***** Corn futures ended Monday 6 cents lower, soybean 6-7 cents lower, with Chicago wheat 13-14 lower. *****
# Weather and Chinese news tended to dampen the grain markets to start the week. Wheat prices were the downside leader, with recent rains expected to boost the condition of our new crop in the S. Plains.
# Over the weekend, Chinese economic data continued to show the rate of growth in that economy is slowing, a feature that helps keep the commodity sector in general on the defensive.
# Export inspections were good for soybeans, but again somewhat disappointing for wheat and corn, especially the former that had shown some improvement in recent weeks. The weekly numbers were: 94.1 mln. bu. soybeans, 6.3 mln. bu. wheat, and 18.8 mln. bu. corn.
# The trade looked for the condition rating for wheat to improve to 49% good/excellent for wheat on Monday’s report, and that’s what the USDA projected. Corn and soybean harvest, 85% and 92% respectively, were close to expectations. Winter wheat planting is 88% done, with the recent rains likely to push it to conclusion.
# USDA reported the Sept. corn grind was 427.5 mln. bu., down from August’s 446.9 mln. bu. pace, but on par with the weekly grind numbers. They also reported the Sept. crush was 148.4 mln. bu., consistent with the NOPA number reported in mid-October.
# The latest weather forecasts indicate the Black Sea area should continue to have relatively dry conditions, potentially undermining the 2016 crops from that area. Temps will be warm, which should improve growth a little before dormancy. Australia had some weekend showers, with temps moderating from the recent extreme heat. Still, with harvest starting, rains would not have much impact on production potential. The latest forecasts do include some showers for the center/west area of Brazil, but it’s still far from indicting the rainy season is starting. Southern areas remain good.
# As we implied earlier, Chinese slippage worked against the commodity sector to start the week. Traders did note the Dow Jones Industrials ended the day in positive territory for the year. That follows the strong performance noted for October.
***** Live cattle futures settle $0.22 higher to $.30 lower; feeder cattle $0.75 higher to $0.32 lower, and lean hogs $.80 lower to $0.25 higher. *****
# Cattle futures were more narrowly mixed, with the lack of direction in the wholesale market diminishing selling interest. Cash trading was light to start the week, but prices are still at a discount to futures.
# Lean hog futures have been hit by declining live and wholesale prices, along with speculative liquidation. Monday’s action may bring a temporary end, especially with wholesale prices ending $1.36 higher. With good packer margins prevailing, there’s a feeling that could bring a temporary lift to the live market. Futures have a big discount to the cash index, which could spark some short covering if cash prices strengthen.
# Both red meats are sensitive to the usual seasonal turn to turkey, dampening the wholesale markets for the red meats over the next couple of weeks.
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