Corn bounces on Monday with soybeans and wheat lower. Cattle surge, while hogs end mixed.
Corn Shows Resilience
Corn futures ended slightly higher on Monday on short covering and showing resilience.
DuWayne Bosse, with Bolt Marketing says he was surprised at how well the corn market handled the harvest pressure that is starting to ramp up across the Corn Belt.
“I am impressed that we close near the highs of the day. You know, $4.21 3/4 on that Dec contract, that’s nice. The reason I’m a little surprised, I keep thinking you’re going to see more farmers selling here is, is harvest rolls on the weather has been near perfect last week,” he remarks.
Corn Export Inspections Strong
While the market has been flying blind with the lack of USDA news due to the government shutdown, it did get a solid piece of data in export inspections.
Weekly inspections for corn came in at 63 million bu. which is a strong figure and the marketing year total so far is 264 million bu. which is up 56% from a year ago.
Corn Yields Also Disappointing
Bosse says the market is also absorbing the harvest pressure as yields are coming in disappointing with the dry finish to the season and disease problems in part of the Corn Belt.
“Yeah, the yield reports coming into our office are a bit disappointing. And they probably should be, Michelle, 99 million
acres of corn planted. That means we’re not all in Iowa in Illinois. That means my fringe area that’s behind me planted a lot more corn. And we’re not going to yield the 230 or anything. So I think that yield does come down. I’m at a 180 I’m
going to hold there for now until I see anything different,” says Bosse.
No October WASDE
While USDA will not be confirming lower yields without an October WASDE on Thursday Bosse says that may actually be a good thing as the agency tends to slow play yield cuts and the market may have been disappointed with that lag effect.
“Remember, we had that last year too. Soybean harvest came in and so many beans were harvested at eight or nine percent. The yield dropped quite a bit. That wouldn’t have happened in the October report,” he adds.
Soybeans Fade Awaiting Trade Aid News
Soybeans hit chart resistance again and consolidated awaiting the Trump Administration’s trade aid package.
An announcement is expected on Tuesday and so farmers and the market may be waiting for details. However, Bosse says with the government shut down it may be difficult to get those payments disseminated in a timely fashion.
China Trade Deal?
Bosse says he was surprised with the rally in the soybean market on President Trump’s social media post on his scheduled meeting with Chinese President Xi at the end of the month and his suggestion soybean purchases would be discussed.
“I mean, it’s great that we might be close to a trade deal with China, but if they’re not going to talk for three or four more weeks, that’s just a lot of time ahead of us,” he explains.
And he says even if the U.S. was to strike a deal the U.S. has lost export business to China it may never be able to get back, at least for this marketing year.
Wheat Pressured by Dollar, Russia Export Tax
Wheat futures were also slightly lower as Russia has announced it will lower its export tax by 20% the week of Oct. 8.
Plus, Bosse says the sharply higher dollar also curbed buying interest.
Cattle Futures Surge on Brazil Trade News
Cattle futures surged with feeders the leaders again which Bosse attributes to President Trump’s meeting with Brazil President Lula.
While it was characterized as productive the U.S. did not drop its additional 50% tariff on Brazil imports, including beef which was seen as positive for the market.
Cash Feeders on Fire
However, Bosse says boxed beef was slightly higher at noon and the cash feeder market is once again hot to start off the week.
Lean Hogs Consolidating
Lean hog futures ended lower in the front months after technical damage was done to the charts last week.
He thinks the top is in and expects further fund long liquidation.
