TFM Mid-Day Update June 18, 2019


Corn futures are trading mixed to slightly lower this morning, with Jul corn up a penny to 3.55-3/4, Sep corn is down 1/2 cent to 4.61, and new crop Dec corn is down 3/4 cent to 4.67-3/4. Yesterday’s Crop Progress report had 92% of the nation’s corn planted as of June 16 vs 100% on average. Corn emergence was seen at 79% vs 97% on average and crop ratings remain unchanged, seen at 59% good to excellent, steady with last year and sharply below the same week last year at 78% good to excellent. Planting progress was at the high end of expectations but considering there is still 8% of the corn left to be planted by the middle of June, this is still a supportive number. Corn prices sold off overnight with Dec reaching as low as 4.56-3/4. This setback was likely technical in nature. Prices have so far recovered from the overnight session’s lows as setbacks are seen as buying opportunities. Funds bought 4,000 contracts of corn yesterday and are thought to be net long about 211,000 contracts.


Soybean futures are showing modest gains so far today after selling off overnight. Jul beans are up 4-1/4 to 9.17, Sep beans are up 4-1/4 to 9.30-1/2, and new crop Nov soybeans are up 4-1/4 to 9.43-3/4. Yesterday’s Crop Progress report was seen as supportive, with just 77% of the soybeans planted vs 93% on average. Emergence was seen at 55% vs 84% on average. News this morning that Trump and President Xi will have an extended meeting at next week’s G20 meeting was also supportive after trade talks broke down in May. Weather forecasts remain supportive of prices as well, with above-normal precipitation seen for the next 6-10 and 8-14 days. Funds bought 14,000 contracts of soybeans yesterday and are thought to be net short about 44,000 contracts.


Wheat markets are lower this morning, finding sellers on crop ratings that turned out better than expected. Jul Chi wheat is down 3-1/4 cents to 5.36-1/4, Jul KC wheat is down 7 cents to 4.68-1/2, and Jul spring wheat is down a penny to 5.59-1/4. Winter wheat conditions were seen yesterday at 64% good to excellent, steady with the previous week and sharply higher than last year at just 39% good to excellent. Though good to excellent ratings did not increase, the fact that ratings stayed steady was seen as negative. Excessive rains last week had many anticipating a drop in conditions. 89% of the winter wheat is headed vs 95% on average and winter wheat harvest is seen at 8% complete vs 20% on average. Selling today is likely also technical in nature as the Chi wheat contracts are still showing overbought technical indicators. Jul Chi wheat traded as low this morning as 5.25-1/4 but has rebounded thus far. Funds sold about 1,000 contracts of Chi wheat yesterday and are thought to be net long about 22,000 contracts.


Cattle markets are very slightly higher and follow-through buying today, with Jun lives up 15 cents to 109.60, Aug lives are up 22 cents to 105.85, and Oct lives are up 57 cents to 107.27. Aug feeders are up 47 Cents to 137.40 and Sep feeders are up 67 cents to 137.85. Trading ranges today have been extremely tight but movement above near-term resistance levels is a positive development. The best traded Aug live cattle contract is currently trading above its 20-day moving average level. Aug lives have only closed above this level once since April 23, so any technical price action above that level has the potential attract buyers. Aug feeders broke through their 10-day moving average resistance level early this morning and tested their 20-day moving average resistance but have since fallen back below both price levels.


Hog markets are mixed this morning, with Jul down 55 cents to 82.50, Aug hogs are up 15 cents to 82.40, and Oct hogs are up 62 cents to 77.40. The nearby lean hog contracts have tested their overhead resistance levels this morning but have since fallen back below. The best traded Aug contract traded as high as 83.67 but has backed off considerably. Cash fundamentals are still mixed at best, and though technicals are giving oversold readings, lack-luster demand is just not enough to spark much ownership. Price action looks weak, and another failed test of resistance is a bearish signal.



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