CORN

Corn futures made new highs for the move last night as row crop prices see a boost ahead of the September USDA Supply/Demand report scheduled for release at 11 AM central.  Dec got to 3.68-1/2 on gains of 3-1/2 cents before easing.  The strong close on Thursday may be more of a product of money flow into the corn market as fund managers build a long position.  Prices settled above the 200-day moving average, and that is likely triggering additional buying.  However, the market is fundamentally buoyed by crop losses occurring in China that would translate to imports of U.S. corn; and, expectations are for the USDA to lower yield to 178.3 Bu/Acre and carryout to 300 mb to 2.450 billion bushels, due to hot, dry weather in August in today’s report.  We’ll get Weekly Export Sales this morning that are pushed back one day due to the holiday this past Monday.  Trade estimates range between 1.0 to 1.90 million tons.  FSA is also set to release acreage data.

SOYBEANS

Soybean futures made a new high for the year overnight on gains of 10 cents.  They ended a 12-day rally on Thursday, closing lower after the market more than 75 cents since August 24.  Today’s USDA WASDE report is expected to see the soybean yield shrink to 51.8 bu/acre and carryout to 465 mb, down 145 mb from last month due to hot, dry August weather.  Meanwhile, China remains an active buyer.  Trade estimates for this morning’s USDA Weekly Export bean sales are 1.10 to 1.90 million tons, meal sales near 225,000 to 500,000 tons; and, oil sales near zero to 30,000 tons.

WHEAT

Wheat futures are called mixed. Stronger global wheat prices and impacts of dry conditions on the southern Plain supported the wheat market. Technical buying also supported the market as prices held support at the 200-day moving average in the Dec contract.  The September USDA report will likely have little impact on the wheat market but may be influenced by the strength or weakness in other grains.  For Weekly Export Sales, traders see sales ranging between 250,000 to 600,000 tons.

CATTLE

Live cattle futures are called steady to lower depending on what happens in hogs this morning.  Strength in hog markets helped support cattle futures yesterday, but a weaker cash market limited gains in cattle with early results at $101 this week, $1-2/cwt under last week, and keeping the trend lower.  In addition, softening retail values highlight demand concerns into the cattle market.

HOGS

Lean hog futures are called steady to higher after a flurry of buying drove the market limit up yesterday. The discovery of African swine fever in wild hogs in Germany pushed hogs limit higher on Thursday. Talk of pork product export bans for German products would have to be filled by U.S. and Brazilian sources.  China has been responsible for 61% of the German export market this year. With Thursday’s strong move, the hog market is overbought and susceptible to possible selling pressure.

Author

Matthew Strelow