Corn futures are down early Monday morning, along with other commodities, as global shares continued their sell-off. Chinese shares on the Shanghai Composite Index fell an additional 8.5% in Monday trading, erasing the gains for 2015 and falling 37% since the mid-June peak. The weather outlook for the remainder of August and for September continues to be void of extreme dryness or excessive rains. A respected company recently finished their crop tour and projected corn yields late Friday at 164.3 bu/ac, compared to the USDA’s 168.8 bu/ac in the August WASDE. They also see production at 13.323 billion bushels. The trade is expecting a 1-2% increase in the corn condition rating today, from 69% last week and 73% a year ago. September corn futures dropped 6 cents to $3.5925/bushel early Monday, while December lost 6.25 cents to $3.71.
The soy complex is down sharply to start the week with soybean futures sinking to six-year lows. China’s 37% drop in their stocks since June have traders uncertain about demand prospects in the emerging markets. The trade expects a 1-2% increase in the soybean condition rating this afternoon, from 63% last week and 73% a year ago. A respected firm sees soybean yields at 46.5 bu/ac compared to the USDA’s most recent forecast of 46.9 bu/ac and they see soybean production at 3.887 billion bushels. The company released their findings late Friday after their crop tour. September futures fell 16.25 cents to $9.0525/bushel Friday, while September soyoil lost .62 cents to 27.36 cents/pound and September meal dropped $4 to $326.9/ton.
The early Monday morning in commodities was no respecter of wheat futures as the wheat complex was down up to 1.5% across the board. Since wheat has already been discounted over the past few months on plentiful supplies, Fridays’ slide combined with this early morning drop still has nearby Chicago wheat almost 30 cents higher than near-term lows hit back in May. Prices weren’t helped much by news that the EU and Russia are expecting a record wheat crop. EU wheat prices has fallen below corn prices, making it a more attractive feed substitute. September CBOT wheat futures slid 8 cents to $4.915/bushel Monday, while Sep KC wheat fell 6.75 cents to $4.6425/bushel, and September MWE declined 3.25 cents to $4.9825.
Live cattle, as well as hogs, traded substantially lower Friday as the sell-off in the macro markets ensued. It remains to be see whether the rout today was mostly macro-themed and whether or not live cattle futures have room to go before hitting a seasonal low. The USDA Cattle on Feed report mostly met expectations and will probably have minimal impact uponMonday’s opening. October cattle dropped 2.70 cents to 143.85 cents/pound Friday, while April futures fell 2.55 cents to 144.75. Meanwhile, October feeder cattle futures dropped lower 4.5 cents to 199.47 cents/pound Friday, while January feeders lost 4.5 cents to 191.22.
Lean hogs were down hard Friday, losing 3% in the October contract and 4% in the December contract. Just two weeks out from Labor Day, it stands to reason that Friday’s steep losses may not only be symptom of the macro economy but perhaps also a signal of the reversal lower toward the low demand and higher supply season for hogs. Fall/winter have traditionally been the weaker time of year for the meat as demand subsides and supply of hogs surges due to breeding stock and the time of the cyclical gestation. October hog futures slid 1.92 cents to 62.82 cents/pound Friday, while February declined 2.15 cents to 64.00.
The cotton market ended neutral-higher Friday. Big equity and U.S. dollar losses may exert offsetting impact upon apparel demand. China’s cotton reserves sales have slowed as mills avoid auctions, according to Reuters. Their aim was to sell 1 million tonnes of fiber from state stocks by the end of August. In the US, stronger than expected exports and lower than expected production have boosted the ICE futures in recent days despite the mostly neutral-downward movements over that past few months. On August 12 the USDA reduced the estimate for the 2015/16 crop to 13.08 million bales (480 lb.) from 14.5 million bales, causing the price rally. December cotton futures were unchanged at 66.91 cents/pound Friday, while May rose .02 cents to 66.43.