For the week, September corn was 4 cents higher, December corn gained 5 1/4 cents, September soybeans put on 5 cents, November soybeans were up 12 1/2 cents, September soybean meal rallied $17.70 per short ton, September soybean oil lost 264 points, September soft red winter wheat fell 19 1/4 cents, September hard red winter wheat dropped 24 1/2, September hard red spring wheat lost 21 1/4 cents and December cotton plunged 265 points.
Grains and cotton end lower Friday, with cattle mixed and a big up day in the stock market.
Darren Frye, Water Street Solutions, says the sell off in grains was tied to profit taking after some gains early in the week, but it was also tied to a little farmer selling and a change in the weather.
“The forecast is also calling for a little wetter weather, especially in parts of the Dakotas, Minnesota, Iowa and maybe reaching farther South and West than what was originally thought a couple of days ago,” he explains.
The models are indicating the heat ridge will break down midweek to allow for cooler temperatures as well. As a result, Frye says the market removed some weather premium.
Corn and soybeans did technical damage on the daily charts, according to Frye, but if forecasted rains don’t materialize the markets will shoot back higher Sunday night.
“We had a pretty bad close today if you look at the daily charts. We were up on the week, surprisingly enough, but not by much ... 5 cents in corn and 12 cents in soybeans. Obviously if we had immediate strength on Sunday night because of weather or something else you could negate the negative action of today, but I think I’d be looking for new lows in these markets unless we see a quick turnaround.”
Frye doesn’t believe traders will want to take a long position ahead of the August WASDE as the market is bracing for a bearish report.
“We could have acreage changes, we could have yield changes and certainly that will affect the balance sheets in the end,” he says.
A bearish ruling against biofuels also pulled down corn and soybean oil.
On Friday, the U.S. Court of Appeals for the D.C. Circuit issued an order vacating most of EPA’s 2022 denials of petitions for small refinery exemptions from Renewable Fuel Standard obligations, remanding those petitions to EPA for further proceedings. The court’s opinion remains under seal and is unavailable for public review.
Both classes of winter wheat made new contract lows and hard red spring wheat was also lower under the pressure of ample supplies and better yields.
“Right now the spring wheat crop looks great. There might be some disease issues, but in the end, a big crop,” Frye says.
Additionally, cotton made news contract lows again and Frye thinks that market could see more downside pressure ahead as the market is tied to crude oil and economic indicators.
“What we see is the economy weakening, which is not friendly to cotton,” he explains.
Meanwhile, live cattle made new highs for the move on the heels of $2 higher cash at $312 dressed in the North and $190 live in the South.
However, the futures ended mixed as August is nearly in line with that cash.
Feeder cattle ended higher with the sell off in corn.
