TFM Midday Update 6-12-20

CORN

July up 0.015 @ 3.3125, September up 0.01 to 3.36, December up 0.005 to 3.4425
Yesterday’s USDA report indicated 2020/21 U.S. corn ending stocks would be the largest since 1987/88 and U.S. ending stocks/use ratio would be largest since 1992/93
Forecasts for the next two weeks are hot and dry for most areas
July futures traded as high today as 3.33 but have fallen back near the lows of the day
Yesterday’s successful tests of nearby support despite a bearish WASDE report are likely attracting buyers today
Funds bought about 13,000 contracts yesterday

July up 0.03 @ 8.69, August up 0.03 @ 8.71, November up 0.035 @ 8.8025
Yesterday’s USDA report indicated 2020/21 U.S. soybean ending stocks and ending stocks/use ratio would be the lowest since 2016/17
Strong export sales to China this week, U.S. sold beans to unknown destinations this morning
Markets responding to hot forecasts may continue to add weather premium
July beans tested their 100-day moving average resistance level early in the session but have since backed off
November beans traded above the 100-day moving average level for the first time since mid-January
Overbought Stochastics
Funds bought 1,000 contracts yesterday

July CHI up 0.02 @ 5.0125, July KC up 0.0475 @ 4.5175, July MPLS wheat up 0.03 @ 5.1625
U.S. and world wheat carryout increased on yesterday’s USDA report, though U.S. stocks are expected to come in at a six-year low
KC wheat harvest will benefit from hot and dry weather
CHI futures made an early test of lows from March and May but have since bounced back higher
KC futures also tested recent lows but are testing the 20-day moving average resistance
MPLS contracts are trying to stabilize after disappointing losses yesterday and are testing the 20-day moving average resistance
Funds sold about 5,000 contracts of CHI wheat yesterday

June lives up 0.27 @ 97.10, August lives up 0.02 @ 96.50, October lives down 0.02 @ 99.05
August feeders up 0.75 @ 132.92, September feeders up 0.90 @ 134.15
Sell-off in boxed beef values may be slowing down
Very choppy and volatile cash trade this week
August lives tested their 10-day moving average resistance early in the session but have fallen back near the lows of the day
Stochastics are nearly oversold
August feeders have traded in a quiet range so far today centered around the 20-day moving average resistance

June up 0.15 @ 48.12, July down 0.25 @ 51.87, August down 0.20 @ 54.67
USDA increased 2020 pork production from the May report
Pork shipments are beginning to outpace export sales
Decreasing weights for 4 weeks in a row could indicate that more hogs may have been euthanized than initially expected
Pork values closed higher yesterday for the first time in five sessions
July hogs still trending lower and still oversold
Unsuccessful test of 10 and 20-day moving average resistance for the August contract

Sam Seid