Midday Update 9-11-2019


Corn futures found some selling action this morning at nearby resistance levels challenged during yesterday’s pop. Sep corn is down 2-1/2 cents to 3.46, Dec corn is down 3-1/2 cents to 3.58, and Mar corn is down 4-1/4 cents to 3.70-1/4. Talk of more Chinese goodwill purchases ahead of the next round of trade talks seems to hold a bit more water lately, and the recently fired National Security Advisor John Bolton was seen as a China hawk and many view the chances of a China trade deal as higher now that he is no longer involved. However, forecasts for above normal temperatures for the next two weeks should benefit the late developing crop. Selling today appears to have a technical base as well, with prices falling back below their 10-day moving average levels. Both Dec and Mar corn futures contracts opened above those levels after a test yesterday, but have fallen back below. Stochastics are still giving oversold readings. Speculative funds were thought to have bought about 15,000 contracts of corn yesterday.


Soybean markets are drifting back towards near term support this morning with Sep beans down 7-3/4 cents to 8.51, Nov beans are down 4-1/2 cents to 8.67-1/2, and Jan beans are down 4-3/4 to 8.81. The late developing soybean crop should benefit from above normal temperatures for at least the next two weeks, and China announced yesterday that they will allow imports of soybean meal from Argentina. Usually China prefers to buy raw beans and crush them at their own plants, so this could reduce future raw soybean demand depending on how much Argentina can reliably supply to China. Still, futures are finding some support on improving trade relations with China. Nov beans traded as low this morning as 8.64, but have bounced up and are settled in directly above their 10 and 20-day moving average support levels. Today’s setback would not look so negative if prices can hang onto these levels. Speculative funds were thought to have bought about 7,000 contracts of soybeans yesterday.


Wheat markets are mostly lower this morning and saw a technical correction from the sharp rallies lately. Dec Chi wheat is down 7-1/4 cents to 4.75, and Dec KC wheat is down 5-3/4 to 3.98, and Dec spring wheat is up 1/2 of a cent to 5.04-1/4. The U.S. dollar is higher this morning keeping wheat markets in check, as well as higher production and ending stocks estimates coming out of France and the Ukraine. Winter wheat futures have closed higher in four of the last five sessions, so the break today is also technical in nature. Spring wheat futures are slightly higher and testing nearby resistance due to short covering, as well as heavy rain totals in the northern Plains lately. Speculative funds were thought to have bought about 4,000 contracts of Chi wheat yesterday.


Cattle markets are showing triple digit gains today, with Oct lives up 1.57 to 97.72, Dec lives are up 1.67 to 102.90, and Feb lives are up 1.12 to 109.55. Sep feeders are up 1.65 to 135.57, and Oct feeders are up 2.60 to 133.65. While early week cash trade and retail beef values have been disappointing, technical price action this week has been impressive. In the live market, the front month Oct contract held a long term support level from 2016, stabilized and began to move higher yesterday. The follow through today is impressive and futures are starting to correct through some nearby resistance levels. Feeder markets have held the recent lows from mid-August and have begun to move towards the upper end of the recent trading ranges.


Hog markets are sharply lower today in more choppy trade. Oct hogs are down 2.77 to 59.95, Dec hogs are down 1.60 to 60.17, and Feb hogs are down 1.75 to 67.40. Domestic hog and pork prices continue to slide, though the expectation for a surge in exports still exists. China pork situation has escalated quickly and China has begun to relieve some state reserves of pork products to try and stabilize prices. The best traded Oct lean hog contract is holding onto the lows from yesterday and the most recent lows made on August 23. Dec hogs are in an inside session today in fairly quiet action. Prices are still holding nearby support, though momentum is pointing lower.


Lisa Heder

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