Provided by Stewart-Peterson Inc.
CORN
Corn futures were firm overnight while continuing to recover from multi-month lows established earlier in the week. Strong gains in wheat is spilling over to help corn in the midst of new highs in the dollar. Sept corn rose to 6.20 on gains of 11 cents before easing to 6.13. December corn got to 6.07 and is up 5-3/4 cents to 6.02 this morning. For the week so far, corn is down 9-3/4; Year-To-Date nearby futures are up 27%. Trade estimates for this morning’s USDA Weekly Export Sales are 200,000 to 500,000 tons for old crop, zero to 300,000 tons for new crop. On Thursday, Managed funds were net buyers 9,000 corn and are net long an estimated 192,000 contracts. U.S. stocks and crude futures are mixed this morning. Gold, silver, copper, coffee, sugar, cocoa and cotton are lower. The U.S. Midwest and EU 2-week forecast is dry. In other news, the UK Prime Minister resigned this week and, more recently, the former Japan Prime Minister was assassinated.
SOYBEANS
Soybean futures were relatively calm overnight after a volatile week of action. August beans are down 4 cents this morning to 14.81-1/4, and Nov is unchanged at 13.65-1/2. August soymeal is down 2.0 to 421.50. August soy oil is up .36 to 61.98. For the week so far, soybeans are down 36; Soymeal down $0.01; Soy oil down 3.18. Year-To-Date nearby soybean futures are up 20%; soymeal up 15%; soy oil up 12%. On Thursday, Managed funds were net buyers of 15,000 soybeans, 5,000 soymeal and 9,000 soy oil. They are now estimated to be net long 112,000 soybeans, 65,000 soymeal and 19,000 soy oil, though some traders added to short soybean positions looking for Weekly Export Sales this morning. Trade estimates for this morning’s USDA Weekly Export Sales are (300,000) to 300,000 tons for old crop, 100,000 to 300,000 tons for new crop. Soymeal estimates are 100,000 to 250,000 tons for old crop, zero to 50,000 for new crop. Chinese soymeal and soybean import buying remains slow. Dalian soybean, soymeal, palm oil and soy oil were higher on profit taking after CBOT gains.
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WHEAT
Wheat futures posted strong gains overnight with Sept Chicago up 21-1/2 cents to 8.58, KC up 15-1/2 to 9,04-3/4 and MPLS up 30 to 9.64-1/2. Technical short-covering and dryness in the European Union is helping prices recover into the weekend. Talk of China buying U.S. white wheat also supportive. For the week so far, wheat prices are unchanged in SRW, down 17-3/4 in HRW, up 7-1/2 in HRS; Year-To-Date nearby futures are up 9% in SRW, up 11% in HRW, down 7% in HRS. On Thursday, Managed funds were net buyers of 12,000 Chicago wheat and are now estimated to be net short 23,000 contracts. Futures are down 5.7% from May, but up 48% from last year. Trade estimates for this morning’s USDA Weekly Export Sales are 250,000 to 600,000 tons.
CATTLE
Cattle futures are called mixed to lower as the market waits for verdict from the cash sector. That market was finally starting to see some interest after feedlots put up a good fight in deferring the week’s business in hopes of driving prices higher. The Southern Plains is seeing cattle sell for mostly $137, steady to $1.00 lower than last week, and Northern cattle are selling anywhere from $147 to $151, which is steady to $1.00 higher than last week. A recovery in grain markets pressured feeders on Thursday. Cattle markets are kept held in check technically by key moving averages running over-top current price levels. Either the 100-day or the 200-day moving averages are going to be a key swing point in the live and feeder cattle markets. Overall, the cattle market is continuing to consolidate, looking for a reason to move, but resistance overhead keeps prices in check. The economic concerns and demand concerns will be limiting, but the overall light production may keep the market supported.
HOGS
Hogs are called steady to higher supported by a strong overall cash market tone and the prospects of demand. However, resistance at the 100-day moving average limits upside potential. The front end of the market is optimistic for some demand boost as Germany has discovered African Swine Fever in parts of its hog production region. Chinese hog prices have firmed, adding buying support. Pork carcass values were firmer at midday Thursday, supporting the market. Carcasses closed .69 higher to 112.19 on a load count that was moderate at 286 loads. We view the market as being at a point to breakout higher or correct back to the bottom of the range. The trade will watch what may develop overseas and more potential U.S. demand. Some news there or continued strength in cash may be the key.
Author
Matt Strelow