US Agriculture Comments; Grains close lower Thursday

The Soybean market collapsed Thursday, easily erasing Wednesday’s gains. Corn and Wheat were also lower, though Wheat held relatively firm compared to the other grains. The USD index posted a solid rally before falling back a bit late in the day. Outside commodities were mixed.

Wheat futures saw a choppy day of trade but in the end gave way to spillover from sharp losses in Soybeans. Periods of price strength came from concerns about tightening global supplies, as weather conditions are less than ideal in Australia and the US Plains and there are reports of disappointing yields in areas of Europe and tightening supplies in the Black Sea region.

Corn futures faced pressure the majority of the trading session, but the market did move well off its lows into the close. December through July futures settled 7 to 10.5 cents lower, while far deferred months ended in a narrowly mixed range. Traders took advantage of yesterday’s gains and today’s sharply higher USD index by booking profits. Also encouraging this were pitiful weekly export sales of 69,900 metric tons (MT), which reminded traders that demand destruction has occurred.

Soybean futures sharply extended losses around midday and posted a low-range finish to end 30- to 50 + cents lower, with nearbys leading losses. Soymeal and Soyoil saw spillover pressure. Disappointing Chinese and Eurozone manufacturing data, as well as a disappointing initial jobless claims report from the US weighed on outside markets, which propelled selling in the commodity world today.

Lean Hog futures ended mixed, closing 52.5 cents lower to 52.5cents higher. Upside potential in the hog pit was limited by negative outside markets and concerns tightening packer profit margins will reduce demand for cash Hogs. But the cash hog market was steady to $2 higher Thursday, with packers in need of supplies to fill this week’s large kill requirements.

Live Cattle futures faced pressure throughout the day and selling mounted into the close. Futures ended with losses of 30 to 95 cents. Recent pressure on futures encouraged a few feedlots in Texas and Kansas to move Cattle at $126, which is steady to lower compared to trade last week in these states.

 

Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.

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