Grains ended slightly higher Thursday as well as lean hogs, with cattle lower.
Corn Bounces on Export News, China Confusion
Jim McCormick, AgMarket.Net, says corn saw a dead cat bounce with 3-cent gains on light short covering and solid export news.
USDA reported flash sales totaling 13.2 million bushels Thursday. A sale of 5.3 million bushels of new crop corn was initially reported sold to China but within an hour USDA changed the origin to South Korea. Unknown destinations also bought corn with 3.3 mb of old crop and 7.9 mb of new crop sales.
McCormick says, “China has not bought U.S. corn since mid-summer of 2024.”
Weekly corn exports were much improved from the prior week at 25.3 mb old and 28.9 mb new crop.
Corn Sees Muted Response to Pollination Problems
Production issues in corn tied to pollination continue to expand with 10 plus states seeing overly tight tassel wrap and rapid growth syndrome.
However, the price response has been muted as McCormick says its hard for the market to determine the scope of the problem and the potential for lost yield.
“Even if corn yield falls five bushels, what national yield do you subtract that from? If it is 186 then we are still looking at a trend line yield,” he explains.
He says the extent of the production losses may not be known until September or maybe until the combines roll this fall.
Markets Fade Trade Deals
McCormick says the grain markets overall have been discounting the announced trade frameworks because they are vague and don’t really equate to export sales for agriculture that are above and beyond current business.
It may take several weeks for the frameworks to be finalized into deals that translate to demand and by then it may be too late in the season for the American farmer to capitalize on it he suggests.
“The $8 billion of ag products Japan has committed to buy are nearly equal to current purchases,” according to McCormick.
Soybeans Stuck Waiting for China News and Purchases
November soybeans saw fractional gains Thursday with help from corn but are still eyeing the talks early next week between U.S. and Chinese trade officials in Stockholm.
So far China is still absent from the U.S. soybean market and new crop exports at this point in the marketing year are the lowest in 20 years.
Weekly exports were only 5.9 million bushels on old crop soybeans and 8.8 million bushels new, so lackluster.
He says the fear is without a trade deal soon the U.S. may lose out to the Chinese market this fall.
Wheat Follows Corn
Winter wheat contract saw some spillover support from the slightly higher corn market and weekly exports were also strong at 26.2 million bushels.
However, McCormick says wheat has been unable to forge a low and has been under performing because its been held back by lower corn prices and there seems to be enough wheat in the world.
Cattle See Profit Taking Pre-Report
Both live and feeder cattle futures corrected from all-time highs with routine profit taking ahead of USDA’s Cattle on Feed and Cattle Inventory reports.
He says the market is expecting a smaller herd than a year ago with average trade guesses at 98% but will be watching to see if there is any evidence of cattle producers retaining heifers to rebuild the herd.
The futures are also waiting for direction from the cash market with only a handful of sales on Thursday in Texas at $230 to $231, roughly steady to $1 compared to the previous week.
So far cash has been holding up the futures but the market has also continued to make new highs as higher beef prices show no sign of rationing consumer demand.
