Feeder Cattle get Slaughtered, Grains Left Searching for Good News

Grain Markets chopped around searching for an identity and news independent of oil, while livestock markets continued to come under pressure.  Senior Market Strategist Jason Gehler breaks down today's news and moves in Ags

Daily Afternoon Market Recap 

• Weekly corn export sales of 83.7 million bushels were well above pre-report estimates that ranged from 31.5 to 63 mb and up 71% from the prior four-week average.

• Soybean export sales of 13 million bushels were within estimates and up 62% from the prior four-week average.

• Wheat export sales of 6 million bushels were within estimates and up 28% from the prior four-week average.

• Beef export sales of 8,100 metric tons were up 7% from the previous week but down 31% from the prior four-week average.

• Pork exports of 34,600 metric tons were up 65% from the previous week and up 21% from the prior four-week average.

Grain and Oilseeds Wrap Up

Corn prices were taking on nickel losses in the early morning hours before Crude oil jumped and took some other markets along for the ride. Corn prices reached gains of 3 to 4 cents in the morning but would trickle lower from there in the afternoon. July corn is quickly approaching key support within the $4.50 to $4.60 zone, once again relying on positive outside market moves or a flash news story to prompt strength again.

Soybean prices also benefited from the early morning jump in Crude Oil and spent some time in positive territory before falling back to 6 to 7 cent losses at the close. The July contract will need to hold short-term support around its 50-day moving average at $11.90, or risk falling to longer-term support at $11.70.

The wheat markets took on double-digit losses as it appears weather and production uncertainty clearly aren’t the focus this week. July Chicago wheat is approaching short-term support at its 20-day moving average near $6.43. Failure to find support there leaves the next downside target about 20 to 25 cents lower near $6.20. It doesn’t feel like production uncertainty has totally been factored in, but wheat has relied on strength in Crude Oil to push to higher ground.

Cattle

Feeder cattle were rocked with limit-down losses of $9.25 while live cattle followed behind with losses of a little over $5.00. Feeders started the day $3.00 to $5.00 lower and the downside move accelerated to limit down around midday after Trump was again sparking negativity across the cattle complex, making an announcement that beef prices will decrease. August feeders haven’t done any technical damage yet, but another close near $356 will have to find buying interest in a hurry.

June live cattle are maintaining an uptrend but are back to a challenge of that uptrend support that has moved to the $249 area. We haven’t liked the fact that live cattle haven’t been able to move to new highs while cash market strength is still in place. If market moves like today are keeping you up at night, remember that prices are still at historic levels. Tight supplies won’t be fixed anytime soon, but sometimes, people trading these markets don’t care about the fundamental situation.

Hogs

July hogs fell to losses of $1.50 to $2.00, setting new lows for the current downtrend below $100. Pork export sales were strong but that’s been about the only positive news out for hogs in a while. Long liquidation is clearly continuing in the hog market, but we’re watching closely for for the momentum to shift as seasonal strength typically shows up soon.

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