CBOT corn futures were neutral-higher Friday morning. The macro markets have largely affected the grain and oilseed trade this week. The Dollar is down sharply to 95.34 and gold has risen this week. Crude oil has fallen to the $46 range and the DJIA fell 358 points Thursday, or 2.1%, making it the worst day of the year for the Dow. The Chinese market has fallen 11.5% this week. Argentine farmers plan to plant 2.72 million hectares of corn for 2015/16, stated the Buenos Aires Grain Exchange. The trade expects the corn crop condition to improve in Monday’s report. There is new out of Beijing that China’s imports of corn and corn substitutes hit a record high in July as feed mills look for sources cheaper than domestic corn. September corn futures were unchanged $3.71/bushel early Friday morning, while December climbed .25 cents to $3.875.
The soy complex pulled back overnight after staging an impressive rally at the close Thursday. The weather outlook for finishing the soybean crop does not show any troubling signs, despite news Thursday that July 2015 was the hottest month ever recorded for planet earth, according to NOAA. This favorable weather and larger concerns about the health of the global economy, particularly Chinese demand, have soybeans on pace for a second straight weekly loss. Crop tours now in the southwest Minnesota region reported that yields will meet high expectations. Palm oil has fallen 13% in the last 8 weeks posting longest weekly losing streak in 16 years. September soybeans fell 3.75 cents to $9.1775/bushel early Friday morning, while September soyoil lost .21 cents to 27.77 cents/pound and September meal dropped $0.4 to $330.5/ton.
Wheat futures seemed to follow soybeans higher, helped also by the weaker dollar. News of Argentina’s higher wheat crop projection may have limited gains. 2015/16 wheat export sales were lackluster at 314,400 tonnes, compared to the estimate of 300,000 to 500,000. U.S spring wheat harvest progress and crop condition ratings this week are above average and adding to the abundant supply outlook. EU wheat has fallen to three-month lows on larger than anticipated French wheat production. September CBOT wheat futures rose 10 cents to $5.0625/bushel at the close Thursday, while Sep KC wheat raised 5 cent to $4.8125/bushel, and September MWE advanced 4.75 cent to $5.13.
Live cattle traded substantially higher Thursday, nearly recouping the 1.5% losses yesterday. While traders anticipate a seasonal shift lower as holiday buying at the wholesale level begins to peak, apparently the run-up in cattle futures still has legs. The boxed beef cut-out quotes released after the close Wednesday advanced and seemed to foretell the futures bounce. The USDA Cattle on Feed report will be out this Friday at 2:00 p.m. CDT. October cattle rose 1.10 cents to 146.25 cents/pound Thursday, while April futures lifted .45 cents to 146.97. Meanwhile, October feeder cattle futures dropped lower 0.12 cents to 203.97 cents/pound Thursday, while January feeders gained 0.07 cents to 195.72.
Like yesterday, the seasonal shift lower on a holiday buying plateau appears to have outweighed strength in the cash hogs Thursday. Despite the lean hog index still being 14 cents higher than the October lean hog futures contract, lean hog futures tumbled today. While it remains to be seen if this is a temporary correction, it is beginning to look like a reversal lower from the impending demand shift. The USDA National Daily Direct afternoon hog report showed carcass values lower by .57 cents to 74.87. The daily hog slaughter was 427,000 Thursday, compared to 427,000 a week ago and 406,000 a year ago. October hog futures slid 1.30 cents to 64.75 cents/pound Thursday, while February declined 0.97 cents to 66.15.
The cotton market lowered overnight on profit-taking but surged again Thursday, on the prolonged rally that emanated from the bullish, and very surprising, WASDE data last week. China, the world’s second largest cotton producer, is expected to produce 5.5 million tonnes of the fiber in the upcoming season, according to Reuters. This is compared to what the China Cotton Association (CCA) previously predicted; a crop of 5.86 million tonnes and 15% lower than the 2014/15 crop of 6.5 million tonnes. 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. 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 gained .44 cents to 66.93 cents/pound Thursday, while May rallied .39 cents to 66.47.