December corn futures weakened Tuesday after rising to a monthly high Monday and closing higher the last six sessions, starting from the contract low of 3.61 on set on Sep 3rd. Premiums have been added to the corn market based on the USDA revising yields lower, shrinking the supply outlook a bit. Even so, Monday’s steady crop rating at 68% good to excellent combined with a favorable weather outlook is keeping pressure on the market. A stronger U.S. dollar and nervousness among investors who await a possible Fed rate hike may have also added resistance. December corn futures dropped 3 cents to $3.905/bushel Tuesday at the close, while March moved 3.25 cents lower to $4.0175.
Soybean future firmed on Tuesday to three-week highs while soymeal also bounced and soyoil fell. In part, post-WASDE short covering and profit taking accounted for the rise in soybeans. Robust demand for soybean crush in the month of August, as reported by NOPA, also added firmness to meal. NOPA reported August crush at 135.3 million bushels, compared to average of analysts’ estimates of 135.018 million. This represents the highest crush for the month of August in seven years; in 2007 NOPA crush was 137.564 million bushels. However, the first crop rating decrease for soybeans in Aug-Sep was likely the key support Tuesday. November futures were 5 cents higher at $8.89/bushel Tuesday, while October soyoil lost .46 cents to 26.47 cents/pound and October meal gained $4.1 to $318.6/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 3 cents 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.
Live cattle futures fell again Tuesday after the trade firmed yesterday, marking the fourth decline in the last five session. Boxed beef cutouts dropped with choice down 0.95 to 235.14 and select down 1.04 to 225.69 and the trade is struggling with heavier cattle weights than last year. Increased competition among the other meats may also explain the pressure. Traditionally, fall and winter see increased beef demand along with less supply, creating potential for higher prices. October cattle were 1.07 cents lower at 140.60 cents/pound Tuesday, while December cattle lost 1.15 cents to 142.17. October feeder cattle slid 2.22 cents to 192.75 cents/pound Tuesday, while January feeders lost 2.12 at 185.65.
Lean hog futures rebounded Tuesday after falling the last seven sessions. Midsession cash quotes were lower, as is the CME lean hog index. Traders were likely looking for persistent seasonal cash firmness earlier this month, so the emergence of the opposite has exerted increasing downward pressure upon prices. The lean hog index lost another 1.05%, sliding to 71.94 and continuing the cash market breakdown, showing a near convergence of cash hogs and futures; nearby hogs are trading at a mere 2 cent discount to cash. The October contract seems set to test its pivotal 40-day moving average around 65.89 cents/pound in short order. October hog futures gained 2.82 cents at 69.37 cents/pound Tuesday, while Dec hogs climbed 1.80 to 63.85.