Ag markets were mostly lower on Thursday, except corn.
Why is Corn Holding Up So Well?
Corn was steady on the December and slightly higher in other contracts but Mike Minor with Professional Ag Marketing says he’s been impressed with how well the corn market has digested Tuesday’s bearish yield and production news.
Corn has been up two of the last three days post WASDE and by all accounts should be seeing more pressure with a record 16.7 billion bushel crop and 188.8 bushel yield.
He thinks the market was so bearish heading into the report some of the negativity was dialed in but he thinks it will also be difficult for the market to build on it and he’s not ready to call a low either.
“From a seasonal perspective the last five to ten years it’s been very normal for us to put a low in at the end of August. You go further back than that. Typically a big crop would get bigger and you’d put a low in in September or October back in the good old days. So last year it was August 26th around that three mid -380s level on December corn futures, we’ve tested around that area. Some people have been calling that the low is probably in. I would argue that it’s going to be difficult for the USDA to get a bigger yield going forward. So from that perspective, I think the balance sheet could potentially improve from here. So fundamentally, sure we could probably put our low in here somewhat soon on this corn market,” he explains.
Did Pro Ag Find a 188.8 Corn Yield on Their Tour?
Minor wrapped up the annual crop tour for Professional Ag Marketing this week covering several Corn Belt states.
He says the corn crop looked exceptional in the Western Corn Belt but he did find some far from perfect fields in the East.
In fact, with the pollination and disease issues in Illinois and other states he thinks getting to a 188.8 yield will be difficult.
“Illinois, Indiana, and Ohio out there in the Eastern Corn Belt. I think my samples came in, 80 % of the samples came in lower than last year on that crop tour from the same and the areas and farmers. So in my perspective, going out and pulling the samples in the Eastern Corn Belt, I was disappointed to try to get them up to something like, you know, a 220 -plus type yield out of Illinois. I was at more of a 207. So I think that the Eastern Corn Belt, those three states, you pair those back a little bit, you can easily pull that yield back to a 186 -185.” he describes.
Soybeans Fall on Profit Taking
Soybeans have been up the last three days with the push from the lower ending stocks in the WASDE and on hopes of China business.
However, Minor says the market ran into some major resistance on the November contract and it will need additional news to push past that level.
“So this rally we had here up to $10.49 today had a very key downward channel resistance from all the way back to like 2023,” he says.
He thinks the market was also disappointed in the 90-day extension of the tariff truce with China because it was hoping for some type of a deal before harvest starts.
What Kind of Soybean Crop Did Pro Ag Find On Their Tour?
While USDA put out a record 53.6 bushel per acre soybean yield on Tuesday in the WASDE, there are also questions about whether that is too lofty for a national average.
Minor says they saw a consistent crop throughout their tour which could result in a massive soybean yield.
“At this point it’s consistent. Are we gonna have that full big you know robust finish and really fill at the end? That’s probably up in the air yet. There’s some white mold and there’s some other sudden death issues out there that we’re seeing but not a whole lot else other than that,. So I still think soybeans have okay potential but the August weather maybe could have been just a tad better,” he says.
Cattle Look Tired
Cattle futures ended lower after a failed effort on Wednesday to make new contract highs.
He thinks the market is looking tired and the increased volatility is an indication the futures are searching for a top.
But the key is packers are losing money and there may be a few more numbers ramping up in the North which may weigh on the cash market moving forward.
Cash news has been light this week with some Northern trade on Wednesday at $385 dressed, up $4 and $245 live. Just a few head were reported in Kansas at $237.
Another round of light trade was reported in the North Thursday with a range of $376 to $386, mostly $384 to $386, $3 to $5 higher than last week’s weighted averages.
Boxed beef was higher at noon with the Choice values up $2.78 which should have been supportive.
Lean Hogs Mostly Lower
Lean hog futures ended mostly lower on profit taking and fund long liquidation.
August lean hog futures expired on Thursday and left the October contract at a $20 discount to Aug and the lean hog index.
However, Minor doesn’t think that dictates that the futures will need to rally up to meet the cash.
He says the market is content to wait for direction from the cash market which has been holding around $110, while cutouts are around $116.
