CORN

Corn futures traded flat/weaker overnight, losing 2 to 3 cents to 3.76-1/4 (Dec) after finishing higher for the third consecutive day on Friday and six of the last seven sessions.  Short term support is seen at 3.74-1/4, with 3.84-1/4 as next resistance.  The technical picture remains strong, but overbought to begin the week with prices hovering near the top of their trading ranges, setting up the potential for follow through buying this week if beans can again lead the way.   A new sale of 8.3 mil bu of corn to unknown destinations late last week keeps the demand tone supportive.  That makes three out of the last four days with a reported corn export sale.  Weekly Export Inspections will be posted mid-morning followed by the one of the last Weekly Crop Conditions updates for the year after the close today.

SOYBEANS

Soybean futures eased from their fresh contract highs overnight.  Nov beans were down 6 to 7 cents to 10.37 and look to respect Friday’s higher trading range between 10.46-3/4 and 10.27-1/4 until we see if the strong demand pace keeps buyers active.  USDA reported a soybean sale to China for the past eleven days.  That pattern continued with an two new sales on Friday morning.  Despite the rally, U.S. soybeans are still a value, and the demand pace should stay supportive.  This market is very strong, but getting extremely over bought, which, along with the beginning of U.S. harvest getting under way this week, may be reason to expect some retreat in prices.

WHEAT

Wheat futures were lower overnight, taking cues from row crops and a surge in the dollar overnight.  CBOT wheat was down 5 to 6 cents, KC down 3 to 4 and, MPLS off 1 to 2 cents.  Thursday’s breakout rally vastly improved the technical condition of the complex, with Chicago future posting strong bullish reversals on the weekly charts, opening the door for additional short covering and speculative buying.  Dryness concerns in the Ukraine and Argentina, along with talk of tighter supplies from key exporters bodes well for the prospect of more upside potential.

CATTLE

Live cattle futures are called mixed as the market searches for this week’s price direction.  The technical picture is improved with higher weekly closes etched for the second consecutive week and we’ll need to see Oct cattle, currently at 107.35, stay ahead of its 50-day moving average seen at 106.65.  Weekly cash trade continues to develop at $103-105/cwt in the south, mostly higher than the previous week.  Retail values are soft, keeping demand concerns in front of the market.  Recent strength in the grain markets will keep pressure on Feeder cattle prices.

HOGS

Lean hog futures are called steady to higher.  Cash strength and a surge in the lean hog index supports the nearby October contract.  Weekly export sales added 50,700 mt of new sales last week, as demand stays supportive for the market. Hog prices consolidated last week off the strong gains posted, and will now look for direction based on fundamental news.  Technical gaps left on the daily charts several dollars lower are bearish targets should bullish traders opt to step aside and allow prices to drift lower.

Author

Matthew Strelow