Corn: Futures prices gapped higher on the daily charts and closed up 11 1/2 to 13 cents today, and near their daily highs. So far, it’s been a very impressive week for the corn market bulls. Heavy speculative "fund" short covering was featured in corn futures today. The funds were near a record net-short position as of last week’s CFTC report data. That suggest the funds may have some more liquidation to do this week. The corn market is now adding a weather premium to prices, which had been severely pressured by the China trade-talk breakdown the past three weeks. The central U.S. weather forecasts lack any sustained period of dryness for a wide-open window for corn planting for the next week.Corn planting on May 12 was 30% planted versus 66% on average the past five years and the slowest since 2013.
Soybeans: Soybean futures backed off session highs into the close but still finished mostly 26 to 29 cents higher. Soymeal futures posted gains of $10-plus, while soyoil ended 36-plus points higher. Funds actively covered some of their massive short position in the soybean market today, as the entire grain and soy complex rallied amid corrective buying. In fact, the strong price recovery also spread to other commodities and the stock market, a stark reversal from Monday’s broad-based selloff. With funds heavily short grain and soy futures, the corrective price rebound could be extended if they cover more positions. The fundamental catalyst for the move was confirmation of severe planting delays in Monday afternoon’s update from USDA.
Wheat: Wheat futures closed higher and near session highs. July SRW was up 11 ½ cents to $4.48 ½ and July HRW gained 11 ¾ to $4.08 ¾. September Spring wheat gained 5 cents to $5.31 ¾. USDA reported spring wheat planting jumped 23 points over the past week to 45% complete, which was 10 points more advanced than anticipated. But that’s still well behind the five-year average pace of 67% complete at this point in the season. The slow start has helped to put a bid back into the wheat market after a small improvement in demand for U.S. wheat from overseas buyers.Wheat disease risks are increasing with the return of soaking rains later this week. Concern over milling wheat supplies is rising and that will lead to more discounts for low quality wheat.
Cotton: Cotton closed higher and in the upper half of the daily range with July climbing 1.31 points to 66.76 cents and December up 59 points to 66.99. Cotton prices moved higher today, following the rebound in grains, stocks and market sentiment. Trade rhetoric was less harsh today with both China and the U.S. saying they are willing to meet again to reach a deal. Both sides would like to have a deal for Presidents Trump and Xi to sign at the late-June G20 meetings in Japan. Current prices, including tariffs, are cheaper than they were when China was buying cotton last fall.
Hogs : Lean hog futures settled 70 cents to $2.45 higher in the June through February contracts, with summer months leading gains. The May contract expired unchanged at $83.55 today. Lean hog futures erased yesterday’s losses as the trade rhetoric between the U.S. and China was a bit more positive today, with both sides signaling they are still hopeful a deal can be reached. June futures have posted a series of higher lows over the past week, which is an encouraging signal that a near-term seasonal low may be in the works. And retailers are often strong buyers of pork once they have Memorial Day beef features secured. That could bolster the product market near-term.
Cattle: June live cattle closed down 25 cents today after reaching a nine-month low. The August contract fell 20 cents and scored an 11-month low. Both contracts saw prices still end near their daily lows. Meantime, August feeder cattle futures dropped to a new contract low and closed down 60 cents. Expectations for lower cash cattle trade this week are keeping the futures traders’ buying interest tepid early this week. Packers paid $2 to $3 lower for cash cattle last week. However, producers now reckon the cash market has been beaten down too far the past month and are likely to hold out for better prices this week. Cattle bulls can argue futures prices are due for a seasonal low and the markets are severely oversold, on a near-term technical basis.