Tag Archives: markets

Summary

The final week of September and the 3rd quarter had dawned and actually the market is feeling optimistic. From last week’s doom and gloom, Monday’s tune has changed to the bright side. Congress is working on getting back to fiscal stimulus talks, economic data is still looking decent in the US and some states are opening back almost to pre-covid levels. Now there is still the looming European lockdowns, a hostile federal government worrying about Supreme Court Nominee’s and possible negative economic data to come.

The Dallas Fed manufacturing survey produced a general activity index of 13.6 for September, up from 8.0 in July and up from the average analyst estimate of 8.5. The region’s production index rose to 22.3 for September, up from 13.1 in July. The Dallas Fed’s report indicates that factory activity within Texas expanded for the fourth consecutive month following a record contraction earlier in the year due to the Covid-19 pandemic.

The grain market split into camps on Monday. The bulls went with corn and wheat. While the bears went with soybeans. Wheat was able to benefit from a slide in the US dollar on Monday. Meanwhile the Russian Ruble rallied to start the week moving towards multi month highs against the dollar. Wheat inspected for export by USDA was also strong at 563,000 MT up 60,000 MT from last week. Year to date wheat exports are about 700,000 MT ahead of 2019. Dry weather conditions also look to persist across the hard red winter wheat belt in the US. Corn was helped higher by wheat, but corn traders will be hesitant to build to much of a long position ahead of Wednesday’s quarterly stocks report. Arlan Suderman, Stone X, made mention in his commodity commentary that the third quarter stocks report has been known to hold surprises. As for soybeans after several weeks of a strong run up the sellers have finally moved into the market. Likely the selling is a combination of managed money lightening their long position which has neared record numbers. China is also going into their Golden Week Holiday starting Thursday and will likely be out of the market for the next week to two weeks.

USDA export sales started strong this week with unknown purchasing 207,140 MT of corn and 218,300 MT of soybeans. Japan purchased 110,800 MT of corn on Monday.

In the livestock following a bearish cattle on feed report cattle were actually able to move mostly higher. A higher stock market probably assisted live cattle futures and that could have helped stabilize the feeder cattle complex. Strong cash for both feeders and fed cattle also helped to support the bulls. Last week’s livestock auction summary for Nebraska noted that the fall run of calves has started and yearling cattle are becoming scarce. The report also noted that being dry and dusty pre-conditioning will likely bring a premium this fall.

As for the lean hogs they ended mixed on Monday. The midday carcass cutout was strong though with the carcass in spitting distance of $100. That should support cash which in turn should support futures.

 

In the country on on Friday there were scattered bids, but it appeared that the majority of business had concluded for the week. Cash developed different this week than what it has over the past couple of months. Feeders held until Thursday when cash finally developed at $105 live $165 dressed. Both $2 higher than last week’s weighted averages.

For the week ending September 19, 2020, Imported Beef Passed for Entry in the U.S. totaled 43,255, 118.87% of the previous week and 101.14% of the 4-week average.

 

Expected Slaughter numbers Monday

Cattle

120,000 hd today 119,000 hd wk ago 116,060 hd yr ago

Hogs

483,000 hd today 481,000 hd wk ago 485,045 hd yr ago

 

Midday Carcass Value Monday

Beef

Choice dn 1.67 217.67

Select dn 0.58 206.40

C/S Spread 11.27

Loads  89

Pork

Carcass up 5.72 97.04

Bellies up 21.12 171.28

Loads 157

Grain Settlements

  • Corn unch up 2 1/2
  • Soybeans dn 1 3/4 – 6 1/4
  • Chicago Wht up 5 1/2 – 6 1/2
  • Kansas City Wht up 6 3/4 – 7 1/2

Livestock Settlements

  • Live Cattle dn 0.45 up  0.60
  • Feeder Cattle dn 0.25 up 0.95
  • Lean Hogs dn 0.77 up 0.95
  • Class III Milk dn 0.02 – 0.17

Pre-Opening Market Broker Commentary

Mark Gold, Top Third Ag Marketing, discusses overnight grains and what the trade may see today. Unknown destinations were back in the market for soybean meal. Audio unavailable 9-28


Jerry Stowell, Country Futures,  looks at what may impact the livestock futures today. Quarterly hogs and pigs report may prove bearish for the lean hog market . Audio unavailable 9-28


Mike Zuzolo, Global Commodity Analytics, takes a look at the midday trade. The broader market is seeing increased volatility as the US gets closer to election day.


John Payne, Daniel’s Ag Marketing, takes a closer look at today’s grain close. Soybeans finally hit the sellers wall, but it could just be harvest pressure.


Jack Fenske, York Commodities, looks at the closing market numbers. Fenske wonders if the Wednesday stocks report can be friendly.

As expected USDA and the World Outlook Board lowered their predictions for US production of corn and soybeans. Soybean ending stocks were also reduced giving bulls there added incentive to continue buying. USDA also excluded 550,000 acres of corn in Iowa due to the derecho wind event.

Wheat may be the biggest loser on the day with USDA raising it’s estimate of Australian production. US and global stocks also appear to be plentiful for wheat.

 

 

US Corn & Soybean Production 2020 Millions of Bushels September Average Range USDA August USDA 2019
Corn 14,900 14,833 14,625-15,095 15,278 13,617
avg. yield 178.5 177.7 174.8-181 181.8 167.4
Soybeans 4,313 4,286 4,192-4,391 4,425 3,552
avg yield 51.9 51.6 50.5-52.9 53.3 47.4
US 19-20 Stock Pile Millions of Bushels September Average Range USDA August
Corn 2,253 2,271 2,128-2,756 2,228
Soybeans 575 605 561-664 615
US 20-21 Stock Pile Millions of Bushels September Average Range USDA August
Corn 2,503 2,439 2,152-2,697 2,756
Soybeans 460 461 379-576 610
Wheat 926 926 900-948 925
World Stockpiles19-20 Million Metric Tons September Average Range USDA August
Corn 309.2 311.7 309.1-317.5 311.3
Soybeans 96 95.6 94-96.5 95.9
Wheat 299.8 302.8 299-316.8 300.9
World Stockpiles 20-21 Million Metric Tons September Average Range USDA August
Corn 306.8 310.4 304-317 317.5
Soybeans 93.6 93.2 89.5-100 95.4
Wheat 319.4 316.1 313.1-319 316.8

Sam Hudson with Cornbelt Marketing joins the Fontanelle Final Bell as the markets get back to work after the Labor Day holiday. In the grains they essentially picked up where they left off last week. Soybeans notched their 11th consecutive higher close. The rally partially driven by strong Chinese demand. However Hudson is cautious to ride the Chinese demand bull to far because China has spoken for a lot of grain, but has not taken a lot of delivery yet.

Hudson also covers how the current moisture and cool temperatures could impact markets. Overall he expects the impact to be negligible as the moisture may be a little to late and frosty temperatures not too damaging.

Catch the full episode here: