CORN

Corn futures have fallen back to trendline support this morning, with Mar down 4 cents to 3.80-1/4, May down 4 cents to 3.85-1/2, and Jul down 4-1/4 to 3.90-1/4. Coronavirus issues have continued to escalate and this has many worried about Chinese import demand as well as overall global economic impact. Ethanol production for the week ending January 24 was down 1.9% from the previous week but up 1.7% from the same week last year. Ethanol stocks at 24.3 million barrels was up 0.89% from last week and up 1.1% from last year. The U.S. sold 1.23 million metric tonnes of corn for the week ending January 23, up 23% from the previous week and up 99% from the previous 4-week average. This beat the high end of the trade guesses for the week. Jul corn traded as low this morning as 3.89-3/4, holding trendline support from lows on December 11, January 16, and January 27. Speculative funds were thought to have sold about 7,000 contracts of corn yesterday.

SOYBEANS

Soybean futures are taking sharp losses so far this morning, with Mar down 11 cents to 8.82, May down 10-3/4 to 8.96-1/4, and Jul down 10-3/4 to 9.10. Without any news of containment of a Chinese coronavirus, traders are still concerned about slowing China demand in the near term. Meanwhile, traders appear to be content staying on the short side of the soybean market and pushing prices lower. Meal prices are pushing to new contract lows and oil prices are down sharply as well. The U.S. sold about 470,000 tons of beans for the week ending January 23, down 41% from the previous week and down 11% from the previous 4-week average. This total was near the low end of trade expectations for the week. Jul soybeans are trading at their lowest levels today since September 10 with next support coming in at the 9.00 level. Jul soybeans still have a gap on the charts that has not been filled and beans will need to trade down to 8.91-1/2 to fill it. Speculative funds were thought to have sold about 4,000 contracts yesterday.

WHEAT

Wheat markets are sharply lower this morning, with Mar Chi wheat down 10 cents to 5.52-1/4, Mar KC wheat down 6-1/4 to 4.65-3/4, and Mar Mpls wheat down 2 cents to 5.33-3/4. The U.S. dollar is correcting lower today off of recent strength though is still at its highest levels since early December. Coronavirus is still weighing on the grain complex. Russia is planting less wheat than last year, though winter wheat sowings are in much better shape than in recent years. The U.S. sold about 646,000 tons of wheat for the week ending January 23, down 7% from last week but up 49% from the previous 4-week average. Mar Chi wheat is trading at its lowest levels today since January 8 with next support coming in at 5.46-1/2, the 50-day moving average level. Mar KC wheat has tested its 50-day moving average level for the first time since December 12 and Mar Mpls wheat is trading below its 50-day moving average for the first time since December 20. A close below would be the first since December 13. Speculative funds were thought to have sold about 5,000 contracts of Chi wheat yesterday.

CATTLE

Cattle markets are drifting lower this morning under moderate pressure, with Feb lives down 27 cents to 121.47, Apr lives are down 60 cents to 119.62, and Jun lives are down 45 cents to 111.55. Mar feeders are down 25 cents to 134.72 and Apr feeders are down 67 cents to 136.40. Beef prices have stayed mostly steady over the past few sessions and most are not expecting the large supply of beef to come online until Quarter 2. Still, coronavirus is spreading and markets are still trading with a risk-off mentality. Apr live cattle made their first close below the 200-day moving average level yesterday since September 27 and are pushing below that level again today. Apr lives traded at their lowest levels today since October 10. Live cattle are still oversold but the liquidation trend continues. Mar feeders are trading at their lowest levels today since late September though are attempting to stabilize a bit. The U.S. sold just under 22,000 tons of beef for the week ending January 23.

HOGS

Hog markets are trading sharply lower this morning, with Feb, Apr, and Jun all down the 3.00 limit to 61.30, 65.82, and 78.77 respectively. Prices gapped lower on the open today as traders are still worried about the spread of coronavirus delaying Chinese purchases of U.S. pork products. In addition, news yesterday that a vaccine has been developed for African swine fever is negative as well. Pork cutout values are collapsing, with yesterday’s close over 7.00 below last Thursday’s peak for 2020. Average weights are rebounding higher and slaughter numbers are up creating a counter-seasonal jump in production. Apr hogs are trading at new contract lows today and are sharply oversold. The U.S. sold just over 34,000 tons of pork for the week ending January 23.

Author

Carol Tillmann