TFM Mid-Day Update June 20, 2019


Corn futures are trading higher this morning after back testing support levels held yesterday. Jul corn is up 4-1/4 cents to 4.45-1/4, Sep corn is up 5-1/2 cents to 4.51-3/4, and new crop Dec corn is up 6 cents to 4.59-1/4. After holding the 10-day moving average support levels at yesterday’s close, sellers pushed corn futures below that support level during the overnight session. Prices bounced back above that level by the pause session and have since rallied during the day. This is a positive technical development because it shows that new short sellers were not active at recent levels. Cool and wet weather this week has not helped the corn crop mature much and we are likely to see yield drag down the road. Markets are focused on next Friday’s Grain Stocks and Acreage report. The U.S. sold 38,400 metric tonnes of corn for the week ending June 13, down 77% from last week and down 90% from the previous 4-week average. Funds sold about 26,000 contracts of corn yesterday and are thought to be net long about 167,000 contracts.


Soybean futures are trading moderately higher today after filling gaps on the charts made early this week. Jul beans are up 9-3/4 to 9.13, Aug beans are up 9-1/2 to 9.19, and Nov beans are down 9-3/4 cents to 9.38-1/2. Nov soybeans traded as low overnight as 9.22-3/4, filling the gap made with Monday’s open, and also retesting their 200-day moving average support level. Forecasts are beginning to dry out for parts of the Corn Belt, but IL, IN, and OH are still forecasted for above-normal precipitation. Today is the crop insurance date for the southern two-thirds of IL, as well as IN and OH. Good weather will need to materialize in order to get beans in the ground in those states. Soybean oil is finding buyers on speculation that a 1-billion-dollar buyout diesel tax credit is close to approval in the House of Representatives. Markets are also finding a positive tone ahead of President Trump’s meeting with China’s President Xi next week. The U.S. sold 571,500 tons of beans for the week ending June 13. This is up sharply from last week and up 34% from the previous 4-week average. Funds sold 10,000 contracts of soybeans yesterday and are thought to be net short about 49,000 contracts.


Wheat markets are showing some stabilization today after a negative start to the week. Jul Chi wheat is up 5-1/4 to 5.27-1/2, Jul KC wheat is up 5-1/2 cents to 4.63, and Jul spring wheat is up 1-1/4 cents to 5.42-3/4. Recent wet weather in KS, OK, and NE has kept KC harvest pace slow and the excess moisture in IL and IN is likely to affect quality and yields as harvest moves along. The U.S. winter wheat crop is still rated very highly, so harvest results will be watched closely. Russian wheat is currently $20.00 per ton cheaper than U.S. hard red wheat and $30.00 per ton cheaper than U.S. soft red wheat. Chi contracts have rebounded back above their 10-day moving average levels, similar to the KC contracts that are testing their 10-day moving average levels. Spring wheat futures are trading within very tight ranges today but are still showing good consolidation action. The U.S. sold 187,600 tons of wheat for the week ending June 13. Speculative funds sold 7,000 contracts of Chi wheat yesterday and are thought to be net long about 8,000 contracts.


Cattle markets are soft this morning with Jun lives down 10 cents to 108.40, Aug lives are down 52 cents to 104.02, and Oct lives are down 45 cents to 105.65. Aug feeders are down 97 cents to 135.55 and Sep feeders are down 80 cents to 136.20. Cash trade was noted today in TX at $110, steady with last week. Given the slight bounce in beef values yesterday, the lack of bounce in cash trade is disappointing. Prices briefly tested overhead resistance early this session but have since fallen back below. Upward trendlines are being tested, and given the bear-flag formation, prices could move lower quite easily.


Hog markets are mixed this morning, with Jul hogs down 75 cents to 80.87, Aug hogs are down 17 cents to 82.82, and Oct hogs are steady at 77.45. Yesterday’s closes above the 10-day moving average resistance levels have so far held. Though U.S. pork values have been trending lower, the rally in China pig prices has kept futures somewhat supported. U.S./China negotiations should be restarting soon which is a positive factor. Today’s close will be very important as traders will be watching to see if nearby support levels can hold.



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