|Hogs: Afternoon Comments (Thursday, June 30, 2016 21:15:41)
Hog futures closed fractionally mixed amid bull spread unwinding. Hog futures were on the defensive the bulk of today due to weaker cash and wholesale prices. Packer demand was limited today due to reduced needs because of July 4 holiday closings on Monday. Wholesale prices were lower, as well, with the morning pork cutout down $1.37 on average movement of 158.64 loads. But spillover strength from the cattle market helped to trim losses near the close. Slaughter today is estimated at 427,000 head, up 2,000 head from a week ago and up 6,000 head a year ago. Week-to-date slaughter is up 11,000 head versus a week earlier and up 7,000 head from year-ago.
|Soybeans: Afternoon Comments (Thursday, June 30, 2016 21:11:35)
Soybean futures posted strong gains, finishing 28 1/2 to 40 3/4 cents higher through the May 2017 contract, with November leading gains. Soybean futures exploded higher following the release of USDA's acreage report, which showed plantings slightly lower than expected. The market had shown firmness earlier on positive export news coming from the weekly export sales report. That report showed sales of 730,000 MT for 2015-16 and 798,000 MT for 2016-17, which were at the top end of expectations. Additionally, export commitments improved by one percentage point from last week and are now running even with year-ago, which is above the pace needed to reach USDA's export forecast. But it was the cut in planted acreage that ignited the rally, even though it came in only 146,000 acres under expectations and is still a record. The Grain Stocks Report did not work in bulls' favor, as USDA indicated 41 million bu. more soybeans on hand than expected at 870 million bushels.
|Corn: Afternoon Comments (Thursday, June 30, 2016 21:04:10)
After trading slightly higher in overnight trade, futures softened during daytime trade and sharply extended losses in reaction to USDA's data. Futures ended midrange, but still posted sharp losses of 8 1/4 to 14 cents through the July 2017 contract. Futures tumbled in reaction to USDA's higher-than-expected planted acreage peg of 94.148 million acres, which was 1.252 million above the average trade guess and 547,000 acres above March intentions. Adding pressure were rains moving across some of the drier areas of the Corn Belt this morning. This morning's Grain Stocks data added to the negative tone, with stocks of 4.722 billion bu. coming in 194 million bu. above traders' expectations, suggesting demand wasn't as impressive as traders expected over the last quarter.
The December corn/November soybean spread widened by 51 1/2 cents today, which could easily be viewed as overdone tomorrow. This could either be supportive for corn or trigger profit-taking in soybeans -- or a little of both.
|Wheat: Afternoon Comments (Thursday, June 30, 2016 21:12:30)
Wheat futures enjoyed modest gains for much of the overnight and day trading session. SRW wheat futures settled narrowly mixed, but HRW and HRS wheat both edged out slight gains for the day. Wheat futures enjoyed some corrective short-covering overnight on ideas the downside has been overdone of late. Indeed, the nine-day Relative Strength Index still shows most contracts are technically oversold. Light support also stemmed from a stronger-than-expected showing in the weekly export sales report.
While USDA's wheat planted acreage data today came in on the bearish side of expectations, a limited reaction on the part of the market signals the lofty figures were already factored into prices. But with harvest of a large winter wheat crop underway, upside potential remains limited to corrective short-covering.
|Cotton: Afternoon Comments (Thursday, June 30, 2016 21:13:42)
Cotton futures slumped in response to USDA's acreage data today and ended low-range with losses of 139 to 168 points for the day. USDA's cotton acreage data clearly favored market bears, sending the market down sharply after a firmer start. Futures posted bearish reversals for the day, signaling follow through selling is likely at week's end. Farmers increased cotton plantings by 431,000 acres from March intentions to 10.023 million acres, according to USDA. This was in stark contrast with expectations for a slight decrease in acreage due to soggy spring weather in Texas. This planted acreage figure represents a 16.8% increase in acreage from last year's low level. This overshadowed another decent showing in today's weekly export sales report. While sales of 58,700 RB for 2015-16 were down 66% from the week prior, strong shipments of 138,300 RB for 2016-17 resulted in a solid tally overall.Early support also stemmed from the latest Drought Monitor. While Texas is basically free of drought, 48% of the the No. 2 producing state of Georgia is dealing with some form of drought.