USDA Report Drops — No News Is Bad News for Corn at Fresh Lows

Grain and Oilseeds Wrap Up

Corn

As expected, the USDA did little to wake up bulls in the grain markets. The US corn supply/demand balance sheet saw little change while world corn carryout jumped nearly 4 million metric tons on higher South American production estimates. December corn futures threatened dime losses, slicing through the recent $4.41 low to reach a fresh contract low at $4.37 ½. There’s room to bounce but buyers lack a reason to come off the sidelines.

Soybeans

Limited adjustments to the soybean supply/demand balance sheet left little to be desired in the market today. Prices would fall to double-digit losses to reach a fresh low at $11.26 ½ in the November contract before limiting the damage right ahead of the closing bell. The path of least resistance remains to the downside while weather forecasts are nonthreatening and outside market news isn’t being looked at as a supportive factor anymore. We see better support arriving for November soybeans within the $10.90 to $11.00 zone.

Wheat

July Kansas City wheat reached double-digit gains for a third straight session and again couldn’t hang onto the strength. Prices initially reacted positively to the USDA’s 20 million bushel cut to US wheat carryout. The July KC wheat contract is trying to build a base of support near $6.20 with room to bounce up to $6.60 if gains ever stick around all day. The July Chicago contract is trying to bounce off $5.80, but resistance has been stiff so far around $6.00. Lower hard red wheat production limits the extent of downside risk while upcoming harvest pressure limits enthusiasm in the market.

Cattle

August live cattle bounced back from $1.00 losses a few times throughout the day to reach $1.00 to $2.00 gains. The August contract continues to bounce up against overhead resistance within the $242 to $243 zone, needing a breakout above there to push past the downtrend that has formed since highs were set in early May. August feeders slipped to $2.00 losses a few times in the morning before surging late to post a $5.00 gain. The market had recently struggled to push past $355 so today could be the start of a bigger upside move.

Hogs

August hogs traded a relatively tight range, mostly in positive territory, as prices extended their rebound off yesterday’s lows. Past rally efforts haven’t lasted for more than two to three days as bulls would like to see cutout values regain strength to justify jumping on the long side. The August hog contract would need to rally beyond $97 to $98 before the latest downtrend resistance line would be threatened.

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