TFM Mid-Day Update July 1, 2019


Corn futures are finding more sellers this morning, with the nearby Jul contract down 9 cents to 4.11-1/4, Sep is down 9-3/4 to 4.15, and Dec corn is down 9 cents to 4.22-1/2. There are still gaps on the charts that seem to be downside targets. Dec will need to trade as low as 4.20 to close its gap. Weather this week looks beneficial for the corn crop with hot temperatures. As we look into the month of July, temperatures begin to cool off. The U.S. shipped 618,000 tons of corn for the week ending June 20 vs 678,000 tons last week and 1.54 million tons the same week last year. Corn shipments are running nearly 3 million tons behind last year’s pace. Funds sold and estimated 44,000 contracts of corn on Friday.


Soybean futures are trading lower today with Jul down 10-1/4 cents to 8.89-1/2, Aug beans are down 11-1/2 cents to 8.93, and new crop Nov soybeans are down 11-3/4 cents to 9.11-1/4. Nov beans have fallen through their 10, 20, 100, and 200-day moving average levels after gapping higher on the overnight session. The market does not appear to trust the USDA’s 80 million planted acre number released on Friday. While these numbers are probably representative of what was intended during the first two weeks of June, intentions likely changed as producers ran out of time on the calendar to plant corn. Soybeans are not finding much support this morning from a positive close to the G20 Summit. Not only did Trump and President Xi agree to restart trade talks but Trump also decided not to levee tariffs on 300 billion dollars worth of Chinese goods. The U.S. shipped 113,000 tons of beans for the week ending June 20 vs 680,000 tons last week and 517,000 tons the same week last year. Soybean shipments are running about 12.5 million tons behind last year’s pace. Funds bought about 9,000 contracts of beans on Friday.


Wheat markets are sharply lower this morning, with Sep Chi wheat down 14-1/4 cents to 5.13, Sep KC wheat is down 17-1/4 to 4.44-1/4, and Sep spring wheat is down 7 cents to 5.47-1/4. Today’s price action in the wheat is likely on follow through from Friday’s selloff, as well as general pressure in the grain sector. Friday’s selloff after making the highest closes in months is a strong sign that the seasonal highs could be in and today’s price action is pushing wheat below support levels. Russian wheat prices are up today on hot and dry weather, but the U.S. dollar is sharply higher. The U.S. shipped 406,000 tons of wheat for the week ending June 20 vs 382,000 tons last week and 364,000 tons the same week last year. Cumulative wheat shipments are running about 10,000 tons ahead of last year’s pace.


Cattle markets are mixed to mostly higher today with Aug lives down 22 cents to 104.12, Dec lives are up 15 cents to 110.40, and Feb lives are up 35 cents to 114.47. Aug feeders are up 10 cents to 136.95 and Sep feeders are up 75 cents to 137.45. Cash trade on Friday afternoon was steady to slightly higher than the previous week and retail beef values may be attempting to stabilize. The price action today has been quiet, and the buying is understandably muted today after Friday’s session failed to post weekly key reversals. Feeder contracts retested the highs from Friday but have backed off in disappointing price action.


Hog markets are higher this morning with Jul up 2 cents to 72.12, Aug up 2.10 to 78.10, and Oct up 1.92 to 72.77. Positive trade developments with China over the weekend is a major source of the buying action today and prices are currently testing their overhead resistance levels. A Reuter’s article published over the weekend included speculation from some familiar with the pork industry in China, that up to 50% of the sows in China are dead. Still, pork production last week was up 9.8% from last year and is overwhelming current domestic pork demand.



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