CORN

Corn futures were up a penny overnight and are down 7 cents for the week following Thursday’s disappointing price action, failing to hold early session highs despite aggressive demand from China.  For the month corn is down roughly 22 cents.  New lows in the dollar overnight is newsworthy, but maybe not as big a story as China buying 1.937 million metric tons of U.S. corn for new crop delivery mid-week, the largest Chinese purchase on record.  In addition, 130,000 tons of U.S. corn was sold ton an unknown destination.  Weather is not overall concerning and the corn market is anticipating a large crop and an adjustment higher on the August 12 USDA report.  That report will not reflect actual field surveys, but rather farmer surveys.  The 6 to 10 day outlook for the Midwest has rains falling across the regions Friday of next and through the weekend; temps will be running below average over the next 10 days.  The 11 to 16 day forecast for the Midwest has the GFS model showing below average rainfall and below average temps; the European above average temps and limited rain.

SOYBEANS

The soybean complex was higher overnight following a bullish intra-day reversal in beans Thursday and a turn higher in soybean meal prices.  Nov beans were up a nickel to 8.93-1/4 nearly erasing all of this week’s price weakness.  The contract settled last at 8.94-3/4 last Friday.  For the month, soybeans up are up roughly 11 cents,  soymeal up $5.00, and; soyoil up 140 points.  Crushing margins are up 14 cents at 99.  Today is First-Notice-Day for Aug futures meaning delivery against long position-holders can begin.  Yesterday, new crop soybean weekly export sales were above 3.3 million metric tons, and above market expectations.  The current pace for new crop soybean sales is the strongest in years, supporting prices.  The potential larger supplies are a weighing factor against the strong demand tone and weather is favorable for reaching those yield forecasts.  The U.S. has the cheapest soybeans in the world amid a falling greenback and that should keep demand active for U.S. soybeans.

WHEAT

Winter wheat futures were up a nickel overnight amid another new round of lows in the dollar.  Demand will be the key going forward for U.S. wheat, and weekly export sales were just above the high end of expectations yesterday.  Globally, U.S. wheat is still at a premium to world prices, keeping the market sideways and consolidating near the top end of the ranges, at least in the Chicago contacts.  For now, there seems to be enough Black Sea region wheat to fill world demand.  Mpls wheat was up 2 cents overnight and is still mired in a down-trend.

CATTLE

Live cattle futures are called steady to higher.  Cattle futures saw additional buying strength on Thursday and finished near the top end of the trading range, challenging technical resistance.  Demand in feeder cattle markets due to lower grain costs help provide support.  The cash market is mostly developed this week near $97-$100 in isolated areas, and dressed trade at $160, higher than last week, maintaining a stronger week-over-week tone.  Weights are high and beef production looks to increase in the weeks ahead.  Weekly export sales for last week hit a marketing year higher at 29,500 MT, helping support prices.

HOGS

Lean hog futures are called mixed to lower.  Weekly export sales stay supportive for hog prices with export sales at 39,600 mt and shipments of 31,500 mt reported.  However, weaker midday retail values and cash market weakness put pressure on hog prices on Thursday, and the disappointing technical close opens the door for additional long liquidation or short selling this morning.  On top of that , the market looks vulnerable to pressure stemming from a continued big supply picture ahead.

Author

Matthew Strelow