TFM Mid-Day Update June 28, 2019


Corn futures are drifting lower ahead of this morning’s Grain Stocks and Acreage report. Jul corn is down 1-1/4 cents to 4.38-3/4, Sep is down 2-1/4 to 4.43-1/2, and Dec corn is down 2 cents to 4.49. Jul and Sep corn contracts are holding nearby support at the 20-day moving average levels, but Dec has fallen thought its 20-day moving average. Yesterday’s closes above these levels were considered supportive. There are concerns that today’s Acreage report may not be as informative as the market is hoping for. The surveys that the data is based on were taken during the first two weeks of June and considering how late the crop got in, the report may not capture all of the relevant data. We expect further revisions in subsequent Supply and Demand reports. Funds sold about 13,000 contracts of corn in yesterday’s session.


Soybean futures are trading slightly higher this morning, with Jul up 2-3/4 to 8.90-1/2, Sep is up 2 cents to 9.02, and Nov beans are up 1-1/2 cents to 9.13-3/4. Nov beans yesterday made their first close below their 20-day moving average support level since May 23, a negative technical development. Prices have found some stabilizing buyer support today as prices moved back about the 20-day and 100-day moving average levels. The market is not expecting the acreage number to be adjusted today for soybeans as the USDA indicated that they would wait until July to begin making adjustments. Funds sold about 8,000 contracts of soybeans during yesterday’s session.


Wheat markets are mostly lower this morning, with Sep Chi wheat down a penny to 5.45-3/4, Sep KC wheat is down 3-1/4 to 4.78-1/4, and Sep spring wheat is down 5-1/4 to 5.56-1/4. Today’s price action appears to be a bit of risk off selling before a volatile report later this morning. While crop conditions have been decent lately, excess moisture this week has begun to effect the soft red winter wheat areas. Hard red wheat growing areas have had good weather for harvest and this has stretched the already wide winter wheat spread. Yesterday’s price action in all three wheat markets was toppy looking with surges early in the session and then barely positive finishes. Still, nearby support levels are being held so far today. Funds sold about 4,000 contracts of wheat in Chi during Thursday’s session.


Cattle markets are slightly higher in early trade so far today with Jun lives up 1.27 to 111.85, Aug lives are up 15 to 105.50, and Oct lives are up 30 cents to 106.62. Aug feeders are up 30 cents to 136.10, and Sep feeders are up 7 cents to 136.17. Price action so far today has been choppy. The 10 and 20-day moving average levels, resistance from late April until Wednesday have served as strong support today. This is very positive looking chart wise, especially coupled with the double bottom formation. Technicals look solid, but we have not seen the cash or retail beef markets reflect the bullish factors on the charts. So far, Aug live cattle looked to be putting in a bullish reversal for the week. Feeder markets have been choppy, though are not looking quite as positive, especially if corn can keep rallying.


Hog markets are choppy to sharply higher today, with Jul hogs down 67 cents to 73.15, Aug hogs are up 1.92 to 79.10, and Oct is up 1.77 to 73.37. Yesterday’s Hogs and Pigs report was not considered supportive, at least for the 2019 contracts. Still, carcass values seemed to have stabilized and prices are testing some strong overhead resistance in early trade today. China has banned Canadian pork imports, and if some progress can be made between the U.S. and China in G20 meetings this week, there could be some upside potential later.



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