CORN HIGHLIGHTS: After a strong start to the week, which prices reached their highest level in two months, prices closed lower each of the last four sessions with futures losing ground again today. Dec led the way lower closing at 3.67, down 3-3/4. Deferred futures contracts finished 2-1/4 to 3-1/2 lower. We're not totally surprised as we expected better weather in the forecast for harvest, along with an increase in farmer selling over the last week, to weigh on futures, as did a lack of positive news on the export front. Weakness in wheat and soybeans this week also weighed on futures as did a net gain in the U.S. dollar. The dollar, however, finished the day lower and with prices testing channel-line support futures may find new buying early next week. However, the market, while trading in a near-term uptrend, is testing the bottom side of the trend. If prices were to slip through this level, this may suggest that Dec futures test 3.62 and if this doesn't hold a test of 3.54-1/2, the low from September 28. Yield results continue to pour in and generally are as expected, or in some cases better, and in many cases a variable with farmers telling us yields did not match last year's.
SOYBEAN HIGHLIGHTS: Soybean futures started the week with a bang with strong double-digit gains on Monday. However, prices finished lower in four consecutive sessions and actually ended the week softer than where they started. Nearby Nov lost 6-3/4 cents closing at 8.56-3/4 after posting a high of 8.92 on Monday. Last week's close on Nov beans was 8.67-1/2. This is a technical hook reversal. Good harvest weather and continued good yield results suggest that bean prices may struggle, and by weeks end they certainly did. Softer soymeal prices again today suggest that processors may be pulling long hedges off as they secure inventory. On the one hand, bean prices could have slid significantly lower after the last USDA report which indicated record carryout both domestically and worldwide, but instead prices rallied. At the end of this week they softened. In the end they are consolidating but the downward momentum could be growing.
WHEAT HIGHLIGHTS: Wheat futures finished mixed with bull spreading noted in Chi as Dec closed up 1-3/4 at 5.14-3/4, but deferred Sep was down 1/4 cent at 5.62-1/2. KC finished up 1-1/2 to 2 cents, while Mpls finished up 3 to 3-3/4. Our bias is that wheat prices continue to consolidate and that is the way they behaved this week. They are range bound with traders selling rallies and buying dips. For the week, Dec Chi lost 3-1/4 cents. On a more macro scale, weather should allow for continued harvest of spring wheat in Canada and sowing of winter wheat in the Midwest. However, parts of the South remain wet and are beginning to question whether or not they will plant all acres.
CATTLE HIGHLIGHTS: Cattle futures saw marginal losses as front month Oct was 0.825 cents lower to 112.85, while Dec cattle were down 0.400 cents to 116.775. For the week, prices stayed relatively calm as the Oct contract was down 0.075 cents, and Dec finished 0.600 cents firmer. The market stayed in consolidation mode building toward this afternoon's Cattle on Feed report. Cattle on feed numbers posted cattle on feed at a 5% rate over last year at 11.4 million head as of October 1. This is the highest October 1 inventory since 1996. Marketing was within expectations at 96%, but placements were light according to expectations at 95%. In today's trade, cash trade stayed relatively undeveloped, with earlier week trade staying relatively steady. Bids and offers stayed firm with packers bidding $111, offers were $112 to $114. Additional cash trade will likely develop later this afternoon. Retail values stayed firm towards the end of the week as midday carcasses saw choice carcasses up 1.400 to 208.220 and select carcasses up 1.510 to 193.860.
LEAN HOG HIGHLIGHTS: Hog futures closed moderately lower today, extending yesterday's losses and pushing prices to the lowest levels since mid-August. The Dec futures contract closed 70 cents lower to 51.60, Feb closed 1.20 lower to 59.02, and Apr closed 1.27 lower to 65.72. The CME Lean Hog Index was down 83 cents today to 67.76. Carcass cutout values were 40 cents lower yesterday afternoon to 78.12 but bounced 1.02 higher today to 79.14. The bounce in pork values was unable to keep much support in hog markets past mid-morning as sellers emerged on failed tests of overhead resistance levels. The slaughter pace is beginning to ramp up, and with a jump in average weights last week of almost two pounds, production may soon overwhelm current demand. Technical action today was at first positive looking and then quickly turned to a very sour finish. The Dec futures contract initially tested its 100-day moving average resistance level. Yesterday's close below was the first in weeks, so prices appeared to try and retake that level. However, the current trend is lower, and momentum taking prices lower is mounting. Today's close in the Dec contract was the lowest since August 24. The Feb contract made a similar test of its 100-day moving average resistance level and then was met with sellers to make its lowest close since August 16.