Midday Update Thursday, September 05, 2019

CORN: Corn futures are trading very slightly higher in early trade today, with Sep up 2-1/4 cents to 3.48-1/4, Dec corn is up 1-1/2 cents to 3.60, and Mar corn is up 1-1/4 cents to 3.73. The lower U.S. dollar is supportive today, along with reports that lower level trade talks between China and the U.S. have begun as well as an announcement that high level talks are scheduled for some time in early October. Weather forecasts are a pressure point, with two-week outlooks showing above-normal temperatures. Corn futures are still oversold after making new contract lows yesterday. While the small bounce today is nice to see, there is no signal yet that a low is in or that speculative funds will begin to cover their shorts. Speculative funds were thought to have sold about 15,000 contracts of corn yesterday.

SOYBEANS: Soybean futures are soft this morning, with Sep down 6-3/4 to 8.55-3/4, Nov beans are down 9 to 8.66-12, and Jan beans are down 8-3/4 to 8.80-1/2. China trade talk news is supportive today, and yesterday’s flash sale of 452,000 tons of beans to Mexico was also a positive. The major pressure today seems to be stemming from non-threatening weather forecasts as well as traders pushing prices back below some resistance levels broken yesterday. The best traded Nov contract closed above its 10 and 20-day moving average level yesterday for the first time since July 19. This would normally be seen as a positive sign and a trigger for short covering, but instead, money appears to have doubled down on short bets today and has moved prices back towards the 10-day moving average level. Speculators were thought to have bought about 6,000 contracts of soybeans yesterday.

WHEAT: Wheat markets are finding more buyer support today after a solid bounce yesterday. Dec Chi wheat is up 8 cents to 4.68-3/4, Dec KC wheat is up 9-1/2 cents to 3.94, and Dec Mpls wheat is up 8-1/4 cents to 5.02-1/4. The U.S. dollar is lower this morning, a major positive factor in the wheat markets. However, the U.S. dollar did hold onto some support levels and rebound to near yesterday’s closes. If the U.S. dollar begins to move higher, expect some pressure to return to the wheat markets. Some short covering was noted yesterday from the speculative funds, but heavy world inventories are still bearish overall. Dec Chi wheat tested its 10-day moving average resistance level earlier in the session but has since backed off a bit. Dec KC wheat has still yet to break through the highs from Tuesday and Dec spring wheat is testing its 10-day moving average for the first time since August 28. Speculative funds were thought to have bought about 4,000 contracts of Chi wheat yesterday.

CATTLE: Cattle markets are slightly lower in early trade today, with Oct lives down 47 cents to 98.55, Dec lives are down 55 cents to 103.02, and Feb lives are down 30 cents to 109.00. Sep feeders are down 82 cents to 134.72 and Oct feeders are down 92 cents to 132.50. Cash cattle traded yesterday at $103 in NE, $1-$2 lower than late-week trade last week. It will be important for the cash markets to stabilize into the end of the week to see if futures markets rally. The stock market is up over 400 points this morning which is seen as positive for the consumer beef demand but a hefty supply of market-ready cattle in the near term could create a bit of a backup situation. The best traded Oct live cattle contract has not traded above its opening price today, but it has regained about half of the session’s losses so far. Oct lives traded at their lowest levels today since August 19. Oct feeders were unable to break through their 20-day moving average level this morning but have stabilized near the 10-day moving average level.

HOGS: Hog markets are moderately higher in early trade today, finding support on a bit of optimism about U.S./China trade negotiations. Oct hogs are up 10 cents to 67.22, Dec hogs are up 1.17 to 66.40, and Feb hogs are up 1.20 to 74.22. While U.S. cash fundamentals continue to slide, the China pork situation continues to worsen and monthly Chinese pork imports for the month of July were the highest since late 2011. Some lower-level meetings between the U.S. and China trade officials are scheduled for the middle of this month with higher-level talks beginning in early October. Oct hogs are trading at their highest levels today since August 15 though prices are beginning to creep into overbought levels. Dec and Feb hogs are nearing overbought levels as well and Feb has crossed above its 50 and 200-day moving average resistance levels for the first time since July 29.


Carol Tillmann

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