Grain and oilseed futures were firmer early Monday morning as markets position for the Supply/Demand report to be release by the USDA this Friday Oct 9 at 11:00 a.m. S&P futures were up .75% overnight, the dollar was lower, and crude oil was higher. Estimates for corn in this afternoon’s crop progress report are at 26-29% complete, compared to the 32% five-year average. In the macro markets, traders continue to weigh whether the Fed will raise rates, particularly after last week’s disappointing payroll report. December corn futures moved higher 1.5 cents to $3.9725/bushel, while March gained 2 cents to $4.015.
The soy complex was firmer to start the week after slipping last Friday. Estimates for soybean crop progress are at 41-43% complete, compared to the 35% five-year average. Data out of China will be limited this week due to the week-long holiday called Golden Week. On Tuesday Oct 6, the Foreign Ag Service GAT system will release monthly export data that the trade will follow closely, along with the WASDE due out this Friday where the focus will be the new acreage and yield numbers. November soybeans climbed 5.25 cents to $8.795/bushel early Monday morning, while December soyoil gained 0.51 cents to 28.35 cents/pound and December meal lifted $1.4 to $299.9/ton.
Wheat futures rebounded early Monday morning after falling last Friday after Stats Canada published its latest estimates for its fall crops. Canadian wheat production was stated at 26.06 million tonnes, which was at the high end of expectations despite being 11.4% down from last year’s level of 29.42 million tonnes. Nearby Chicago wheat futures were trading near 7-week highs early Monday on concerns about dry weather in parts of Australia and the Black Sea region. December CBOT wheat futures closed 5.0 cents lower at $5.1325/bushel Friday, while Dec KC wheat slumped 7.0 cents to $5.005, and December MWE lost 4.0 cents at $5.2725.
Cattle futures posted a sizeable rebound from mid-week losses Friday. One might credit a modest decline in choice beef cutout and a slight increase in select values, but it’s more realistic to simply credit pre-weekend profit-taking and bottom picking in the wake of the drastic losses suffered over the past few weeks. The dramatic cash losses posted Thursdayalso suggest a ‘blow-off’ bottom is occurring, with a significant chunk of the breakdown likely to be reversed at some point in the near future. December cattle jumped 1.37 cents to 131.37 cent/pound at Friday’s close, while February cattle surged 0.92 cents to 133.72 cents/pound. November feeder cattle leapt 2.40 cents to 174.52 cents/pound, while January feeders soared 2.45 cents to 169.35 cents/pound.
Despite reported slippage at both the cash and wholesale market levels Friday morning, hog futures also posted sizeable gains Friday. Those probably reflect strength spilling over from the equity and cattle markets, as well as persistent confidence about the short-term cash market outlook. The fact that the CME lean hog index has been accelerating upward this week probably encouraged bulls as well. December hog futures rallied 0.85 cents to 65.37 cents/pound in late Friday action, while February hogs climbed 1.02 to 68.22.
Cotton futures ended the week rather badly despite the late combination of equity market strength and U.S. dollar weakness. One has to suspect Thursday’s news that the International Cotton Advisory Council had boosted its forecast of 2015/16 global cotton stocks by 200,000 tonnes to 20.62 million played a role in today’s losses. Bulls can take some consolation from the fact that the various contracts remain above 60 cents/pound, but their inability to spark a substantial rally has to worry them. December cotton futures settled 0.46 cents lower at 60.14 cents/pound Friday, while May cotton declined 0.34 cents to 60.41.