Market Update 9/8/2020

Tuesday September 8, 2020

US$ up .33 at 92.71 Now over 93.00 this morning



Corn futures gained 1 cent last week after putting in an impressive Sunday night trade, but as many times happen the exuberance faded for the rest of the week.  I am thinking that the crop conditions reports do not carry the market at this time due to the maturity of the crop.  We will see another one this afternoon so, prove me wrong.  There were more export sales reported to China last week with another one this morning which are critical to market support.  Friday’s report his week will come out at 730 am and then the USDA numbers will be released at 1100 am.  Yes, yield and production coming down leads to less supply, but the average estimate for the supplies at near 2.5 billion bushels is way too much to sustain a lot higher prices.  I am talking about new highs being difficult to find.  Therefore, consider March sales on any kind of a bounce.  


Soybean futures gained 18 cents last week and again shot up 9 cents overnight before failing back to steady.  The good part is that last week’s high was taken out which would be considered technically positive if those gains do not crash this week.  Export sale reports consider to be positive and now for the USDA numbers.  The estimate for supplies is probably considered price positive at just under 470 million bushels.  The thing it appears that we can count on is continued volatility.  Now that is not a bad thing, but it has been pointed out several times that if you want to make a sale have standing orders in place because the price can come and go in a hurry.  Last but not least we still have two more nights of somewhat threatening frost. Typically, a frost does not cover a wide enough area to be a sustaining factor, however, with everything else that is going on it would certainly garner attention.   


Cash cattle trade is reported from 102 in the south to 105 in Iowa and west.  Certainly, this is in no way positive.  The live cattle futures gained 45 cents with the October contract landing at 104.45 with follow through buying taking the trade to 105.75 well over a dollar higher.  Success! Should the futures close here we will be looking at new resistance levels tomorrow as 105.50 was the number to get over today.  The point has been made that slaughter numbers continue to improve with export and domestic business holding up extremely well.  Also, why wouldn’t Mr. Packer want to harvest as many head as possible with the huge margin that he is enjoying.  A couple of other key factors are that unemployment needs to keep declining and coronavirus really needs to be vaccinated for ASAP.  Will a presidential election fix any of that? 

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, or 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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