TFM Midday Update 10-22-19


Corn futures are trading sideways this morning, with Dec up 1/2 cent to 3.87-3/4, Mar is steady at 3.99-1/2, and May is down 1/2 cent to 4.06-1/4. Just 30% of the U.S. corn crop is said to have been harvested vs 34% expected and 47% for this week on the average year. Corn conditions increased by 1% from last week, seen at 56% good to excellent as of Sunday. The slow harvest pace continues to be supportive, and 6-10 day forecasts are still showing above-normal precipitation and below-normal temperatures. Dec corn futures traded as high as 3.92-1/2 overnight, breaking above their 10-day moving average resistance level. However, futures have fallen back to the lower part of the day’s range and are currently below their 20-day moving average level. Momentum indicators are still pointing lower. Speculative funds were thought to have sold about 10,000 contracts of corn yesterday.


Soybean futures are trading moderately higher today, with Nov up 4 cents to 9.37-1/4, Jan beans are up 4-1/4 cents to 9.51, and Mar beans are up 4-1/4 to 9.63-1/4. Yesterday’s Crop Progress report showed that 46% of the U.S. soybean crop is been harvested vs 64% on average and 42% expected. This is a bit bearish for expectations, but President Trump made comments yesterday afternoon indicating that further progress with China is being made. There were even rumors circulating that the Chinese government is granted waivers for commercial buyers to buy up to 10 million metric tonnes of U.S. beans tariff free. The Nov contract traded as high overnight as 9.45-1/4 but has backed off to the lower half of the day’s range. Prices have tested and held the nearby 10-day moving average support level for the last four sessions in a row. Soybean futures are nearly overbought but the trend is still higher. Speculative funds were thought to have sold about 5,000 contracts of soybeans yesterday.


Wheat markets are choppy this morning, with Dec Chi wheat down 1/4 cent to 5.23-1/4, Dec KC wheat is up a penny to 4.26-1/2, and Dec Mpls wheat is up 3-1/2 cents to 5.41-1/4. Spring wheat harvest as of Sunday was reported at 96% complete vs the average market estimate of 97% complete. Winter wheat plantings were seen at 77% complete, steady with the average market estimate. Russian wheat prices were up 4% last week and Egypt, Turkey, and Jordan are all tendering for a combined 917,000 tons of wheat this week. The U.S. dollar is higher today in some stabilizing action which is bearish for wheat markets. Dec Chi wheat has traded with a wide range today but has settled right around yesterday’s closes. Dec KC wheat tested nearby support at the 10-day moving average and has bounced moderately higher while the spring wheat contracts were stopped at overhead resistance early in the session and have sagged back towards the lows of the day. Speculative funds were thought to have sold about 5,000 contracts of Chi wheat yesterday.


Cattle markets are mixed this morning, with Oct lives down 67 cents to 110.27, Dec lives are down 10 cents to 113.77, and Feb lives are down 7 cents to 119.15. Oct feeders are steady at 143.42 and Nov feeders are up 12 cents to 142.97. Disappointing cash market activity late last Friday have kept prices from surging past nearby resistance, but buyers have been active on breaks. Consumer confidence is moving higher and the trend in beef prices is higher as well. Forecasts for below-normal temps and above-normal precipitation for the next 6-10 days is supportive. Dec live cattle are still consolidating at their 200-day moving average level, currently making their second inside session in a row. Nov feeders are consolidating near their 20-day moving average support level and trade has been quiet and choppy today.


Hog markets are soft this morning, with Dec down 1.57 to 66.25, Feb is down 92 cents to 77.17, and Apr is down 65 cents to 83.75. Pork values have surged to their highest levels since late-August despite massive production levels. This indicates that exports are moving at a very active pace. China’s Spot Pig Price Index is up 199.9% year to date. Still, advances are limited by the futures markets premium to the cash index which is slightly lower today. Dec hogs are trading down and testing their 50-day moving average resistance level, and a close above would be the first since October 7. Feb hogs are currently making a bearish outside day for the second time in just four sessions. Feb and Apr hogs are overbought so a correction may be on the way.


Carol Tillmann

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