Oliver Sloup, Co-Founder of Blue Line Futures shares his take on today’s price action in the outside markets and how that could spill into some setups in grain and livestock prices.
Grain Market Recap
It was a mixed day in the grain markets amidst the risk-off day in the outside markets. At the close new crop December corn futures were ¾ of a cent lower to settle at 418. New crop November beans settled 11 ½ cents lower to 1064 that was about 15 cents off the high of the session. On the wheat side, the most actively traded September Chicago contract settled 4 ¼ cents higher to 547.
Today’s updated 8-14 day outlook from the national weather service showed high chances for hotter than average temperatures for this time of year, not just for the grain belt but for nearly the entire country. On the precipitation side we see a divide right down the middle of Illinois. To the east, near normal precipitation is expected. West of that and below normal precipitation looks like a high probability.
We did see a flash sale in each of the last two days, today however there wasn’t much new to report on the export front. However tomorrow morning we will get the weekly export sales report, out at 7:30am CT. Expectations for old crop sales range from 200k-700k metric tons, expectations for new crop sales range from 100k-600k mt.
Livestock Market Recap
Cattle futures were mixed with live cattle squeaking out gains and feeders lower. Front month August futures tacked on 60 cents as futures and cash trade continue their attempt to converge with first notice day just about a week and a half away. October futures which is the most actively traded contract settled 15 cents higher to 186.27. On the feeder cattle side, August settled 1.62 lower to 257.12 with the next three contract months posting larger losses. Moving over to hogs, the most actively traded October contract settled 90 cents higher to 78.02, this marked the 9th higher close in the last 10 sessions.
This morning’s wholesale boxed beef report was softer with choice cuts 23 cents lower to 313.21 and select cuts down 1.67 to 296.66. Yesterday’s daily livestock summary showed daily slaughter at 123k head, putting the week to date total at 238k. Cash trade was relatively mute in yesterday’s trade.
Outside markets were under heavy pressure today with major indices trading as much as 2 & 3 percent lower. If weakness persists in those markets it may start to raise concerns over future consumer demand, especially heading into a time of year where demand starts to dwindle as grilling season cools off.
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