TFM Midday Update 10-17-19


Corn futures have bounced off of nearby support and are trading with slight gains so far this morning. Dec corn is up 3-3/4 to 3.95-1/2, Mar corn is up 3 cents to 4.06-1/2, and May corn is up 3-1/4 cents to 4.13. There is a sense of optimism today regarding the U.S./China trade negotiations as China has confirmed that they will continue to make demand-based purchases of U.S. ag goods. Weakness in the dollar is also supportive today though export competition will continue to be fierce from Argentina as exporters pump out as much grain as possible before their presidential election. A University of Nebraska Ag Professor is estimating a 339 million bushel reduction in corn production from the storms in North Dakota, South Dakota, Minnesota, and Iowa last weekend. Dec corn held its 10-day moving average support level at yesterday’s close, tested this level today, and has since rallied higher. Dec corn has traded as high as 3.97-1/4 and momentum is still pointing higher. Speculative funds were thought to have sold about 4,000 contracts of corn yesterday.


Soybean futures are trading moderately higher today on more China trade optimism as well as a lower U.S. dollar. Nov beans are trading 6-3/4 cents higher to 9.35-3/4, Jan beans are up 7-1/2 to 9.49-3/4, and Mar beans are up 7-1/4 to 9.61-3/4. China and the U.S. appear to be moving closer together on negotiations, with announcements this morning that China will continue to make purchases of U.S. ag goods even before the Phase 1 deal is signed. Brazil soybean prices are at one-year highs due to an impressive export pace. Nov beans back tested their 10-day moving average support level this morning and have traded as high as 9.40-3/4. A positive close today would make a bullish key reversal on the charts and would point to higher prices. Speculative funds were thought to have sold about 5,000 contracts of beans yesterday.


Wheat markets are higher this morning, with Dec Chi wheat up 11 cents to 5.24-1/4, Dec KC wheat is up 5-3/4 to 4.30-3/4, and Dec spring wheat is up 3 cents to 5.53-1/2. Egypt purchased 405,000 tons of wheat yesterday from Russia, Ukraine, and France. Egypt paid about 230.55 per ton, which is about 9.00 per ton higher than last week’s purchases. The U.S. dollar is sharply lower today on the announcement of a Brexit deal. There are still many concerns about the quality and harvest ability of the spring wheat crop after last week’s storms. Dec Chi wheat is punching to its highest prices since July 19 and Dec KC wheat is trading at its highest levels since August 12. Spring wheat futures have tested their 200-day moving average resistance levels but have backed off so far. Speculative funds were thought to have bought about 4,000 contracts of Chi wheat yesterday.


Cattle markets are mixed to mostly lower this morning, with Oct lives down 15 cents to 112.20, Dec lives are up 7 cents to 113.95, and Feb lives are down 22 cents to 119.37. Oct feeders are down 1.20 to 144.02 and Nov feeders are down 1.47 to 144.45. Boxed beef values continue to rally this week, and despite the wide premium of futures markets to the cash markets, many are expecting packers to pay up for cattle this week due to the solid profit margins and smaller show lists. Many are expecting China to be a larger importer of U.S. beef products if the Phase 1 deal can be signed. Strong consumer demand tone is also supportive. Dec live cattle are sharply overbought and are hovering right around their 200-day moving average resistance level. Nov feeders are correcting a bit from overbought levels, testing and holding their 10-day moving average support level so far today.


Hog markets are showing triple-digit losses so far today, with Dec down 1.95 to 68.67, Feb is down 1.25 to 77.60, and Apr is down 1.05 to 83.82. Average carcass weights are slowly increasing, pork values have been choppy, and pork production has been at near record levels. All of these factors are pressure points, but the longer-term outlook for Chinese pork demand is still very supportive. The best-traded Dec contract is retesting support today while the Feb and Apr contracts are correcting out of overbought levels. Hog markets are also trading at too wide of premium to the cash market currently, but the index is rallying.


Carol Tillmann

Sign up to get daily TFM Market Updates straight to your email!

back to TFM Market Updates