Closing Comments

Closing Comments

Corn traded in a 6 ½ cent range, on both sides of unchanged, before faltering at the finish, -4 (Dec). Futures found support in wheat today, as well as solid export numbers. The USDA weekly log pegged export sales at 1,114,900 MT, on the high end of the range of estimates of 750K-1.2 MMT. Japan led the list of buyers along with Asian and Latin customers. Managed funds reduced their large net long position this last week, and the Commitment of Traders Report tomorrow will reveal more details on their current position. The focus is on trade disputes and weather in the Northern Hemisphere. It is thought by many that corn should have room for another rally pre-pollination, as stocks are tightening and any perceived glitch that could impact yield will get a reaction.

Soybeans continued to inch lower, mostly on concerns over the lack of perceived progress between Chinese and U.S. trading negotiators, -4 ¾ (Nov). Bean weekly export sales were not great, as they were pegged at 506,600 MT vs estimates of 400K-950K MT. Last week’s sales were mostly to Europe and Mexico, and non to China. However, a bright spot included a daily sale to “unknown” destination for 132K MT. It is estimated that China has covered 100% of May-June soybean needs, 70% of July-August and 10% of September. Their April imports this year lagged April 2017 by 1.1 MMT at 6.92 MMT.

Wheat got a lift from growing concerns related to global dryness. Both Australia and Canada are being watched closely to see if parched conditions progress to drought. Weekly exports sales were less than impressive, coming in at 194,700 MT, on the low end of the range of estimates of 150K-500K MT. The market was bound to stabilize and bounce back at some point, as KC had dropped 65 cents and Chicago 50 cents on this last trip down. Chicago SRW +3 ¼, Kansas City HRW +5 (July) and Minneapolis HRS +3 (Sept).

Live Cattle found their footing after three days of steep losses, +1.225 (June). Since June futures are at a significant discount to the cash market, it would seem downside is limited. Packer margins are very high, which is also underpinning the market.

Hogs traded positive in June but negative in July and August, +.575 (June). The pork complex is under pressure from trade issues and hog weights trending too high. This coupled with futures still running at over an $11 premium to cash will be hard to overcome in the short-term.