 and hit a two-year-high. December hard red winter wheat futures hit a 15-month high today and closed up 23 cents at $5.58. Solid gains in the corn futures market helped to support the strong rally in wheat futures today. Paris wheat futures rose to new highs Thursday as Algeria boosted its purchase to 600,000 MT from a 510,000 MT tender. Rising Russian prices have shifted demand to French, German and Baltic Sea supplies.  Strategie Grains increased its EU wheat export forecast by 2.1 MMT, to 25 MMT.  There is other business in play, as Jordan bought 60,000 MT, Ethiopia is tendering 400,000 MT, Pakistan is in for 300,000 MT and Turkey for 175,000 MT of milling wheat. There have been a lot of tenders through the week. This is keeping world export values firm. 

Cotton: Cotton futures saw two-sided trade today, but the market ultimately settled high-range with gains of 21 to 29 points. Cotton futures are consolidating just below Monday’s high the past few days as the market works to assess damage from Hurricane Delta. The timing of the hurricane means the crop likely sustained quality damage. The resulting price discounts could actually help attract price-conscious Asian buyers. That has put a floor of support under the market. But on the other hand, additional upside may be capped by abundant global supplies and another wave of Covid-19 infections around the world

Hogs : December lean hog futures closed up $1.45 at $69.875 today, near the new nine-month high today. The lean hog futures bulls are flexing their muscles late this week and looking for more on the upside in the near term. The CME lean hog index was up 3 cents today to $78.24 and that should keep a floor under futures prices, with December futures trading more than $9 under the index. Futures prices were also supported by a big jump in pork cutout value at midday Thursday—up a $6.07, to $101.32, led by gains in hams and bellies. Movement was 172.54 loads. Pork cutout values are up 33% since the end of August, reaching the highest since late May.

Cattle: December live cattle were down 67.5 cents to $109.60 and November feeders rose 7.5 cents to $136.40. As COVID infections increased from Europe to the U.S., anxiety in the cattle market did as well today. While packing plants have maintained strict social distancing, masks, face shields and health checks, longs fear a second wave of the pandemic. Economic data today also pointed to a weakening labor market and it appears it may be January before Congress passes a new stimulus package to aid the unemployed. Cash cattle prices have been a disappointment this week, trading about 50 cents to $1 cheaper on average than last week. As of yesterday, cash trading volume was estimated at 73,000 head after three weeks of active cash trading which suggest packers are moving the beef. Boxed beef was lower at midday on active sales of 112 loads.