CORN

Corn futures were down 2 to 3 cents overnight while, despite selling 47 million bushels of corn to China over the past two days, having a hard time moving forward in the near-term.  Private analysts’ estimates have been coming in higher than anticipated, keeping the supply side heavy.  USDA will release the September monthly Crop report next Friday.  Prices are fighting strong resistance above the Dec contract at the $3.63 level, which could contain upside in the short-term.  There were no deliveries against the Sept corn contract last night.  Yesterday, USDA reported 424.4 mil bu of corn was used for fuel alcohol in July, down from 450.8 mil a year ago.  Weekly Ethanol Stats will be out today followed by Exports tomorrow.  Heading into today, Managed Money is net short an estimated 48,000 corn contracts.

SOYBEANS

Soybean futures were down 6 cents overnight after a dose of wet weather across Illinois was seen stabilizing the crop in the short-term.  Managed Money is net long an estimated 152,000 soybeans; net long 13,000 lots of soymeal, and; long 70,000 soyoil. Prices may turn choppy, looking for direction, and awaiting fresh news to move higher.  A new round of export demand would be helpful.  The USDA July soybean crush was pegged at 185 mil bu (estimate was 183 mil bu) versus 177 mil a month ago and 179 mil last year. Soyoil stocks were 2.124 bil lbs (estimate was 2.131 bil) versus 2.271 bil last month and 2.040 bil a year ago. Soymeal stocks were 412,000 tons versus 420,000 tons last month and 345,000 tons a year ago.  Weather-wise, last night’s GFS model run showed the surge of cool air being associated with an aggressive weather disturbance in the HRW wheat region and corn belt.  Significant rain was shown with the greatest amounts in MO, eastern KS, eastern OK, northwestern AR and IL.  Some rain will occur in IA; though, there is not enough expected to havea notable impact on soil moisture in the state’s driest areas.

WHEAT

Wheat futures retreated from multi-month highs overnight.  Dec Chicago wheat was down 6 cents to 5.58 after reaching the contract’s highest level since April 20 during Wednesday’s rally.  The dollar is correcting higher this morning following new lows for the move.  KC wheat is down 2 to 3 cents this morning, Mpls is up 2.  The weaker U.S. dollar and weather conditions effecting the planting of next year’s crop help wheat breakout to the upside, technically which may lead to more buying interest, particularly if row crops continue to strengthen.  In addition, traders see the price hike for Russian wheat as a reason to expect increased demand for U.S. supplies down the road.  Overnight, Japan bought 106,937 tons of U.S./Canadian/Australian wheat in a routine tender.

CATTLE

Live cattle futures are called steady to lower.  Charts are staying technically weaker as the October contract failed to push above the 50-day moving average, so far this week.  Cash trade is starting to develop this week at $104 in the south, down $1 from last week.   Retail values have been choppy this week, bringing some potential demand concerns going into the fall.  Look for more sideways price action mid-week.

HOGS

Lean hog futures are called mixed.  Prices are consolidating off of last weeks highs as the supply side of the hog market stays heavy, limiting rallies.  Momentum studies may be trending lower this week, but demand will be the key for price direction with the market holding support above the 10-day moving average amid a firmer biased trend formed over the past month.

Author

Matthew Strelow