Heavy rains have led to heavy buying from funds as it seems that many are covering their shorts. The grain markets are higher before sunrise Friday morning on what may in part be attributed to end-of-month erratic trading but, to a larger degree, follow- through buying on weather risk. New-crop export sales came in at 297,000 tonnes compared to the 100,000-200,000 tonnes estimate. Reported old-crop sales were 496,800 tonnes, compared to the 500,000-700,000. Charting technicians could be watching the 100 day moving average of 3.7925 for July and 3.9575 for December. The US Dollar index is up .05 to 95.24. July corn futures gained 4.75 cents to $3.8125/bushel early Friday morning, while December was up 5 cents to $3.9725.
The soy complex powered through the overnight session pushing higher Friday morning. Just when it seems the rains could subside, downpours linger with yet more on the horizon. The Dow Jones survey, reported yesterday, of the average of analysts’ estimates for soybean acres was 85.187 million acres, compared to the March USDA estimate of 84.635 million acres. The USDA export report showed old-crop sales of 118,800 tonnes which was on the low side of the trade estimate of 100,000 to 200,000 tonnes. New-crop soybean sales were 210,500 tonnes, larger than the 25,000-125,000 tonne estimate. July soybeans gained 7.75 cents to $10.08/bushel at dawn Friday morning, while July soyoil edge higher .12 cents to 33.48 cents/pound, and July meal climbed $3.1 to $339.8/ton.
Wheat futures continue their surge on weather in the overnight session. Export sales for wheat were reported 434,300 tonnes, which was on the high side of 200,000-450,000 estimate. Reuters reports that wheat exports from Ukraine, Kazakhstan, and Russia are expected to fall 5% for the 2015/16 marketing year on their dry autumn weather. July CBOT wheat futures gained 16 cents to $5.48/bushel during pre-open trading, while July KC wheat advanced 13.75 cents to $5.49/bushel, and July MWE climbed 12.5 cents to $5.87.
Yesterday, the livestock complex plunged in what appeared to be a technical shift likely spurred by the seasonal demand shift lower. Wholesale beef cutouts still have managed to maintain strength, presumably a result of capturing late margins from last minute retail buying ahead of the 4th of July. Resistance may continue Friday until such time as buying demand for Labor Day trends higher out of the post 4th trough. August cattle futures plunged 1.75 cents to 148.57 cents/pound at the close Thursday, while December futures dropped 1.70 cents to 152.37. Meanwhile, August feeder cattle futures dropped 4.50 cents to 219.05 cents/pound, and November feeders lost 4.40 cents to 213.80.
Thursday, CME hog futures fell, in what appeared to be a larger breakdown in the proteins. Friday, futures could trend lower as traders remain cautious ahead of the upcoming report and, to a larger degree, may be preparing for the post-4th slowdown in demand. The USDA releases the quarterly hogs and pigs report at 2pm. The average estimates reported for the report are: 107.8 percent for all hogs and pigs, 102% for kept for breeding, and 108.6% for kept for market. August hog futures slipped .12 cents to 72.22 cents/pound, while December dropped .27 cents to 60.60.
ICE cotton futures lifted higher overnight. The trade seems to have been bouncing back and forth within a small trading range as it weighs whether US production numbers will be consistent with planting expectations and responses to the global oversupply of the crop. According to Thursday's export report, net Upland sales of 60,500 RB for 2014/15 were up 15% from the previous week, but were down 24% from the prior 4-week average, perhaps all but negating the trade. Further market direction is likely to be gained from next Monday's crop progress report and the acreage andstocks reports next Tuesday. The July cotton futures rose to 64.88 cents/pound overnight, while December added 0.30 to 65.68.