CORN

Corn futures are trading essentially steady so far today with Mar unchanged at 3.89, May is down 1/4 of a cent to 3.95-3/4, and Jul is down 1/4 of a cent to 4.02. The market seems to be holding its breath this morning ahead of the phase 1 deal signing scheduled for later this morning. South American weather is still non-threatening with rains scheduled for Brazil and Argentina over the next week or so. China has scrapped their 2020 ethanol mandate and will not increase tariff-free quotas at this point, so it appears that new China buying may be limited, at least in the beginning. Mar corn briefly tested support at the 10 and 100-day moving average levels, but has since bounced back above. Corn is currently trading near the middle of the day’s range so far. Speculative funds were thought to have sold about 5,000 contracts of corn yesterday.

SOYBEANS

Soybean futures are trading slightly lower this morning with Mar down 1/2 of a cent to 9.41-3/4, May is down 1/2 of a cent to 9.55, and Jul is down 1/2 of a cent to 9.66-3/4. The phase 1 deal signing today should be positive, though the market will not get to see any detailed purchase amounts. China is expected to buy $40 billion in Ag products, but even this number has not been officially confirmed. Non-threatening weather in South America continues to limit gains, but soybeans have held up nicely in their recent range. Still, most contracts have made three consecutive closes below the 20-day moving average level, which does not indicate growing strength. Bean prices have so far held to the low end of the recent range today. Speculative funds were thought to have sold about 3,000 contracts of soybeans yesterday.

WHEAT

Wheat markets are mixed to mostly lower this morning with Mar Chi wheat up 2-1/2 cents to 5.71, Mar KC wheat is down 1-1/2 cents to 4.95-1/2, and Mar Mpls wheat is down 1-3/4 to 5.54-1/4. The U.S. dollar may be starting to turn lower out of its recent trading range which is a positive development. Increasing open interest on the recent rally implies more fund buying and talk of Russian export limits should contribute to rising global cash prices. Egypt bought wheat this week at the highest prices since late February, and purchases for this season started July are running 6% ahead of last year. Mar Chi wheat is extending its rally, trading at its highest levels today since November of last year. Mar KC wheat traded at its highest levels today since July 15th, but has fallen to the lower 1/3 or the day’s range so far. Mar spring wheat is trading in the middle of the day’s range after testing and holding nearby support at the 10-day moving average. Speculative funds were thought to have bought about 4,000 contracts of Chi wheat yesterday.

CATTLE

Cattle markets are moderately lower this morning with Feb lives down 45 cents to 126.40, Apr lives are down 60 cents to 127.27, and Jun lives are down 67 cents to 119.05. Jan feeders are down 60 cents to 145.30, and Mar feeders are down 1.05 to 144.67. Cash trade has been undeveloped so far this week, but the trend does appear higher. Choice beef values closed over 2.00 higher yesterday at their highest values since December 17th which should give packers the ability to bid up in the country this week. However, better than usual weather in the Plains lately has made weight gain unusually easy and weights are elevated. Feb live cattle are currently trading at their 10 and 20-day moving average support levels. This has been a major line in the sand lately for the Feb cattle, and today marks the 7th session in a row that futures have tested this area. Mar feeders are trading below nearby support at the 10 and 20-day moving average levels, but have held the 50-day moving average level so far. A close below the 10 and 20-day moving average lines would be the first since January 3rd and could turn the trend lower.

HOGS

Hog markets are mixed to mostly higher today with Feb up 5 cents to 67.72, Apr is down 12 cents to 74.87, and Jun is up 27 cents to 87.10. The U.S. and China are expected to complete the phase 1 trade deal later this morning, and many are calling for the hog market to be the most affected futures market in the near term. China pork imports in 2019 were up 75% from 2018 and reached 2.108 mil pounds, a record high. Carcass values were able to gain some traction yesterday and the CME lean hog index is very slightly higher. Feb hogs are trading at the highs of the day so far and look poised to test their overhead resistance at the 10-day moving average. A close above would be the first since January 2nd. Apr hogs are also trading at the highs of the day and are just below their 10-day moving average resistance level and the Jun contract is trading above its 10-day moving average resistance level. Technical indicators are pointing higher after recently recovering of oversold territory.

Author

Kelly Rubisch