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Hogs: Afternoon Comments (Tuesday, September 19, 2017 20:13:15)

October lean hog futures settled 12 1/2 cents higher, while the December through May contracts gained 72 1/2 cents to $1.67 1/2. Traders further narrowed the spread between nearby lean hog futures and the cash index today. October hogs ended the day only $1.75 1/2 below where the cash index will be quoted tomorrow (for Sept. 18), while the December contract will now hold only a $2.15 1/2 discount. With recent price action significantly tightening the cash/futures spread, these two contracts should now more closely follow day-to-day price action in the cash market.

With slaughter numbers building seasonally and running above year-ago (by 27,000 head, or 3.1%, so far this week), the cash hog market is likely to remain under pressure, despite extremely strong packer margins. The national average direct cash hog bid declined another 89 cents this morning.


Soybeans: Afternoon Comments (Tuesday, September 19, 2017 20:15:33)

After two-sided price action overnight, soybeans faced pressure during daytime trade and finished around 1 to 2 cents lower, though that was well off session lows. The string of daily sales announcements ended today and soybeans faced price pressure, as a result. With harvest activity picking up, fresh export demand news will be needed on a near-daily basis to provide support. Otherwise, buyers will be scarce, like today. But the recovery well off session lows into the close signals traders aren't overly eager to sell the market, either.

Forecasts calling for improved weather in Brazil and Argentina also weighed on soybeans today. Central Brazil has been too hot and dry, while far southern Brazil and Argentine have been too wet. Forecasts for the end of September and the first half of October suggest a potential trend change, with central Brazil expected to see rains, while far southern Brazil and Argentina are likely to see drier weather.


Corn: Afternoon Comments (Tuesday, September 19, 2017 20:14:36)

Buying interest in the corn market dried up during the day trading session and the market settled around 3 cents lower for the day. Corn futures continued their gradual retracement of the short-lived bounce off the Aug. 31 low. Buying interest is likely to remain limited in the market with harvest picking up across the Corn Belt. The coming supply influx has also weighed on basis levels around the Midwest this week.

And for now, crop concerns are limited. USDA made no change to its "good" to "excellent" rating for the crop yesterday, and while its maturity is lagging the norm by quite a bit, a season-ending frost/freeze event is not on the horizon.




Wheat: Afternoon Comments (Tuesday, September 19, 2017 20:16:05)

Winter wheat futures improved into the close to favor a firmer tone in narrowly mixed trade, while HRS futures closed around 3 to 4 cents lower. Winter wheat futures were weaker through morning trade, but firmed into the close on help from a weaker U.S. dollar and short-covering. Buying into the close was limited after Stats Canada said its model-based survey reflects a wheat crop of 27.1 MMT, which is up 600,000 MT from its August estimate. This reminded that global supplies are ample.

Traders are also keeping an eye on the weather in the Plains as producers seed the winter wheat crop. More rains are needed to alleviate dryness in Kansas, especially given warm temps.

Traders had little reaction to news that Egypt purchased 175,000 MT of Russian wheat. It only received six offers from suppliers, which is about half the normal amount due to trade uncertainty after Egypt held up two shipments of wheat from Romania and France because they contained poppy seeds.




Cotton: Afternoon Comments (Tuesday, September 19, 2017 20:16:45)

Cotton futures ended mid- to low-range with losses of 23 to 54 points. Cotton futures saw two-sided trade, but slipped into the close on a lack of bullish news. Some early support came from yesterday's crop condition ratings from USDA, as it lowered the amount of crop rated "good" to "excellent" by two points from last week. But ratings remain well above year-ago levels, which limits concerns about the crop.

Traders also anticipate hedge-pressure building over the near-term as harvest ramps up. As of Sunday, 11% of the crop was harvested, which is five points ahead of the five-year average.



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