The grain markets are broadly higher early Thursday morning, seeming to be fueled primarily by concerns about excessive moisture and regained confidence in Chinese demand after their market rebound. While it appeared the 6 to 10 day forecast would have quite a bit less chance of rainfall, the probability of above average rains has crept back into the picture. Trade estimates for today’s weekly corn export sales are 400,000-600,000 tonnes for old crop and 200,000-350,000 tonnes for new crop. September corn futures climbed 2 cents to $4.265/bushel early morning Thursday, while December added 1.75 cents to $4.36.
Soybeans production and yields concerns are propelling futures higher in overnight trading as weather and planting worries persist. While above normal temps and the absence of extreme heat in the forecast are favorable, continued rains in the central Midwest and the eastern Corn Belt are bringing more scrutiny to yield and production estimates. The trade estimates for weekly soybean export sales are 100,000-300,000 tonnes for new crop and -40,000-200,000 tonnes for old crop. August soybeans climbed 15.25 cents to $10.12/bushel just after dawn Thursday while August soyoil advanced 0.45 cents to 32.14 cents/pound and July meal remained unchanged at $350.8/ton.
After falling yesterday in response to export competitiveness worries, wheat futures rebounded in the overnight session, perhaps fueled in part by the larger rally in the oilseeds. News this morning of a rebound in the Chinese stock markets has likely created renewed optimism about the overall financial markets. Confidence in the Chinese markets has resurged as stocks soared to their biggest daily gain in six years on Thursday. September CBOT wheat futures gained 3.75 cents to $5.8125/bushel just after sunrise Thursday, while Sep KC wheat gained 2.5 cents at $5.855/bushel, and September MWE advanced 5 to $6.24.
Deteriorating cash expectations continued their pressure on CME futures Wednesday as the livestock complex was widely lower. Seasonal demand lulls, prospects of increased feed costs due to uncertainty in the grains, and generalized global financial concerns likely contributed to the onslaught. Retailers have taken the post-holiday demand cliff seriously as wholesale beef has fallen $14 for choice and $11 for select since June 24th. August cattle futures dropped 1.80 cents to 149.00 cents/pound Wednesday, while December futures lost 1.3 cents to 153.55. Meanwhile, August feeder cattle futures plunged 3.1 cents to 213.62 cents/pound, and November feeders fell 2.72 to 209.85.
Lean hog futures followed the rest of the livestock market lower Wednesday. It’s not surprising to see somewhat of a pullback post Fourth of July as traders anticipate the demand pressure. Turmoil in the Chinese stock markets is probably not helping matters much as investors worry about the waning of Chinese demand due to financial setbacks. As well, often lean hog futures can trade at a significant discount to cash hogs, which fell sharply recently. Conversely, the lean hog index turned higher late last week and is expected to come in at 78.07 tomorrow, perhaps suggesting growing support. August hog futures lost 0.47 cents to 75.80 cents/pound Wednesday, while December slid 0.92 cents to 62.77.
International news undercut cotton futures Wednesday, with concerns about Chinese demand if/when its stock market breakdown runs its course. News that Chinese officials will begin selling cotton out of its mountainous reserve probably didn’t help the bullish cause either. Early news that Egypt had halted cotton in an effort to help their domestic cotton growers, thereby reducing prospects for U.S. exports. December cotton futures ended Wednesday having tumbled 0.66 cents to 65.30 cents/pound, while May sank 0.63 to 65.37.