CORN HIGHLIGHTS: Corn futures traded in negative territory most of the day. Sep corn settled 1 cent down to 3.64-1/4, while Dec was down 1 to 3.78-3/4. For the week, Sep corn futures gained 6-1/2 cents, while Dec posted a 7-cent gain. For the majority of the trading session, corn futures saw spillover pressure from beans, as corn futures stayed in a choppy consolidation phase. With projections of larger yield and overall favorable weather forecasts for finishing this year's crop, sellers stayed active in both corn and bean markets the majority of the trading session. A late afternoon headline of Chinese and US negotiators planning to end the trade impasses by November, as well as an announcement by the Mexican Economy Minister expecting a US trade deal by the middle of next week quickly sent sellers to the sidelines as the market rallied toward the close of the day. Overall, long term fundamentals stay supportive with the tightening global supply picture for corn, as strong US demand continues for the remainder of this year's supplies.
SOYBEAN HIGHLIGHTS: Soybean futures finished 4-5 cents lower with front month Sep beans down 4 to 8.81-1/2, while Nov beans lost 4-1/4 to 8.92-3/4. For the week, Sep bean futures posted a strong 30-3/4 cent gain, while Nov beans gained 31 cents, finishing near the high end of this week's trading session. For the majority of the day, bean futures saw double-digit losses as weather forecasts and rain across the Grain Belt in IL and IN were supportive of this year's bean crop, finishing and possibly growing off of last Friday's USDA 51.5 bushel per acre average. Despite yesterday's positive trade news, traders in the first half of the day traded the fundamental picture versus headlines. Late in the day, with an announcement off a Wall Street Journal headline that US and Chinese negotiators were building a path to resolve the trade dispute by November caused beans to rally in the final minutes of today's trade off its lows. The next few trading sessions will be key in determining short term direction, but trade news in resolving any disputes or a path toward that will bring sellers to the sidelines.
WHEAT HIGHLIGHTS: Wheat prices were the strength of grain markets today, as contracts posted strong finishes. Chi Sep was up 18-1/4 cents to 5.60-1/2, while Dec was up 17-3/4 to 5.79-3/4. That strength persisted through other contracts, as Sep KC HRW wheat futures were up 17-1/2 cents to 5.65, while Sep spring wheat was up 12-1/4 cents to 6.08-1/2. For the week, Chi Sep gained 13-3/4, while Sep KC HRW was up 5-1/4 cents. Wheat trade began with headlines of Russia having an upper limit on exports this year near the 30 million metric ton level. Nothing is confirmed or defined overall, but this is the second time a rumor of tightening long term Russian wheat exports has been posted into the market. With global wheat production tightening, foreign wheat markets saw additional support in overnight trade, and the prospects of US wheat exports improving helped provide underlying support in the market. US wheat exports saw a jump to over 800,000 metric tons. Last week's export sales numbers were above expectations and nearly 500,000 over the prior week. This may be the beginning in potential improvement in US wheat export sales and shipments given the forecasted tighter global supply picture. One week does not make a trend, and for prices to move higher, demand will need to step up for US wheat.
CATTLE HIGHLIGHTS: Cattle futures closed with triple digit gains after choppy trade for most of the session without much direction. In live cattle, Aug closed 1.10 higher to 109.42, Oct closed 1.60 higher to 110.87, and Dec closed 1.42 higher to 114.62. Feeders were up as well, with Aug up 67 cents to 150.95 and Sep up 1.70 to 151.82. Cash trade late in today's session was a major supportive force with published trade as high as 110 to 111, steady with last week and up from 109.50 earlier this week. Yesterday afternoon, choice cuts closed 85 cents lower to 209.10 but gained 2.20 this morning to 211.30. Average dressed weights increased by six pounds last week, a bearish supply factor. However, an increasingly positive sentiment about trade negotiations is increasing expectations for beef exports. On the technical front, today's session was impressive, especially as the live cattle contracts were able to push through their 200-day moving average levels. Feeder cattle appeared to have solidified their breakout to the upside of their recent consolidation, leaving upside targets at the right shoulder on the current head-and-shoulders formations.
LEAN HOG HIGHLIGHTS: Hog futures put in a second straight day of gap-higher trade and sharply higher closes. The nearby Oct contract closed 3.12 higher to 58.60, Dec closed 2.82 higher to 55.27, and Feb closed 2.30 higher to 61.65. The CME lean hog index was down 1.02 to 54.21. Optimism about trade talks with Mexico and China are responsible for much of the turnaround this week, as the US normally ships a massive amount of pork to both Mexico and China. Some whispers about African swine fever in China are also supportive, but information is still limited on that front. Carcass cutout values were down 86 cents yesterday afternoon, their lowest value since 4/13. For the Oct and Dec contracts today, this session was the second gap higher in a row. The Oct contract closed above its 50-day moving average for the first time since 6/18, and the Dec contract came within 40 cents of its 100-day moving average, its closest since March. As of last Tuesday, fund traders held the largest ever short position, so as positive headlines start to break, those holding short positions are being squeezed out of the market.