Afternoon Summary: A look at Friday afternoon’s Barchart Futures Market Heat Map and the first thing that came to my mind was it looked a lot like my golf game. In other words, if we narrow our view to the 9 sectors of the commodity complex, including the All Markets category, there was no green in sight[i]. As I mentioned in Friday’s Chart of the Day, the hardest hit was Metals where silver was down $5.44 (7.4%) late in the session while gold was sitting $157 (3.5%) lower. Energies followed metals with WTI crude down $2.70 (2.9%), Brent crude off $1.80 (1.9%), and distillates (diesel fuel) sitting 8.9 cents (2.4%) lower at this writing. As expected, it was an interesting day out in the Barn where both feeder and live cattle markets closed higher, though the gains were offset by solid selling, including from the commercial side, in lean hogs. The dynamics of live cattle were mixed with futures spreads indicating Watson was buying while commercials were selling. What stood out to me here was June closing near $250, up $0.90 for the day but still trailing the reported cash price of $258. All of Friday’s activity was set up by the much stronger than expected May employment number of 172,000 jobs.
Corn: Given what we saw with the other two Kings of Commodities, Crude Oil and Gold, should we expect King Corn to finish in the green Friday? Probably not. The July issue lost as much as 8.5 cents on trade volume of 262,000 contracts before settling 7.0 cents in the red for the day and 29.25 cents lower for the week. While waiting for tonight’s National Corn Index to be calculated, the discussion at the local watering hole might be about how July hit a new contract low of $4.16 Friday. In fact, the previous contract low of $4.2850 was taken out both Thursday and Friday. The hybrid (old-crop/new-crop) September issue closed 5.75 cents lower for the day and down 28.75 cents for the week. Was there anything bullish about the new-crop market? December dropped as much as 7.0 cents on trade volume of 145,000 contracts before settling 5.75 cents lower for the day and 29.0 cents lower for the week. But wait, there’s more. Dec26 lost 0.5 cent to March, 1.0 cent to May, and 3.5 cents to Dec27. If this were a title fight, it would be stopped by a merciful referee. For the record, the Dec-March spread covered 52% calculated full commercial carry.
Soybeans: When thinking about the soybean market Friday, Igor’s statement to young Dr. Frankenstein came to mind, “Could be worse. Could be raining.” Yes, the soybean market was bearish to close out the week. The nearby July issue lost as much as 12.0 cents on trade volume of 146,000 contracts before finishing 8.0 cents lower for the day and 65.25 cents lower for the week. Yes, you read that right, 65.25 cents lower for the week. As I talked about Thursday in this space, old-crop soybeans had the smell of export sales cancelations the past couple days, but China only has about 15 mb of unshipped 2025-2026 sales on the books. The silver lining this week, acknowledging silver isn’t doing all that well either, is national average basis has continued to firm, raising weekly comparisons from previous 5-year and 10-year low weekly closes to average weekly closes. The bottom line is it doesn’t matter, as the National Soybean Index is expected to be down about 62.0 cents for the week later tonight. New-crop November did relatively well Friday given the favorable weekend weather forecast, settling 4.0 cents lower for the day but still 52.5 cents lower for the week. The Nov-March futures spread covered 41% calculated full commercial carry.
Wheat: I had to laugh when I pulled up the quote screen for the wheat sub-sector Friday afternoon. As I said in Morning Commentary, “It would not be surprising to see July break its string heading into the weekend, particularly with daily stochastics (a technical momentum indicator) running in the low single digits indicating the issue is sharply oversold.” Technically, I was correct and the July issue somehow eked out a 0.5 cent gain at the close, bringing its string of 11 consecutive lower daily closes to an end. However, the September contract closed 0.5 cent in the red, extending its daily string to 12. We’ll see if next Monday is lucky number 13. For the record, September has lost 82.5 cents while digging this hole, closing an even 30.0 cents lower for the week Friday afternoon. We’ll find out later tonight if US Southern Plains merchandisers are will to throw a lifeline by firming national average basis. Last Friday’s calculation came in at 77.5 cents under September futures followed by this past Thursday’s night’s calculation of roughly 72.25 cents under September. July SRW was down 1.75 cents for the day and 30.5 cents for the week while futures spreads remain bearish heading into the weekend.
[i] After writing that opening, it dawned on me that in keeping score in golf, aka A Good Walk Spoiled, red numbers are preferred as it represents below par. While I understand the concept, it was something I never experienced. I haven’t played since moving to Omaha 21.5 years ago.
