Grains were higher on Thursday’s close with livestock and milk futures mostly lower.
Soybeans Extend Rally on China News
Bryan Doherty, Total Farm Marketing, says soybeans extended gains off of Wednesday’s reversal on technical buying and short covering.
However, the market was still trading optimism about a China deal or at least soybean purchases after President Trump posted he and President Xi would be meeting at the APEC Summit and would address their lack of buying.
Trade Aid Announced
Secretary of Treasury Scott Bessent also said during a CNBC interview Thursday morning that the federal government would support American farmers affected by China’s decision to halt purchases of U.S. soybeans.
The official announcement with the specifics of the aid package is expected on Tuesday, October 7 .
The Wall Street Journal reported the administration is considering providing $10 billion or more in aid to U.S. farmers as the agriculture sector warns of economic fallout from his far-reaching tariffs.
It could be paid for with tariff revenues.
Doherty says that will effectively keep more soybeans off the market as farmers don’t have to sell at lower prices to meet their financial obligations.
Lower Soybean Yields Also Supportive
He thinks more harvest reports are indicating lower soybean yields and that is playing into the idea that yields are not the 53.6 bu. that USDA estimated in September.
Doherty is pegging national yield at around 52 bu. per acre due to the dry finish for many farmers in the Corn Belt.
StoneX lowered their soybean yield by .7 bu.
Corn Follows Soybeans
Corn futures extended gains following the rally in soybeans and soybean meal, but also after bouncing off support at the 50% retracement level on December.
Lower Corn Yields Supportive
However, Doherty thinks just like soybeans the market is factoring in lower yields as many harvest reports have been disappointing compared to expectations due to disease and a poor finish.
Wheat a Follower
Wheat futures ended higher saw some short covering and technical buying after new contract lows on Wednesday but likely saw some spillover from higher corn and soybeans.
Cattle Futures Collapse
The cattle futures ended lower with big losses in the feeder cattle futures.
Doherty says uncertainty about the government shutdown and sharply lower Choice boxed beef values both played a role.
Choice beef is down nearly $8 in the last two sessions and has corrected over $50 off the highs.
Lower cash trade did not help with good volume in the North at $230 and dressed at $360, down $5.
Social media posts indicating the reopening of the Mexican border would happen in November pressed the feeder futures too.
Milk Futures Losing Steam
After a nearly $1.50 per hundred weight rally in the Class 3 milk futures the market saw a correction on Thursday.
Doherty says milk futures see to be losing steam or momentum.
Consumer demand is tepid and milk production is up over 3% and that is also keeping a lid on the market.
