CORN

Corn futures traded two-sided overnight around upward trending 10-day moving averages.  Topping action is occurring after becoming technically overbought though as growers reward the recent rally with cash sales amid a favorable basis climate.  Weather looks conducive to harvest progress and we will watch for yield reports in the coming weeks.  For now, look for choppy price action with the bean complex, and possibly equities and currencies leading the way for corn.  The dollar made a strong move higher on Monday and is firm this morning.  The high of 3.79-1/4 from last Friday’s session stands as technical resistance for the Dec corn contract, which traded between 3.72-1/4 and 3.65-3/4 last night.

SOYBEANS

Soybean futures were up 3 to 5 cents overnight after losing 22 cents to begin the week led by long liquidation.  Managed Money is net long an estimated 225,000 soybean contracts; net long 61,000 lots of meal, and; long 95,000 soyoil.  Good soybean yields and weather is expected to put some headwinds into the market rally that has been driven by a steady dose of export business.  Soybean shipments for the first 17 days of the new marketing year exceeded the seasonal pace needed to hit the USDA’s target by 67 million bushels.  The 6 to 10 day forecast for the Midwest has another front to work through early next week bringing light to moderate rainfall.  Those rains look to fall mainly in the northeast sections of the Midwest.  Temperatures over the period look stay average.  Yesterday’s down day gave a bearish indicator with a crossover down that has changed the momentum heading into the last week of the month of September. 

WHEAT

Winter wheat futures were up a nickel overnight, taking cues from row crops and a pause in the dollar’s rebound overnight.  Futures look to trade an inside day today with yesterday’s volatile session creating wide 20+ cent trading ranges.  Prices are above their respective moving average support levels which should help keep the market anchored within the recent uptrend.  The steady price hike in Black Sea wheat is supportive, but may be priced into the recent up-move that has pushed U.S. supplies to a premium over Black Sea varieties.

CATTLE

Live cattle futures are called steady to firmer after grain markets put in a bearish outing to start the week. However, look for uncertainty to hang over the cattle complex as volatility in the equity markets turn off cattle traders and create an aura of risk-off mentality.  The current trend is choppy and beginning to feel sideways with Dec live cattle, at 106.70 and near the contract’s 50-day moving average is holding a premium to cash. The bulk of last week’s cash sales were from $103 to $104/cwt and we could see shortened showlists this week.  Boxed beef values have been firming.

HOGS

Lean hog futures are called steady to firmer.  Export sales at 50,000 metric tons last week, firm retail prices, particularly in ham and belly cuts offers support and the means for a technical bounce off of Monday’s lower closes.  The cash index was up 1.74 to 69.58 versus the October contract being at 65.60.  This should help underpin front months.  Elsewhere, Chinese domestic hog prices are rising as supplies tighten.  The bears will argue reason to go after technical gaps left on the daily charts several dollars lower.  For the actively traded December contract, that target begins about a dollar below yesterday’s settlement price of 61.55.

Author

Matthew Strelow