A busy weekend has thrown bullish investors and traders into a tailspin on Monday. In the US another round of stimulus may be on hold as the death of a Supreme Court Justice and their potential replacement weighs heavy on Congress and the President. Across the pond there are reports that some of the largest banks in Europe and Britain including HSBC, Barclays and Deutsche have been moving large sums of money to offshore accounts without officially knowing the account holder. The suspicious activity reports say that the banks have moved close to $2 trillion over the last 20 years. The whole situation seems to be a financial grey area, but could be considered money laundering. The Banks are firing back saying at the time of the transactions regulations allowed the activity. All of this is sending traders to short positions on the equity and Euro. The US Dollar seems to be a safe haven rising over 0.7%.
A rising dollar has also put commodities on the run. WTI crude oil futures are down as much as 3.32%. RBOB unleaded gas is down over 4%.
In the grains temporary tops may be in for the short term. A rising dollar and strong harvest getting underway are definitely putting a little whoa in the bulls. Export sales though continue to be strong. On Monday the USDA announced sales of 171,000 MT of soybeans to unknown destinations, 132,000 MT of soybeans to China and 132,000 MT of soybeans to Pakistan. Mark Gold though alluded to a report out late last week that shows China has actually been reselling some of the soybeans they purchased from the US to Brazil. This could show that some of China’s recent purchases are more about currency and demand rates elsewhere in the world. Also looking at the latest sales the US has already sold about 10 MMT of corn to China with the total quota for the 20/21 marketing year at about 15 million. This doesn’t leave much for the next 11 months of the current marketing year. Finally the net long position by managed money is approaching multi year highs in soybeans. This could signal that managed money is about ready to take profit and pull back from the grain complex that has had nearly a month of higher prices.
However there can always be more bullish action. Harvest is underway and if Iowa comes in worse than expected or if other states start to report poor yields the bulls will be back. We will also be getting a stocks report out from USDA. If that were to somehow show slim US stocks bulls will be back in the market.
In livestock the Monday trade is opening mostly lower. Of course a sharp selloff in the outside equity markets could be putting some pressure on cattle. Tomorrow the latest cold storage numbers will be released and that could help paint a current demand picture for where meat it moving. For both hogs and cattle cash was higher last week. This could help keep trader confidence high and erase any early week losses later in the week.
In the country last week cash trade started up on Wednesday in the South, with a full range of $103 to $105, mostly $103 to $103.50. That is generally $2 higher than the prior week’s weighted averages. Northern dressed trade took place mostly on Thursday with a little cleanup on Friday, with a full range of $162 to $165, mostly $163, generally $2 higher than previous week’s weighted average basis Nebraska.
For the week ending September 12, 2020, Imported Beef Passed for Entry in the U.S. totaled 36,388, 84.37% of the previous week and 81.60% of the 4-week average.
Expected Slaughter numbers Monday
119,000 hd today 117,000 hd wk ago 115,248 hd yr ago
481,000 hd today 481,000 wk ago 115,248 hd yr ago
Midday Carcass Value Monday
Choice up 1.22 216.86
Select up 1.46 205.40
C/S Spread 11.46
Carcass up 3.09 90.62
Bellies up 6.98 152.24
- Corn dn 4 3/4 – 8 3/4
- Soybeans dn 11 1/4 – 21
- Chicago Wht dn 13 1/4 – 20 1/4
- Kansas City Wht dn 13 3/4 – 17
- Live Cattle dn 0.65 -1.25
- Feeder Cattle dn 0.92 up 0.20
- Lean Hogs dn 0.97 up 1.02
- Class III Milk up 0.01 – 0.26
Pre-Opening Market Broker Commentary
Mark Gold, Top Third Ag Marketing, discusses overnight grains and what the trade may see today. China continues to buy soybeans, but there are reports that they are selling them back to Brazil.
Jerry Stowell, Country Futures, looks at what may impact the livestock futures today. Outside markets are in risk off territory, but cattle and hogs may focus on stronger cash.
Mike Zuzolo, Global Commodity Analytics, takes a look at the midday trade. Monday is a traditional risk off day.
John Payne, Daniel’s Ag Marketing, takes a closer look at today’s grain close. The current market trend is tough for forward sellers. John Payne not available Monday 9/21.
Jack Fenske, York Commodities, looks at the closing market numbers. Grains may be putting in a high and starting a lower leg.