Grains and livestock futures end mixed on Monday.
Soybeans Sink
Vince Boddicker with Farmers Trading Company says soybeans sank on profit taking.
November has had more than an $.80 rally off the lows and ran into chart resistance around the $10.60 level but also saw some liquidation as it is end of the month and first notice day for September contracts comes up on Friday.
To get through this chart resistance Boddicker thinks the market needs some demand news related to China.
“Soybean exports have been decent with China absent but the market is waiting for that business to take the next leg higher,” he explains.
Soybean Basis Widens
Despite the recent rally in soybeans, basis levels have widened out and could stay wide going into harvest especially if China doesn’t come to the table to buy.
Boddicker says soybean basis is from $1.20 to $1.50 under the board in the Northern Plains cash markets as this area is dependent on China exports.
Corn Futures End Off Highs
Corn futures were a penny higher but ended well off early session highs with spillover from the selloff in the soybean market.
Additionally, corn ran into chart resistance as well around the $4.17 mark on the December contract.
Boddicker says the market had worked in the lower national corn yield estimate from Pro Farmer as it was expecting a cut after scouts found heavy disease pressure like Southern Rust and Tar Spot in fields.
Pro Farmer’s corn yield came in at 182.7 bu. per acre, which was 6 bu. lower than USDA’s August estimate. That put the crop at 16.2 billion bu., down nearly 500,000 from the agency’s production estimate.
Boddicker says the corn market has been supported by strong demand, especially on the export front.
While the low may be in, he thinks corn futures may move sideways until the combines provide the real truth on yield.
Wheat Sees Dead Cat Bounce
Soft red winter wheat was slightly higher, with hard red winter wheat slightly lower.
Boddicker says despite strong export inspections of 34.8 million bu. the market struggled to hold gains.
That has been a fairly consistent trend for the market as he says funds have continued to press the short side of the wheat market.
Funds hold a combined short of (-173,132) in the three classes.
Cattle Recover Well Off Lows After NWS Reaction
Live and feeder cattle futures gapped lower on the opening Monday morning in reaction to the news of a human case of New World screwworm (NWS).
Both markets ended lower except for nearby contracts but rebounded several dollars off the lows.
Boddicker says he was impressed with how well the market handled both the NWS news and the higher than expected placements in the Cattle on Feed report at 94%.
He says record high cash trade for both fed and feeder cattle/calves has supported the market on breaks and attracted funds due the discount the futures are holding to the cash.
He says tight supplies and strong demand have also played a major role in the market strength with Choice boxes above the $408 level.
Lean Hogs End Higher
Lean hog futures ended higher and extended gains from Friday and a higher weekly close.
Boddicker says tight numbers have been supporting the market and the October futures are holding a sizable discount to the Lean Hog Index.
