The CME and Total Farm Marketing offices will be closed Monday, September 7, 2020, in observance of Labor Day

CORN

Corn futures were up overnight and are about unchanged for the week.  Dec advanced 5-1/2 cents to 3.59-1/4 and is in the upper half of this week’s 14-1/4 cent trading range between 3.64-14 and 3.51. Cooler weather forecast for the three-day holiday weekend and into next week is helping prices trade north of the 10-day moving average that is trending sharply higher on the corn charts.  In addition, the latest drought map shows the western half of Iowa intensifying.  Other that that, corn traders don’t seem to have the fundamental gas to push futures through nearby resistance.  Stochastics made a bearish crossover sell signal yesterday but we expect the current range to hold until we start to hear reports of early harvest.  Heading into last night’s trade, Manage Money’s net short position had grown to an estimated 63,000 contracts after a slew of selling (16,000 contracts) on Thursday.

SOYBEANS

Soybean futures were up 2 to 3 cents overnight and have added more than 15 cents per bushel this week.  Nov beans made a new high for the move, getting to 9.69-1/2 in a bid to reach a new high for 2020.  That high was put in on Jan 2 at 9.82-3/4.  Traders may be looking to bag some profits ahead of the long weekend following big gains in the market since mid-August.  However, there is still real concern about US production potential and the spectacular demand from China.  Technicals are overbought but there isn’t much appetite at this time to establish short positions.  Managed Money is net long an estimated 163,000 soybeans; 15,000 lots of soymeal, and; 72,000 soyoil.

WHEAT

Wheat futures were mostly flat overnight as the dollar looks to end the week on a higher note after correcting off of Tuesday’s new low. The greenback could not break through nearby resistance yesterday afternoon, so we may see a bit of correction lower.  Most of the recent wheat rally has been fueled traders covering short positions, and new buyers have been harder to come by since the position squaring slowed down on Wednesday.  Managed Money is net long an estimated 20,000 SRW wheat contracts.  Black Sea wheat is still the cheapest in the world and is winning most of the tender business.  Overnight tenders show Ethiopia seeking 80,000 tons of optional-origin wheat; Egypt bought 55,000 tons of Russian wheat; Philippines bought 110,000 tons of optional-origin feed wheat.

CATTLE

Cattle futures are called sideways to lower today.  Cash fundamentals including a slowed export pace look soft and the technical momentum is still pointing lower.  However, despite the lower momentum, futures prices were able to form some consolidation action yesterday.  This may be an indication of an oversold market that would tend to support reversal action if selling interest dries up.

HOGS

Hog futures are called steady to higher on follow through from Thursday’s rally to the highest level since May 5.  Pork prices made a huge jump yesterday and were able to retain the vast majority of the strength by the close. Technicals are overbought, but the trend is higher and the export pace has been a major source of support.  China and Mexico were active buyers in Thursday’s weekly export data.  The drop in average weights means producers are likely current with marketings which would further underpin prices should exports stay strong.

Author

Matthew Strelow