The grain markets retreated in the overnight session, in line with what has been an up-and-down trade this week in a narrow trading range. Macro markets are still a focal point for commodities as are currency exchange rates as they speak to the state of global demand and purchasing power. The Dow closed down 51 points Wednesday while the Shanghai Composite gained 0.89% Thursday, but the Nikkei fell sharply by 2.7% as global stocks remain jittery. News has broken that a tropical storm may have carried to corn disease, tar spot, into the heart of the U.S. farm belt for the first time as winds and rain blew in from Latin America. The USDA has confirmed cases of tar spot in three Illinois locations and four in Indiana. December corn futures fell 1.5 cents at $3.8175/bushel early Thursday morning, while March edged 1.5 cents lower to $3.9325.
Soybean futures climbed slightly Thursday morning after tumbling early this week on export worries driven in large part by global economic uncertainty. All-time record weakness in the Brazilian real, negative for U.S. exports, has spurred forward sales of their 15/16 soybean crop with some analysts suggesting 45-50% of the crop now being planted has already been sold and only ideas of further real weakness has prevented even more sales. The U.S. Soybean Export Council has reported that buyers from China have agreed to purchase an amount of U.S. soy that will be revealed at a signing ceremony in Des Moines today from 12:15 p.m. to 1 p.m. CDT. November futures were 3 cents higher at $8.6675/bushel early Thursday, while October soyoil gained .14 cents to 26.47 cents/pound and October meal moved higher $1.0 to $304.10/ton.
The wheat complex was lower overnight as the macro markets are weighing commodities to start the week. STATS Canada will issue their all-wheat stocks report Thursday with trade estimates falling to 6.5 million tonnes, down 37% from a year ago. The trade awaits the release of export inspections data released mid-morning Monday as well the September WASDE due out a week from this Friday. September CBOT wheat futures lost 3cents to $4.74/bushel early Monday, while Sep KC wheat fell 1.25 cents to $4.565/bushel, and September MWE dropped 0.5 cents to $4.90.
Wheat futures were lower early Thursday morning after rising to one-month highs and breaking out above the 50-day moving average yesterday, where it hasn’t traded since mid-July. Some weather concerns regarding the Black Sea and Australian wheat harvest, where frost damage to crops is feared, has increased buying interest and a weaker dollar is helping support the trade. Dryness in Ukraine has caused some minor concerns where is has been too dry to consider planting winter grains. U.S. winter wheat plantings are coming along nicely at 19% complete, versus 9% last week and compare to the 20% five-year average. December CBOT wheat futures were 1.75 cents lower at $5.0575/bushel early Thursday morning, while Dec KC wheat moved lower 2.75 cents to $4.99, and December MWE lost 3 cents to $5.2425.
Lean hogs fell for the second straight session Wednesday despite the weaker dollar, falling lower along with live cattle on long liquidation and technicals. The Cold Storage report show pork stocks that were more in line with expectations that was the case with beef, yet surging supply still added pressure to futures. Stocks increased by 23 million pounds over July, marking the largest August increase in three years. Pork supplies in storage for August was reported to be 21% higher than a year ago. Friday’s Hogs & Pigs report, due out at 2:00 p.m. CDT, will add more clarity to supply. Hog slaughter so far this week was at 1.270 million head, compared to 1.291 million last week and 1.244 million this time last year. Cash hogs were .65 cents higher to 67.55. October hog futures lost 0.45 cents to 70.55 cents/pound Wednesday at the close, while Dec hogs were 0.57 lower to 64.22.
Cotton futures began the week higher Monday despite Chinese stocks closing lower, perhaps on month-end positioning. The tighter than expected balance sheet for cotton and the drop in the condition rating have given cotton bulls something to talk about as of late but world market problems are now the driver. While the global scene for cotton is largely still plagued by oversupply, the recent bullish data appears to be giving way to world economic and currency struggles, particularly related to Chinese demand fears. December cotton futures lost .13 cents to 63.13 cents/pound Friday, while Mar rose 0.17 cents to 62.85.