Corn futures strengthened overnight after falling over 2% yesterday. The 6 to 10 day weather forecast is now calling for widespread above-average rainfall throughout the Midwest. The Energy Information Agency reported that ethanol productions dipped from 973,000 to 965,000 barrels per which is still a better than expected pace for 2015. The trade estimate for corn export sales are 200,000-400,000 tonnes for old-crop and 150,000-400,000 for new crop. The U.S Dollar index is stronger by .37% and the DJIA was up 121 points yesterday. September corn futures gained 3.5 cents to $3.7125/bushel early morning Thursday, while December lost 3.5 cents to $3.7825.
The soy complex boosted overnight as weather patterns for the make-or-break month of August remain uncertain. The other grains seem to be following this theme higher. The trade estimate for soybean export sales is 100,00-200,000 tonnes for old-crop and 700,000-900,000 tonnes for new-crop. The EIA will release biodiesel production data on Friday and USDA Fats and Oils report will be out on Monday. August soybeans gained 7.25 cents to $9.9025/bushel early Thursday, while August soyoil climbed 0.19 cents to 30.40 cents/pound and August meal rose $3.6 to $353.60/ton.
Wheat futures continued their bearish trend Wednesday, erasing yesterday’s gains with Chicago wheat down nearly 3%. Nearby Chicago wheat is now trading nearly 30 cents below the 100-day moving average of $5.22/bushel and is at 5-week lows. The Wheat Quality Council tour calculated a wheat yield of 51.1 bushels/acre for their first day, compared to 48.3 last year, marking their highest first-day yield results since 2007. Abundant supply and weaker than hoped for exports are keeping a lid on wheat’s upside potential. September CBOT wheat futures lost 14.5 cents to $4.9625/bushel at the end of trading Wednesday, while Sep KC wheat fell 10 cents to $4.9475/bushel, and September MWE dropped 10.75 cents $5.295.
Nearby live cattle futures slid a quarter-cent Wednesday after a slight bounce after bottoming last Friday to a 13-month low and a small bounce earlier this week. According to a recent Goldman Sachs report, live cattle futures may be headed to the 140 mark by next summer as competition from other meats stays relentless, particularly in light of economic uncertainty and the subsequent changes to consumption patterns. Even so, some analysts suggest that with the rise in cattle futures early in the week, a bottom may have been reached. August cattle lost .27 cents to144.92 cents/pound, while December futures fell .38 cents to 148.27. Meanwhile, August feeder cattle futures gained .27 cents to 211.47 cents/pound, while November feeders advanced .10 to 205.00.
Hog futures closed near the technical level of 80 cents/pound on Wednesday and closed almost 1.50 cents above the lean hog index, despite lean hog futures trading at a discount to cash. Hogs also traded nearly 6 cents above the 100-day moving average of 73.96. Retail pork prices in China have been surging since March 2015 with prices rising 7% year-over-year on a monthly basis and 20% for higher quality cuts, according to a recent report, bringing back fears of the China inflation trouble of 2011. Hog futures closed 0.77 cents higher at 79.57 cents/pound Wednesday, while December rallied 0.92 cents to 61.92.
The cotton market weakened Wednesday. Economic activity in China largely remains the focus for cotton traders as they are not only the world’s largest cotton grower but are also the world’s largest cotton consumer and cotton importer. Recent fragility in China’s equity markets is helping to keep downside pressure on the trade, as if their supply problems weren’t problem enough. The U.S. Dollar index is also higher this morning, and, as is often the case, the inverse relationship between the Dollar and commodities has cotton lower, though this is certainly not always the case. December cotton futures lost .75 cents to 63.89 cents/pound Wednesday, while May fell 0.56 cents to 64.14.