CORN HIGHLIGHTS: Corn futures traded mixed on Thursday with the front months staying supported by the strong demand tone. December led the way, closing 3 cents higher and at its highest price in all of 2020 at 419-14. Friday ended a strong week for the corn market with December gaining 17-1/4 cents and March up 13-1/4. December closed at its highest weekly values on Friday since July 2019. Wetter forecast going into the weekend may slow the harvest pace, and a market looking for corn keeps some premium in the front months. Last week saw corn harvest at 60% complete, well ahead of schedule, but in some regions, progress was likely slowed by either rain or snowfall this week. Demand has been the driver in the price strength. Weekly export sales were at 72.1 mb, and the market added another small sale of 3.9 mb to unknown destinations today. A developing story was the report the China would be looking to open their grain import quotas for tariff free imports. Currently, that level is at 7MMT, but the U.S. has sold over 10 MMT to China for the marketing year. The move has been expected, but still a positive for additional demand in the corn market. The corn market is looking for bushels, this provides the support in the front months. As harvest moves past the 70% levels, hedging pressure will likely soften, providing additional support.
SOYBEAN HIGHLIGHTS: November soybeans turned around yet again, posting another new contract high of 10.88-1/2 and posting a new high close of 10.83-3/4. November soybeans were up 33-3/4 cents for the week. Harvest delays are expected to be reported in Monday’s Crop Progress report – snow/rains continuing to work their way across the central U.S. Plains & part of the Midwest interrupted harvest this week and likely will this weekend. However, long-term weather outlook is drier into the middle of next week. Soybeans continue to refuse to show a top. Exports are already near 1.7bb, challenging USDA’s total estimate of 2.2 bb, which continues to feed the notion that USDA is likely to lower the current 290 mb ending stocks estimate. Any thoughts this rally might be attributed to the weather in South America starts to lose gravity, as Brazil as a whole is expected to receive rain this weekend and next week, which should continue to improve crop condition and planting conditions. Argentina has also received rain this week in stressed areas, yet to put a damper on soybeans prices. Which highlights that this rally is much more dependent on demand versus weather. China continues to be the largest buyer of soybeans and largest driver of our prices right now. The question on everyone’s mind is “how” much more will China buy and “when?”
WHEAT HIGHLIGHTS: Dec Chi futures up 10 cents, closing at 6.32 3/4, and March up 8-3/4cents, closing at 6.32 1/2. Dec KC wheat up 9-1/2 cents, closing at 5.90- 3/4 and March up 8-1/2, closing at 5.76-3/4. Despite choppy wheat regarding price actions, Dec Chi wheat still gained 7-1/2 cents on the week and Dec KC wheat gained 11 cents. Prices rallied back up today since the rains that were expected appear to be less friendly than originally predicted. However, regardless of our weather, Russia continues to be the story for the bulls, and nothing there has changed nor expected to next week. Minimal rains are expected but not enough to change the situation in any way. In Argentina, the wheat harvest is just beginning yet the Buenos Aires Gain Exchange has rated 50% of the crop is rated poor to very poor due to lack of rain for the past couple months.
CATTLE HIGHLIGHTS: Live cattle markets were mixed on Friday in anticipation of the October Cattle on Feed Report, with October cattle up 0.025 to 103.350, and December cattle finished 0.100 higher to 103.575. For the week, December cattle lost 5.050. The USDA Cattle on Feed report Friday afternoon saw total cattle on feed as of Oct 1 at 1038% of last year, Placements at 105.9%, and Marketings at 106.2%. The report is overall heavy with a record number of cattle in feedlots, and placements above expectations. This indicates that packers will have plenty of supply in front of them, and with weights staying heavy, production should stay strong. Very likely this report will pressure prices early next week, but with the strong sell-off, are things priced in? Cash trade was quiet today, basically done earlier in the week. Most trade is at 106.00, down 2.00-3.00 from last week. Retail values still trended lower on the week overall, with choice carcasses closing at 207.49, down 1.37 on Friday. The load count has improved this week, showing that retailers may be value buying at these carcass levels. October feeders lost 0.300 to 133.525 November feeders dropped 0.775 to 129.650. The close under the 130.00 level in Nov feeders may open the door for additional long liquidation.
LEAN HOG HIGHLIGHTS: The lean hog market saw some recovery on Friday as December hogs were 0.800 higher to 67.025, and February hogs were 0.075 higher to 66.925. Difficult week for hogs as the December contracts lost 2.775, and Feb was down 4.025 in this week’s trade. Friday brought some short covering and profit taking off the week’s selling pressure. The market was supported by the USDA Cold Storage report from Thursday afternoon. Frozen pork supplies were up slightly from the previous month but down 22% from last year. Stocks of pork bellies were down 20% from last month and down 39 % from last year. The tighter pork supplies are reflective of the strong demand for US pork on the export front and for the retail consumer. The lean hog index softened .09 to 78.60. The index is still holding a premium to the December contract, which could limit additional selling pressure in the December contract. Retail values suffered on Friday afternoon, closing 5.59 lower to 93.25. This may carry over and add selling pressure to start next week.