Top Farmer Closing Commentary 9-21-20

CORN HIGHLIGHTS: Corn futures finished with sharp losses of 5 to 8-3/4 cents. December led today’s drop, closing at 3.69-3/4. Selling pressure across most of the commodity complex was noted today. The stock market suffered sharp losses, and it is possible managed money moved to the sidelines today in case prices are topping. It is likely that traders moved stops just under the market. These orders were likely hit and triggered additional selling as prices declined. Export inspections at 29.7 million bushels were termed neutral, yet the year to date total is 74% ahead of last year at this same time. Inspections this year total 77 million bushels. Harvest will get underway in a more rapid fashion this week and the weeks ahead. So far, yield results have been mostly as for better than expected. Perhaps the key for final yield results lies mostly with the corn in Iowa that struggled with a freak windstorm as well as excess dryness. Is a near term top in place? That is difficult to say. Today’s trade activity was not necessarily alarming. It looks like a down day after several weeks of prices moving higher. No technical damage. Yet, the way prices traded throughout the session, continuing losing ground and then trying to gain it back only to lose ground again may have been suggestive of long liquidation.

SOYBEAN HIGHLIGHTS: Soybean futures finished with sharp losses, closing 11-1/2 lower in July to 21 cents lower in November. Export inspections at 48 million bushels were supportive. Year to date has 131 million bushels inspected, up 65% from last year at this same time. The most recent USDA report indicated yearly sales are forecasted at 2.125 billion bushels, up over 25% from last year. It will take a continued strong start to the export season to maintain a pace to meet USDA projections. Usually by late December or January sales turn to South America, away from the US. Futures in recent weeks have had a very steep upturn, and while today’s losses were discouraging for bulls, keep in mind it is how the market trades over the next several days that matter. There was not strong topping activity today. Yet, if you are not current with sales, get current now. If yield were to be better than expected, there is plenty of room for prices to drop. Don’t wait for this to happen. Harvest is here. Soybean meal and oil also suffered moderate to sharp losses.

WHEAT HIGHLIGHTS: Wheat gave back Friday’s gains and then some today, with Dec Chi futures down 20-1/4 cents closing at 5.54-3/4, and March losing 19-3/4 cents, closing at 5.63. KC wheat futures fell as well, with Dec KC wheat down 17 cents, closing at 4.87-1/4 and March down 16-3/4, closing at 4.98-1/4. On Friday wheat traded higher than it had in four months, and those gains were quickly erased throughout the trade today. USDA said this morning that 17.3 mb of wheat were inspected for export last week, putting total inspections up 8% from a year ago. Japan was the biggest buyer last week with China also in the mix. With fellow row crops down hard today, and fundamentally wheat being so bearish, it didn’t take much to push lower today. The dollar was also up all day, currently $93.54. We’ll see if the weather concerns resurface this week, as there are still global concerns for the Black Sea region and the Ukraine. Domestic weather concerns are still very much at play, with drought concerns and the belief it will spread and worsen as we move into the fall. Weather has been optimal for spring wheat harvest. USDA weekly Crop Progress report this afternoon reported spring wheat harvest at 96% versus 92% last week. Winter wheat planted is 20% versus 10% last week. Colorado is at 45%, Nebraska at 40%, Washington at 49%, but key state of Kansas is still at 14%, which is a little higher than the 5-year average of 12%.

CATTLE HIGHLIGHTS: Cattle markets closed lower on Monday with October lives down 0.650 to 106.700, December lives were down 1.250 to 110.600 and February lives lost 0.825 to 115.250. The feeder market was mixed with September feeders closing 0.200 higher to 141.075. Selling pressure came from weakness in the overall marketplace, as equity prices tumbled during the trading session on Monday. This caused a risk-off mentality in most markets and pressured live cattle prices. The weakness came as the base fundamental picture was improved. Weekly cash trade was undeveloped on Monday, but expectations are for firmer trade this week over last. At midday, choice beef values turned their streak of lower trade as prices rose 1.21 to 216.86. The cash market will need to see beef prices firm up to justify the strength. Concern to the market, will be demand. Product movement in term of volume will be as important as the price overall. December futures are holding a premium to cash markets and may be poised to pull some of that premium out. Feeders prices were overall softer, despite strong selloff in grains. Charts held support levels at key moving averages but are looking for a true short-term direction.

LEAN HOG HIGHLIGHTS: Hog futures finished mostly lower on Monday, with October down 0.900 to 65.600, December was down 1.975 to 61.550 and February was down 1.325 to 67.225. The CME Lean Hog Index was up 1.74 to 69.58, the highest level since May 15. Hog markets saw profit taking on Monday, and overall weakness across the livestock complex brought selling in the market. The strength in the Lean Hog index brought some support to the October contract. Midday carcass cutout values were up 3.09 to 90.62 with good strength noted in the ham and belly cuts. The demand side of the pork market has been key going into the fall. A news article over the weekend discussed the surge in Chinese domestic pork prices, and the need for supplies. With the recent discovery of ASF in Germany and the suspension of pork imports into China, the prospects of improve demand has supported the market. Prices have been choppy recently and consolidating off the most recent surge higher. On Monday, prices pushed to the bottom of the range, and could be susceptible if the technical break occurs to further selling, due to pressure from the outside market.

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