The corn market seemed to suffer sustained weakness Monday night. Yesterday’s quarterly USDA Grain Stocks report stated September 1 U.S. corn inventories at 824 million bushels, which easily topped forecasts averaging around 680 million. After dropping significantly in response Monday afternoon, corn prices continued sliding in overnight action. December corn slipped 1.25 cents to $4.4025/bushel early Tuesday morning, and May declined 1.25 cents to $4.61.
The soy complex also remained under post-report pressure. CBOT traders expected Monday’s Grain Stocks report to state September 1 U.S. soybean stockpiles at 124 million bushels, but the USDA put that actual figure at 141 million. Not only did the soy complex dive in immediate reaction to the numbers, it continued sliding overnight. Soy oil futures were mixed as a result of Asian palm oil gains early this morning. November soybeans fell 10.75 cents to $12.72/bushel around dawn Tuesday, while October soyoil was steady at 40.83 cents/pound, and October soymeal dipped $3.8 to $406.1/ton.
Wheat futures were mixed to lower in early Tuesday trading. The Grain Stocks report was moderately supportive of the wheat outlook since the USDA stated early-September stocks slightly below forecasts. The Small Grains Summary also held bullish implications for the KC market, but was much less favorable for CBOT and MGE futures. Traders seemed uncertain as to how to react overnight, but technical factors seemed to point toward a short-term pullback. December CBOT wheat slid 3.0 cents to $6.755 bushel in early Tuesday action, while December KCBT wheat skidded 1.0 cent to $7.385, but December MGE futures were flat at $7.2875.
Cattle futures remained surprisingly weak Tuesday morning. Despite significant cash strength last Friday, live cattle futures turned downward Monday. A big Friday drop in beef values might have depressed the market, but wholesale values rose significantly late yesterday. This suggests traders are concerned about the short-term outlook, possibly due to an absence of news with the federal government shutdown halting routine livestock reports. October cattle futures sank 0.30 cents to 127.55 cents/pound as trading accelerated Tuesday morning, while December sagged 0.10 cents to 131.87. Meanwhile, October feeder cattle stumbled 0.12 cents lower to 163.97 cents/pound, and January lost 0.42 to 163.57.
Hogs futures may also be suffering a post-report hangover. Last Friday’s quarterly USDA Hogs & Pigs report had significantly bearish implications for the fall-winter outlook, so hog futures tanked Monday. Indeed, the reaction seemed rather muted, which may help explain the persistent weakness seen overnight. Sizeable cash market losses probably depressed prices as well. October hog futures tumbled 0.25 cents to 91.72 cents/pound early Tuesday morning, while December dropped 0.22 cents to 86.40.
Concerns about the U.S. cotton crop seemed to support futures overnight. The Monday afternoon Crop Progress report cut U.S. cotton crop good-to-excellent ratings by 2%, which probably encouraged ICE market bulls. Moreover, traders are worried that forecasts for stormy weather during the days ahead, will ultimately result in significant damage to the big Texas crop. December cotton gained 0.06 cents to 87.27 cents/pound just after sunrise Tuesday, while March slipped 0.03 to 86.95.