What Will Finally Light Up the Grain Markets?

The USDA reported export flash sales this morning of 4.85 million bushels of soybeans to China, 4.4 mb of soybeans to unknown destinations and 11.3 mb of corn to Mexico.

• Weekly corn export sales of 45.6 million bushels were up 16% from the previous week but down 8% from the prior 4-week average.
• Soybean export sales of 15.6 million bushels were above all analyst pre-report estimates, and up 50% from the prior 4-week average.
• Wheat export sales of 14.7 million bushels were within expectations.

Grain and Oilseeds Wrap Up

Corn

The grain and oilseed markets flashed signs of excitement yesterday but dashed a lot of hopes today. Corn prices fell to losses of as much as 7 cents before coming off the lows ahead of the close. The December contract saw its 4-day win streak come to an end today as $4.50 has so far turned away fresh buying interest. Limited weather concerns, a stronger dollar index and managed money flipping to the short side combine to make rallying an uphill battle for now.

Soybeans

November soybeans saw losses of more than a dime at times today as recent strength is quickly cut into. This morning’s export flash sale announcement listed China as the buyer of U.S. soybeans and a lot more will be needed to keep a footing under the market if weather forecasts aren’t providing much risk. The soybean oil chart is slipping. Remember that bean oil strength was a key factor in the soybean market run over $12.00. Unless weather concerns arise or Chinese demand becomes more consistent, it appears rallies provide an opportunity to turn defensive.  

Wheat

The wheat markets were cutting into recent gains with losses of nearly a dime today. Wet conditions will hang around for another week and threaten crop quality but as we’ve seen before, weather related rallies don’t last long. December Kansas City wheat looks to be limited by strong resistance around $6.80. December Chicago wheat has room to run if the latest uptrend can be maintained, but weather concerns will have to stay in focus.

Cattle

August live cattle were trading with small losses in the morning hours before tipping over a little bit to hit losses over $2.00 around the noon hour. The August contract surged on Tuesday to make a return to the $250 area, but likely saw buying interest move to the sidelines ahead of the monthly Cattle on Feed Report. We haven’t been hearing any reports of higher cash market trade and that’s had us viewing another challenge of $250 as an opportunity for hedgers to get a floor under their production. 

August feeders traded on both sides of even before ending with losses of 50 cents to $1.00. There’s room to revisit highs set back in April and May within the $375 to $380 area as long as headlines don’t derail the latest uptrend.

Beef export sales of 10,400 metric tons were down 45% from the previous week and down 8% from the prior 4-week average.

Hogs

The hog market overcame dollar losses on the open to end in positive territory in front month contracts. August hogs traded a tight range this week between $95.00 and $97.00, with positive news still lacking to encourage Bulls to move off the sidelines. If prices continue to reject trade at $95.00 or lower, we like chances of an eventual recovery at least to the $102 area.

Pork export sales of 16,100 metric tons were a marketing year low, down 31% from a week ago and down 50% from the prior 4-week average.

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