Cattle: Cash cattle last week: $143.-145.00; on 80 boxed loads cut outs up. $.08(c) to up. $1.55(s) on good midday movement.
Comments: August could not make another new contract high and when that happened, seemed profit taking swarmed in. Feeder cattle also hit with a technical correction.
Hogs: Interior hogs N/C (E), dn. $2.96 west Pork cut outs fell $.51.
Comments: Nothing here really. Futures just prowled around looking to get a rise out of either longs or shorts to coat tail but little else. Wt.s 11.7lbs. over a yr. ago; western interior corn belt losses; and some weakness in the pork trade kept serious players basically quiet. More new losses in the grain pits may have added a negative psychology as well.
GRAINS & OILSEEDS:
The USDA reports were at once neutral/negative but overall negative perhaps since they now allow most of the trade attention on the weather now that it’s out of the way. So, as per weather the forecasts are fairly favorable 7-14 days out.
But here’s the individual breakdown:
Corn: Old crop carryover left unchanged which was a disappointment to the bulls but in effect neutral to the bears. New crop carry also unchanged with production and usage unchanged (way too early); both old crop and new crop world carryover numbers increased. Where’s the bearishness? Favorable weather and the global supplies, and toss in poor technical for good measure. I would not have added to shorts on this report alone and in fact suggest reasons for a bounce are on the perimeters.
Soybeans: Did we not have an aggressive rally after the May S/D report lowered bean carryover by 5 mln. bu.? It was lower another 5mln. this time but prices fell hard. Why? The game was over with, short-blood taken out ad with imports we know, as we knew then, the U.S. would not run out of beans. Old crop carryover was specifically due to a 5mln.bu. increase in the crush and with some verification of ‘beans on the ground’, that will likely be about it for the crush. New crop carry-out was off 5mln.bu. due to a 5mln.bu. decrease in the carry-in, rest of the usage numbers unchanged. July beans fell to levels that are critical to me in the $14.50-14.40’s as mentioned and not to be vindictive, but I’ll keep my downside objective for now.
Wheat: Another smacking. Can’t win for losing as while the new crop production was lowered by 21mln.bu. (yld. off .4bu./acre), carryover was raised by 34mln.bu. Why? Food/Feed/Exports reduced b 45 mln.bu. AND carry-in raised by 10mln. Self-explanatory math. Add on new crop world carryover up a moderate 1.4mln.m/t’s and counting since many areas overseas are in good shape. If I can get a rally out of corn perhaps we can get an oversold rally out of wheat.
Do not get me wrong: no significant weather problems U.S. or overseas and it still looks to make prices grim for the producers in the July or late July time frame.