Market Update 9/14/2020

Monday September 14, 2020

US$ was up .60 at 93.31 Not the worst thing



Corn futures gained 10 cents last week and last night made another high for the move at 371 on the December market.  This could prove to be near term resistance so watch the closing value today.  Now for the USDA report filed Friday.  The biggest thing that stuck out to me is that the yield was reduced fairly significant and says to me this crop is done getting bigger and could very well be headed in the other direction. Another point to note is that the supply number at 2.5 billion bushels is ample and we really need demand to stay strong in a big way.  I think that traders are saying the report is dated September 1 and today is September 11 and the crop did not get bigger in those 10 days.  But it doesn’t matter what I think.  Therefore, funds have moved from a short position to a pretty aggressive long position.  Because of the big supply number continue looking for price protection with some upside potential. Acres continue to be a question mark.


November soybean futures gained 27 cents last week.  That is a good thing as technically the trade above 995 was pretty positive.  Last night we gained another 12 cents but gave back half of that this morning.  Several factors have swung positive since the big wind in Iowa.  First on the list would be continued huge export sales reported to China and destinations unknown.  Secondly the USDA supply number reported Friday at 460 million bushels came in slightly below the average estimate.  So it appears we have seen our largest production numbers with a yield of just under 52 bushels per acre after being estimated over 54 earlier. Having said all of that the 1010-1050 November futures needs attention as a producer.


October live cattle futures gained 107 last week with the cash trade struggling at 101 early and 102 late in the week.  Interestingly the report is that the cash trade was equal in all regions.  That may be an indication that overweight cattle are being cleaned up which is certainly a positive.  With the futures trade up 150 this morning you would think that the cash trade had been 2-3 dollars higher.  Perhaps that is on the way.  I continue to be impressed with the volume of boxed beef movement which of course relates back to the catch up in slaughter.  Of course the other problem is that the futures can be up 150 early and close lower for the day.  I think that there is a lack of confidence in the system.  Be careful. 

Any statements of fact herein contained are derived from sources believed to be reliable, but do not purport to be complete.  No responsibility is assumed with respect to any such statement, nor with respect to any expression of opinion herein contained.  Futures trading is speculative and a substantial risk of loss exists.  The prices above may reflect those of the relevant spot contract.  Movement in the spot contract does not necessarily correlate to the movement of individual option premiums.  Past performances not necessarily indicative of future results.

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