Category: Ag Markets Update

FOR FRIDAY (9/9) Grains continued to short-cover before USDA report and are setting up a sale, as even a surprise report would lead to sell the overbought condition going into Sept. hedges. Continue to use strength to get rid of cash and hedge, as this market could quickly fall apart and now is getting a bit oversold. Hogs are holding up well and look up Monday so we’ll exit on Friday and cattle still look to be in trouble.

FOR THURSDAY (9/8) Storms are moving across the Midwest this week with flash flood warnings posted for parts of Iowa and Illinois today and for Kansas, Missouri and Illinois on Thursday and Friday. The 6- to 10-day outlook (Sept 12-16) favors normal to above-normal rains for much of the Midwest with below-normal temperatures for western two-thirds of the country. As we move into Friday, we do expect more pressure to the downside unless trade is afraid of too much rain in the Midwest, and that seems unlikely. Meats had a strong recovery day as we expected. We do expect them to move lower on Thursday and Friday as deflationary cycle is due to hit.

FOR WEDNESDAY (9/7) Storms moved through Iowa and eastern Nebraska later on Tuesday, with local forecasts in Iowa calling for 2 to 3 inches of rain overnight. The 6- to 10-day outlook (Sept 11-15) favors normal to above-normal rains for the Midwest with below-normal temperatures for Iowa and normal to above-normal heat for Illinois and east. Progress reports were bearish and market now a bit overbought and at key pattern completions. As we move into Friday, we do expect more pressure to the downside and it probably will start Wednesday unless trade is afraid of too much rain in the Midwest, and that seems unlikely.

FOR TUESDAY (9/6) Grains continue their rebounds and may hold up into Monday night. Weather forecasts remain favorable for corn and soybeans with drier weather in the Midwest the next few days. Hot, wet conditions are forecast there next week. Tropical storm Hermine is moving across northern Florida and is expected to track north along the Eastern Seaboard and bring heavy rain to the Carolinas. Ample global wheat supplies have kept pressure on prices. Forecasts keep rain in the central Plains next week, which should help the winter wheat that will be planted this fall.

Trade could congest into the Sept 12 crop report but so often final harvest pressure hits it thereafter. We are bearish most of next week. Hogs may hold up if Carolina rains inhibit marketings and that state and Iowa  contain 43.1% of the United States hog inventory. Cattle needs to bounce a few days and hit key support.

FOR FRIDAY: (9/2) Corn managed its bounce rather quickly and may set up a decent sale.  Cotton is more threatened by the hurricane over the weekend but funds needed some reason to take profits. Weather forecasts remain favorable for corn and soybeans with drier weather in the Midwest the next few days. Hot, wet conditions are forecast next week there. The tropical storms currently moving across Florida will bring rain to much of the east coast in the next few days. Grains do reopen on Monday night at 7 pm after the Labor Day holiday but meats of course won’t reopen until Tuesday morning.  Fortucast will publish reports on late Monday afternoon for the reopen on Monday night.

FOR THURSDAY: (9/1) Grains aren’t bouncing and seem lower next week also. Need a 2-day bounce to get short for next week. Grains do reopen on Monday night at 7 pm after the Labor Day holiday but meats of course won’t reopen until Tuesday morning. Weather forecasts remain favorable for corn and soybeans with showers moving across the Midwest this week. Hot conditions arrive next week along with rain across the western portion of the belt. The tropical storm in the Gulf of Mexico is expected to track northeast across Florida and southern Georgia rand away from crop areas in the Delta. Export sales are positive but no one cares. Hogs look lower on Thursday but did not rally enough for a good risk/reward and cattle are back to being normal after being overdone so quickly.

FOR WEDNESDAY: (8/31) Grains didn’t turn up yet but are still in a place for a short-covering rally although at this point it will not mean much. Weather forecasts remain favorable for corn and soybeans, with showers moving across the Midwest this week. Hot conditions arrive next week along with rain across the western portion of the belt. The tropical storm in the Gulf of Mexico is expected to track north along Florida and remain clear of crop areas in the Delta. Cattle finally reversed and should be up a few days now until Friday and hogs continue to hold up and could be up one more day but can be sold on Thursday into Friday in case they come off strongly.

FOR TUESDAY: (8/30) Grains are due to turn up on Tuesday from overnight lows. Buying is countertrend but something to do if you’re looking to play that way. Hogs still look higher for a few more days and cattle lower at least one more day. Weather forecasts remain favorable for corn and soybeans with showers moving across the Midwest this week. Hot conditions arrive next week along with rain across the western portion of the belt. The tropical storm in the Gulf of Mexico is expected to track north along Florida and remain clear of crop areas in the Delta.

FOR MONDAY: (8/29) Weather forecasts remain favorable for corn and soybeans with wet conditions this week in the Midwest and hot conditions next week with some rain. The National Hurricane Center says there is a less than 40% chance that a storm building in the Caribbean will reach Louisiana. There had been talk earlier in the week such storm could disrupt corn harvest and impede river traffic there. Grain cycles look lower one more day but should short-cover into Friday and we don’t know on what news.

Do we have to jump on rallies into Friday for new hedging and cash sales? Probably. Might get away with waiting on the USDA report but we will know more next week. Cattle are in big trouble now and still could be lower 1-2 more days before a bounce. Seasonals are against feeders in Sept. but turn up for hogs and we are out of hog hedges and spec. sales.

FOR FRIDAY: (8/26) Soybeans headed south in a big way on Thursday after crop scouts inspecting Midwest fields found big pod counts in Illinois that led to speculation actual production may exceed USDA’s current forecast. Corn and wheat futures also closed lower, with corn moving down with soybeans. Losses in corn were kept in check by today’s big new-crop export sales and by the tour estimating Illinois yields under USDA latest 200 bpa forecast.

Weather forecasts remain favorable for corn and soybeans with wet conditions this week in the Midwest. Next week is expected to be hot and wet. Attention is on a possible hurricane developing the U.S. Gulf that could move into the Mississippi River delta and disrupt corn harvest there. Forecasters should have a better idea of the storm’s development and path in the next day or so. Need something like that to create another move up into early September to allow more hedging and cash selling before harvest pressure hits.

Time to take profits on short hogs. Cattle need a 2-3 day bounce for us to have any risk/reward to be selling.