Key Takeaways
- • December corn fell 18 cents on the week and sits nearly 70 cents off its contract high after USDA's October Crop Production report raised the US corn yield to 181.2 bpa, up 2.7 bpa, and lifted production 234 mbu to 16.034 bbu.
- • USDA raised new-crop corn stocks by 282 mbu to 1.849 bbu, and managed money cut its net long in corn futures and options by 60,491 contracts to 377,850 as of October 6.
- • Cattle prices broke out, with December live cattle up $6.12 on the week and cash trade reported at $220 in the North, while managed money trimmed its live cattle net long by 384 contracts to 50,920.
- • Lean hog prices extended their decline, with December down $2.82 and the CME Lean Hog Index at $78.41, while managed money's net short in lean hogs reached a record 35,272 contracts after a reduction of 8,914 contracts.
- • Soybean yield was raised to 53.1 bpa, adding 27 mbu to production at 4.562 bbu, and cotton yield rose 14 lbs/ac to 790 lbs, with US cotton ending stocks up 200,000 bales to 3.8 million.
Summary
Corn futures sold off sharply on Friday after USDA's monthly Crop Production report surprised the market with a yield increase. The agency put the US corn yield at 181.2 bushels per acre, up 2.7 bpa from September, lifting production 234 million bushels to 16.034 billion bushels. New-crop stocks were raised 282 million bushels to 1.849 billion. Brugler Marketing & Management reports that December corn is nearly 70 cents below its contract high and fell 18 cents on the week. Weekly data showed the corn harvest 23% complete as of October 4, four points behind average, with condition ratings down 3% to 54% good/excellent. Managed money cut its net long in corn futures and options by 60,491 contracts to 377,850 as of October 6.
Wheat futures were mixed to lower. CBT soft red winter futures fell 12 cents and KC hard red winter futures slipped 16 cents in the December contract, while HRS futures were down 2.75 cents. USDA's WASDE raised US wheat stocks 23 million bushels to 740 million and trimmed world stocks by 0.25 MMT to 276.04 MMT. Winter wheat planting stood at 36% complete, 10 points behind last year. Managed money added 7,873 contracts to its net short in CBT wheat, reaching 29,543, while speculators in KC wheat reduced their net long by 6,670 contracts to 24,040.
Soybeans held up, with November gaining 13.75 cents. USDA raised the soybean yield 0.3 bpa to 53.1 and production 27 million bushels to 4.562 billion, while ending stocks rose 5 million bushels to 315 million. Export buying remained light, with 104,000 MT sold in daily announcements and weekly bookings of 549,377 MT. Managed money added 10,496 contracts to its soybean net long, to 251,660. Cotton December futures gained 166 points. USDA raised cotton yield to 790 lbs per acre and production to 13.44 million bales, and speculators trimmed their net long by 10,756 contracts to 63,837.
In livestock, December cattle rose $6.12 on the week, largely on Friday, with USDA reporting cash trade at $220 in the North and Fed Cattle Exchange sales at $223-227. The CME Feeder Cattle Index rose to $337.07. Choice boxed beef fell 84 cents to $373.35, while Select fell 19 cents to $354.30. Weekly beef production was down 3.1% week over week and 3.4% year over year. Hogs weakened further, with December down $2.82 and the CME Lean Hog Index at $78.41, while the pork cutout fell $3.98 to $80.50/cwt. Managed money's net short in lean hogs reached a record 35,272 contracts.
The coming week includes a federal holiday on Columbus Day, with markets open. The Export Inspections report moves to Tuesday, CPI data and October lean hog and soybean meal and oil expirations fall on Wednesday, and the EIA report, PPI data and NOPA crush data are due Thursday. The Export Sales report moves to Friday. Brugler's technical view is that December corn is near key support, with the 200-day moving average at $4.79 1/4 and the 61.8% Fibonacci retracement at $4.73 under watch. Stochastics are oversold, which may offer some hope for bulls, but the analyst notes that more fuel is needed to retest $5.
Wheat futures were mixed to lower. CBT soft red winter futures fell 12 cents and KC hard red winter futures slipped 16 cents in the December contract, while HRS futures were down 2.75 cents. USDA's WASDE raised US wheat stocks 23 million bushels to 740 million and trimmed world stocks by 0.25 MMT to 276.04 MMT. Winter wheat planting stood at 36% complete, 10 points behind last year. Managed money added 7,873 contracts to its net short in CBT wheat, reaching 29,543, while speculators in KC wheat reduced their net long by 6,670 contracts to 24,040.
Soybeans held up, with November gaining 13.75 cents. USDA raised the soybean yield 0.3 bpa to 53.1 and production 27 million bushels to 4.562 billion, while ending stocks rose 5 million bushels to 315 million. Export buying remained light, with 104,000 MT sold in daily announcements and weekly bookings of 549,377 MT. Managed money added 10,496 contracts to its soybean net long, to 251,660. Cotton December futures gained 166 points. USDA raised cotton yield to 790 lbs per acre and production to 13.44 million bales, and speculators trimmed their net long by 10,756 contracts to 63,837.
In livestock, December cattle rose $6.12 on the week, largely on Friday, with USDA reporting cash trade at $220 in the North and Fed Cattle Exchange sales at $223-227. The CME Feeder Cattle Index rose to $337.07. Choice boxed beef fell 84 cents to $373.35, while Select fell 19 cents to $354.30. Weekly beef production was down 3.1% week over week and 3.4% year over year. Hogs weakened further, with December down $2.82 and the CME Lean Hog Index at $78.41, while the pork cutout fell $3.98 to $80.50/cwt. Managed money's net short in lean hogs reached a record 35,272 contracts.
The coming week includes a federal holiday on Columbus Day, with markets open. The Export Inspections report moves to Tuesday, CPI data and October lean hog and soybean meal and oil expirations fall on Wednesday, and the EIA report, PPI data and NOPA crush data are due Thursday. The Export Sales report moves to Friday. Brugler's technical view is that December corn is near key support, with the 200-day moving average at $4.79 1/4 and the 61.8% Fibonacci retracement at $4.73 under watch. Stochastics are oversold, which may offer some hope for bulls, but the analyst notes that more fuel is needed to retest $5.
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