TFM Midday Update 1-23-20


Corn futures are leading the grains complex higher today, with Mar up 4-1/4 to 3.93, May up 3-1/4 to 3.97-1/2, and Jul up 2-1/4 to 4.01-1/2. Optimism over near term Chinese purchases of corn and DDGs has dwindled lately, but global demand has been good enough to keep prices from washing out. South Korea recently bought 134,000 tons in an optional origin tender and the U.S. should get a sizeable share due to competitive prices. Mar corn futures closed well off the highs yesterday but were still able to hang above nearby support for the third session in a row. Mar corn tested those levels again today and have so far attracted solid buyer interest throughout the morning. Mar corn is currently testing its Bollinger Band resistance level and Stochastics are moving closer to overbought levels. Mar corn has not traded this high since November 5. Speculative funds were thought to have bought about 5,000 contracts of corn yesterday.


Soybean futures are facing a wave of selling so far today, but prices have recovered into the mid-morning. Mar beans are down 4 cents to 9.09-3/4, May beans are down 4-1/4 to 9.23-1/4, and Jul beans are down 4-1/4 to 9.37. Weak crude oil, a lack of fresh China imports, and overall uncertainty due to the Chinese travel restrictions have pushed soybeans lower this morning. There has also been talk of special tariff-free import quotas but has materialized so far. Mar soybeans made their second close in a row below the 200-day moving average support level yesterday afternoon which opened the door for more selling today. Mar beans traded as low as 9.04 but have since recovered to about the middle of the day’s range. Bollinger Band and Stochastics are both showing soybean futures in oversold territory. Speculative funds were thought to have sold about 5,000 contracts of soybeans yesterday.


Wheat markets are mixed to mostly higher this morning, with Mar Chi wheat up 2 cents to 5.79-3/4, Mar KC wheat down 1/4 cent to 4.92-1/4, and Mar spring wheat up 2-3/4 to 5.58-1/4. Nigeria recently bought 400,000 tons of milling wheat and strikes at French railways and ports continue to hamper export activities. An estimated 450,000 tons of grain have been held up due to these strikes. Mar Chi wheat has so far tested its upper Bollinger Band resistance level today but has backed off this trading in the lower third of the day’s range. Mar KC wheat has fallen below nearby support at the 10-day moving average level and Mar spring wheat tested support and is trading higher after making a striking bearish key reversal yesterday. Speculative funds were thought to have sold about 4,000 contracts of Chi wheat yesterday.


Cattle markets are mixed to mostly lower this morning, with Feb lives down 30 cents to 125.87, Apr lives down 50 cents to 126.27, and Jun lives down 32 cents to 118.12. Jan feeders are down 5 cents to 143.87 and Mar feeders are up 5 cents to 143.10. Beef values are still creeping higher which should give some support to the cash cattle markets. Live trade in the country this week has been quiet so far though a few head were sold on Monday steady to slightly lower with last week’s trade. Yesterday’s Cold Storage report was slightly supportive. Apr live cattle are currently trading below their 50-day moving average support level, and while a close below would not be disastrous, Apr lives have only closed below the 50-day two sessions since September 18. Mar feeders tested support at their lower Bollinger Band range and are slightly higher, currently at the middle of the day’s range.


Hog markets are showing moderate gains so far today, with Feb up 1.27 to 68.82, Apr up 1.20 to 75.72, and Jun up 90 cents to 88.00. Pork values are at their highest levels since mid-December and up over 6.00 from their post-Christmas lows. Hog weights are also beginning to pull back which is supportive though yesterday afternoon’s Cold Storage report was slightly bearish. Technical closes yesterday were solid and may be responsible for attracting buyers today. The best traded Apr contract made its first close above its 10-day moving average resistance level since January 2 and is currently testing overhead resistance at the 20 and 50-day moving average levels.


Carol Tillmann

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