Provided by Stewart-Peterson Inc.
CORN
Corn futures saw double digit declines overnight with Sept down 11 cents to 6.01-1/4 and Dec down 12-1/2 to 5.98-1/4. USDA said the corn crop is rated 64% good to excellent, unchanged from last weekend. The trade was looking for 63%. Corn silking is 37% vs the 5 year average of 48%. 6% of the corn crop is in ‘dough’ stage, up from 2% a week ago and compared to 7% last year and the 7% average. The position of a ridge in the 2-week forecast is yet to be determined, but rainfall looks less than normal. The EU is hot and dry though some showers are seen in the central region. Argentina is dry with some forecasting continued dryness through end of the year. Managed funds were net buyers of 6,000 corn yesterday, putting their long position at an estimated 164,000 count.
SOYBEANS
The soybean complex traded lower overnight. Aug beans fell 13 cents to 14.84-1/4. Nov lost 15 to 113.65-1/4. August meal shed 2.00 to 432.50; and soy oil was down .91 to 62.29. The U.S. soybean crop is rated as 61% good to excellent, down one point from last week, but about average (60%). The trade was looking for 62%. 48% of the crop is blooming vs 32% last week, 61% a year ago and the 55% average. 14% are setting pods versus 6% a week ago, 21% a year ago, 19% average. Managed funds were net buyers 17,000 soybeans, 1,000 soymeal and,8,000 soy oil on Monday. They’re net long position(s) were estimated at 109,000 soybeans, 71,000 soymeal and 25,000 soy oil. China was estimated to buy 50 mmt of U.S. soybeans for Aug through Jan. So far, this is not happening. Recently, China was rumored to buy 6-8 Brazilian bean cargoes for Feb-Mar. There is new concern about 250 million Chinese who are in lockdown or 17% of their economy. China real estate is in financial trouble, some Banks are blocking withdraws and record% of youth are unemployed.
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WHEAT
Wheat futures traded two-sided overnight and are weaker this morning. Sept Chicago wheat is down 4-1/2 cents to 8.08-1/4. The KC contract is down 5-1/2 to 8.68-1/2. Sept MPLS Spring wheat is down 4 to 9.35. Winter wheat is 70% harvested. The trade was looking for 75%. Spring wheat is rated as 71% good to excellent. The trade was looking for 70%. Last week was 70%. The wheat market was unable to find new buying last night after Monday’s gains. Managed money bought 12,000 SRW contracts yesterday, shrinking their net short position to 2,000 contracts. Egypt’s GASC is tendering for wheat with buyers limited to US, Canada, Australia, Argentina and Brazil. Australia and Argentina may be out of consideration. U.S. SRW is cheapest, but lacks capacity. EU’s wheat harvest is 50% complete versus 3% last year.
CATTLE
Cattle calls are mixed as prices consolidate around the 200-day moving average. October live cattle closed at 140.60 on Monday while forming a large pennant on the chart. July has become a hot month that is contributing to production problems for many cattle operations. Stressful conditions include parched pastures, feeding and shipping livestock, as well as marketing livestock. The illiquid feeder contract stays prone to volatile moves — up and down. Food inflation is pegged at 12.2% compared to prior year. Consumers are moving to cheaper meat products. Among the meats, beef posted the smallest gains with only a 4.1% increase compared to pork at 9% and chicken at 18%. Ground beef was up 9.7% while steaks were down .3%.
HOGS
Hogs are called steady to higher as prices test building resistance on the charts. October hogs settled at 94.37 yesterday and look to the respect 100-day moving average. Nearby August, at 112.125, rose to the contract’s highest level since April 29 after gapping higher on the opening bell. Technically, futures are considered ‘overbought’ which could provide an added barrier to bullish enthusiasm. The next area of resistance for August futures is 112.825.
Author
Matt Strelow