The grain and oilseed markets were mixed overnight after the Fed’s decision yesterday to leave interest rates unchanged. The U.S. has dropped sharply in response which could be supportive for U.S. exports. U.S. stocks responded mixed and closed down 65 points. Chinese stocks closed higher Friday. China has proposed to lower by 10% the price of corn they buy from farmers as the build government reserves. Ukraine is projecting their corn crop falling by almost 20% to no more than 23 million tonnes due to hot weather. December corn futures lifted 1 cent to $3.8075/bushel early Friday morning, while March 1 cent higher to $3.92.
Soybean futures were lower early Friday morning, under pressure by a poor export outlook, despite recent reports that suggest China may buy serveral million tonnes of soybeans when their president visits IA next week. Soybean export commitments are down 36% over last year , compared to the expectations by the USDA that commitments would be down by 6%. A senior trader based in China at a large U.S. grain house reported Thursday that Chinese soybean imports for 2015/16 may fall for the first time in a decade, stating “China’s demand has approached it’s upside limit in the short term and there is limited room for further growth in the future”. November futures were 1.75 cents lower at $8.845/bushel early Friday, while October soyoil lost .20 cents to 26.47 cents/pound andOctober meal gained $0.8 to $314.0/ton.
The wheat complex was lower overnight as the macro markets are weighing commodities to start the week. STATS Canada will issue their all-wheat stocks report Thursday with trade estimates falling to 6.5 million tonnes, down 37% from a year ago. The trade awaits the release of export inspections data released mid-morning Monday as well the September WASDE due out a week from this Friday. September CBOT wheat futures lost 3 cents to $4.74/bushel early Monday, while Sep KC wheat fell 1.25 cents to $4.565/bushel, and September MWE dropped 0.5 cents to $4.90.
Record high cattle weights, declining demand, and falling cash values maintained pressure on live cattle as futures close mixed Thursday. Average trade estimates for the Cattle on Feed report due out this afternoon are: On-Feed 103.4%, Placed 100.2%, and August Marketings 94.6%. Box beef values were mixed with choice down .08 to 233.41 and select up .02 to 225.03. October cattle were .55 cents/pound lower at 136.85 Thursday, while December cattle lost .02 cents to 139.32. October feeder cattle slid 0.27 cents to 187.80 cents/pound Thursday, whileJanuary feeders lost 0.27 at 180.80.
Lean hogs surged Thursday after mostly falling lower for the last two weeks on the seasonal demand shift lower. A sharply lower dollar may have added support. Much of today’s action was technical in nature- in late morning trading, hog futures were up 3 cents, the maximum daily price limit for the CME, on bull stops and bull spreading, where traders by the nearby and sell the deferred. The lean hog index was down again by .64% as cash values were within .7 cents of converging with the October contract, but the cash price equivalent is expected to stabilize tomorrow. October hog futures gained 2 cents at 70.57 cents/pound Thursday at the close, while Dec hogs climbed 1.97 to 64.35.
Cotton futures began the week higher Monday despite Chinese stocks closing lower, perhaps on month-end positioning. The tighter than expected balance sheet for cotton and the drop in the condition rating have given cotton bulls something to talk about as of late but world market problems are now the driver. While the global scene for cotton is largely still plagued by oversupply, the recent bullish data appears to be giving way to world economic and currency struggles, particularly related to Chinese demand fears. December cotton futures lost .13 cents to 63.13 cents/pound Friday, while Mar rose 0.17 cents to 62.85.