Grain futures continued to trickle lower as the thought of a big crop getting bigger looms over the market. Is the bar set too high for next week’s USDA report?
Grain futures continued to drift lower in today’s trade with several contracts posting new lows or coming darn close. At the close December corn futures were 3 ¾ cents lower to settle at a closing low 397 and just two cents above the contract low of 395 last week. September soybeans below that psychologically significant $10 level, settling 11 3/4 cents lower to 993 ½. The new crop November contract settled 10 ½ cents lower to 1008 ¼. September Chicago wheat finished the day ¾ of a cent lower settling at 537 ½.
This morning’s weekly export sales report for corn showed net sales of 485k metric tons for old crop, that was up noticeably from last week and 32% from the prior 4-week average. New crop sales were reported at 249,100 metric tons. Old crop sales for soybeans were 325k metric tons, up 2% from the previous week and 66% from the prior 4-week average. New crop sales were strong at 985k metric tons.
All eyes will be on next week’s USDA report where we will get an updated look at production numbers for the US corn and soybean crops. The average corn yield estimate comes in at 182.1 bushels per acre, that compares to the previous estimate from the USDA of 181. The average soybean yield estimate is 52.6 bushels per acre, that would be 6/10ths of a bushel more than the previous estimate.
It was a sea of red in today’s livestock trade. At the close October live cattle were 1.25 lower to settle at 178.025, the lowest close since the middle of May. September feeder cattle futures settled 1.47 lower to 237.42, that was the lowest close since marking contract lows last December. On the snout side, it was lower too with October down 95 cents to settle at 73.62 while the deferreds saw greater losses.
This morning’s wholesale boxed beef report was weaker with choice cuts 1.59 lower to 312.26 and select cuts down .61 to 298.22. Yesterday’s 5-area average price for live steers was reported at 192.67. There were reports of some cattle trading in Texas this morning at 186. Yesterday’s daily slaughter came in at 122k head, that’s right in line with last week and last year. Week to date slaughter stands at 363k head
This morning’s weekly export sales report showed net sales of beef at 10,000 metric tons, this was down 43% from the previous week and 27% from the prior 4-week average. South Korea was the primary buyer accounting for 3900 metric tons followed by Japan and Mexico which counted for 1,900 and 1,200 metric tons respectively.
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Transcript: 42 off 31 Oliver Sloup is with blue line futures and Oliver I had a chance to read through some of your notes this morning. And you mentioned, first off, on soybeans, $10 break is inevitable. And you also said the bulls are going to try to defend that 395, to 396, on corn.
How are we going to do
it? That’s a good question. Right now, the core market is more or less a stick in the mud. It seems like yeah, we are weaker, and we’ve been marking lower highs, but the velocity of the selling is certainly cooled off. So if you’re looking for a silver lining, potentially, that’s it. But obviously, for your producer, you really want to see more than just a slow bleed lower right? You want to see some higher trade above some technical levels. And what’s going to do that? You know, I’m not really sure. Maybe we just have to wait until next week’s USDA report. We’ve started to take a look through some of the analysts expectations out there. We know the bar is set pretty darn high for some of these production numbers for corn and soybeans, which leads me to wonder, you know, is it is, are we kind of setting the bar too high where there’s room for disappointment? I don’t know to be determined, but you know, historically, the the USDA isn’t really quick to make any sudden adjustments either. So I think a lot of is this is going to be riding on next week’s report. Until then, we probably just chop around Oliver
again. So glad you mentioned that, because if you’re going to set the bar higher and USDA is going to miss, don’t you want that bar a little higher so that they’ll come in and give you at least something that appears to be bullish?
That’s exactly right. And if you look at the prior years, it’s really been the opposite of that, right? There’s been more concerns and more problem areas out there where the bar was set low, and it was easy to overcome those expectations, and that’s what put pressure on prices this time of year. Over the last couple of years, this year, it’s almost the exact opposite, the bar set really high, and rightfully so. I know there’s a lot of good looking crops out there, but will it be enough to live up to the expectations and how much that’s already priced in? I guess we’ll probably get a better idea that next week. Oh,
and with the bar set so high, what happens if USDA comes in above that we could have a mess on our hands next week? Well, it’s not quite a mess, but let’s look at the cattle market. We’ll also dig into hogs and touch on what’s happening in the energy markets. Oliver Sloup in Chicago back as market day report continues, 377, let’s bring back in Oliver Sloup, Blue Line futures and Oliver, you were there to see, you know, trading of oil at that level, right?
That was wild times. Certainly, it’s nice to see that we’re not doing that anymore. Knock on wood. But, yeah, you’ve mentioned oil trading higher. And I think it’s interesting to note that we’re also seeing some other safe haven assets catch a little bit of a bid. Gold and silver up sharply in today’s trade. And it kind of makes me wonder if there’s not some geopolitical risk being priced in ahead of the weekend, where nobody really wants to be caught short markets like that. If something were to happen over in the Middle East,
okay, when we kind of wrap things up for today again, not a whole lot going to happen in the cattle markets, other than what we could see in cash cattle trade, any chance will will Hold on and not give up some of the gains we’ve had over the past few months.
Oh boy. I mean the futures markets telling us that they’re and they’re expecting the cash market to soften up. The cash market’s been really resilient through a lot of ebbs and flows here as of late, but it feels like there might start to be some cracks on that, and when, when that plays out to be determined. But I’m still, you know, a little bit pessimistic, even after this big break that we’ve seen in futures here recently, as there continues to just be a lot of dark clouds looming over this market, from rumors of plant closures to the election concerns, potentially, you know, kicking up some dirt and the solar economy, those are all things that I think are going to keep, would be buyers at bay or manage money, aka funds kind of on the sidelines until we do find a little bit better value. And I’m not so sure that we’re at those prices yet, we saw what happened last fall when we took a nosedive lower. Thankfully, this year, funds aren’t aggressively long like they were. Last year, they were long, about 120,000 futures and options contracts. This year, about half that in the live cattle market, 60,000 contracts. So the risk of long liquidation isn’t what it was last fall, but the 60,000 contracts still is still a big position, and if we continue to get softer economic data again, the buyers probably aren’t going to be there and probably be more on the sell side, tightening up the risks.
Young packers can’t lose money. They they’re set up to where they can, can manage that side of it. Oliver, great to visit with you. Thanks again for stopping by. Oliver Sloup, Blue Line futures, and that’s kind of how we wrap things up today. Wrapping
up, of course, hi. I’m Oliver Sloup, vice president and co-founder of blue line futures, join me on my journey for this year’s Pro Farmer crop tour, August 19 to the 22nd I’ll be on the eastern leg, which starts in Ohio, goes through Indiana, Illinois into Iowa, and then up to Minnesota. I’ll be sending out my normal daily grain market commentary, as well as special updates from my findings on my route throughout each day. Sign up for these updates by filling out the form on this page, and we’ll send you one of the best looking koozies around. And I love corn koozie because who doesn’t love corn? Thank you, and I look forward to you joining me on my journey. You.