Stewart-Peterson Market CommentaryClosing Commentary - August 29, 2014
Stewart-Peterson Closing Commentary 8-29-14
SOYBEAN HIGHLIGHTS: Soybean futures, with the exception of the Sept contract finishing 15-3/4 cents higher to 10.89-3/4, finished 3 to 5 lower today. Nov beans were down 4-1/2 to 10.24-1/4. For the week, the Sept contract saw a lot of volatility and posted a 76-1/2 cent lower move, while the Nov contract dropped 17-3/4 cents. Much like corn, bean prices continue to suffer as the weight of bearish expectations for record harvest this fall continues to loom. Nov bean prices pushed to their lowest prices in nearly 4 years this week with prospects of them moving lower and continue to weigh as weather stays favorable for this crop. The biggest factors that could be slowing this decline to lower prices is continued demand for US beans. New crop sales are at 46% of USDA estimates for next year. If prices continue to slide, more buyers may be stepping up to the plate. Today, the USDA added 4.8 mil bu of new crop soybean sales to unknown destinations. In addition, crush premiums are still at all-time highs, and the demand for soybean meal continue to be strong.
WHEAT HIGHLIGHTS: Wheat futures reversed course after yesterday's strength given the Ukrainian tensions as contracts posted 6 to 8 cent losses. Nearby Sept wheat was down 6-1/4 to 5.50-1/4, and Dec was down 8-1/4 to 5.63. For the week, the Dec Chi wheat contract posted 1-1/4 cent gain while Sept moved 1-3/4 cent lower. After a strong double-digit rally yesterday after the tensions in the Ukraine seemed to escalate, profit taking going into the three-day weekend was the measure of the day. The Ukraine unrest continues to be a possible bullish trigger to watch for moving forward in the wheat market, but the prospects of a global supply picture being extremely flush with wheat continues to keep things in check. One concern in the market that has been giving us some support is continued concerns regarding quality due to persistent rains in Europe as well as the US. The five-day forecast is showing lighter rain amounts in the north central US which should help with the wheat harvest.
LEAN HOG HIGHLIGHTS: Hog futures showed strength this afternoon as the meat complex in general seemed to catch a bit of a bid this afternoon. Nearby Oct hogs were up 2.65 to 98.12-1/2, followed by Dec up 1.62-1/2 to 92.00. Hog prices have tumbled the past few weeks as wholesale pork prices have fallen nearly 48.00 since peaking at a record late last month. As prices are now seeming to become cheap, especially in competition with beef, buying interest has stepped back into the market with the prospects that we could be seeing some seasonal strength coming back into retail cuts. In addition, today's move was technical as well some short covering of those short positions that have been running for a long period of time. This afternoon, wholesale cutout values rose 82 cents, also fueling some speculation that buying interest may be picking up at the retail level. Cash prices continue to stay weak which could limit gains as we move forward. If retail prices can continue to get some legs, cash prices could firm up as packers will be more willing to pay up for hogs. The big thing still to focus on is wholesale demand, as well as where we are in terms of total pounds of pork being produced moving forward.
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