The trade could quickly turn attention forward to the October 12th Supply and Demand report.
Today's Cattle on Feed report is a bearish surprise. USDA’s monthly survey of feedlots found 2.6% more placements in August against the trade expectation of a 2.1% decline.
The trade has constantly disagreed with the government thoughts on the size of the soybean crop. If yields are lower, this could ignite another round of buying.
Producers are now marketing hogs that are in the red. This should last for several weeks ahead.
It is interesting to note that this market is doing a very similar thing to last year, just before the last bearish leg of the decline.
Overall, the trade expects the USDA Crop Production and September Supply/Demand Reports Tuesday to be bearish.
On the bear side, this year’s production will easily surpass next year. On the bull side, we have two new plants that are opening.
We estimate this year’s national bean yield at 47.1 bushels per acre. If our survey results are accurate, soybeans are easily $1 under value.
The market pretty much consolidated today as the trade continued to digest yesterday’s USDA bearish surprise.
The week's kill may have come in a little larger than the trade was expecting. The talk this morning was for a 45,000 head Saturday run. Packers will surpass that, according to the USDA, with a 58,000 head run. That puts the week's total to 641,000. This is the biggest kill of all of 2017, 2016, 2015, and 2014. You have to go back to July 20 of 2013 to find something larger. It would also be 10.7% over last year in the same week. This now makes it three weeks in a row of 8% to 11% higher than last year's numbers. Before this, the recent pace had been only 5.5% over.