CORN HIGHLIGHTS: Corn futures ended the day on a firm note gaining 1/2 to 1-3/4 cents as Mar led today’s gains closing at 3.81-1/2. Dec closed 1-1/2 higher at 3.68-3/4, gaining 13-1/4 cents for the week. This, despite a negatively slanted USDA report. Less than ideal weather conditions, a downturn in the dollar late in the week, strength in beans and wheat, along with ideas that farmers are not going to get in the field soon enough to meet near term demand all helped provide underlying support. The crop is behind schedule in early yield results that have been reported to us are at best mixed. This is compared to last year where early yield results are generally termed as better than expected over farmers who would use the terminology “pleasantly surprised”. The general optimism that there may be progress with China on the trade front, as well as Mexico buying corn this week, were all viewed as supportive factors.
SOYBEAN HIGHLIGHTS: Soybean futures finished firmer again today with small gains of 1-3/4 to 3-1/4 cents as Nov led today’s gains closing 8.90-3/4, its highest close since late July. This week’s trade activity looks very friendly on charts with prices pushing through critical moving averages and in an upward resistance channel line. For the week, Nov beans gained 41 cents with one of the more favorable weekly upturns in closes since late June. Good news on the trade front and China a buyer of beans this week, less than ideal weather conditions to help mature the crop, and technical strength all helped to propel prices higher. This may be one of the more critical weeks of the year as the market approaches mid-September it could’ve been very easy for prices to fall apart this week, especially if the USDA report had any negative undertone. Yet, from a longer term perspective, the upturn this week, along with a reduction of 2 mmt tons from expectations on projected world carryout, and ideas that the soybean yield at 47.9 bu an acre may be reduced on upcoming USDA reports all seem to have enough reason for traders to be more aggressive on the buy side.
SUMMARY: Farmers’ selling remains mostly light as uncertainty with yield a
WHEAT HIGHLIGHTS: Wheat futures finished mixed with most contracts in Chi either side of unchanged by 1/4 of a cent, KC 3-1/2 higher on Sep, but 3-3/4 lower in Dec, and Mpls closing the week down 1-3/4 on Dec. We were a bit surprised wheat didn’t hold gains from earlier in the session considering a less than favorable forecast and past week of heavy rains have kept spring wheat harvesters out of the field and may likely keep them from harvesting at all. Yet, world numbers on this week’s Supply and Demand report indicated ample inventory with no projected change of consequence. The general thought though is that world carryout might narrow down a few mmt. Dec Chi wheat ran into heavy resistance at the 50-day moving average as prices pushed into positive territory today reaching a high of 4.91, the 50-day moving average. Prices retreated and finished 1/4 of a cent lower. On the one hand, this isn’t overly concerning, yet a lack of follow through on today’s close after a very friendly looking reversal yesterday isn’t the best signal, especially considering the U.S. dollar reversed downward yesterday and saw follow through weakness today. Use rallies as opportunity the make catch up sales.
CATTLE HIGHLIGHTS: Cattle markets had a mixed day to end the week with Oct lives down 65 cents to 98.07, Dec lives were down 57 cents to 104.37, and Feb lives were down 10 cents to 111.10. Sep feeders were down 35 cents to 136.50 and Oct feeders were up 7 cents to 134.57. Choice beef values closed 8 cents higher yesterday afternoon to 219.97, and were up another 1.17 this morning to 221.14. Average dressed steer weights for the week ending August 31 were reported at 884 pounds, steady from the last week, but down .45% from last year, and sharply below the 5-year average of 891.4 pounds. This was able to quell fears that cattle are backing up in the country. Cash cattle have traded as high as 104.00 today, after trading at 97.00 on Monday. the best traded oct live contract was unable to hold yesterday’s close above the 200-day moving average level. Still, prices closed above the 10-day moving average level and Oct lives made a bullish hook reversal on the weekly charts. Oct feeders closed well off their highs today, but made a bullish key reversal on the weekly charts.
LEAN HOG HIGHLIGHTS: Hog markets closed sharply higher yet again with Oct up 3.30 to 66.47, Dec hogs are up 4.50 to 68.70, and Feb hogs were up 4.50 to 75.10. Hog markets were limit up yesterday on news that China was looking to buy U.S. pork products ahead of the next round of trade talks as a goodwill gesture. This morning, Chinese officials confirmed that China has dropped tariffs on U.S. pork, further indication that we may be drawing closer to a trade deal. Of course, without a 62% tariff on pork products, China could step in to replenish at least a portion of their pork supplies that have been lost due to ASF. Heavy average weights and a fast slaughter pace here in the U.S. have kept pork supplies heavy and carcass values low. Carcass cutouts were down 1.98 at yesterday’s close to 70.47 and were down another 2.09 this morning to 68.38. If pork exports pick up as expected, we should see pork values begin to reverse their recent trend. The best traded Oct contract made its highest close today since September 4 as momentum is still pointing higher. Dec and Feb both closed at their extended limit higher with both contracts making their highest close since July 31.