TFM Midday Update 10-3-19


Corn futures are trading slightly higher with Dec up 1-1/4 to 3.89. Mar is up 1 cent to 4.00-3/4, and May is up 3/4 cent to 4.05-1/2. FC Stone released a new yield estimate of 169.3 bushels per acre, versus USDA’s 168.2, and this was likely a reason for some of the pressure yesterday. However, corn traders seemed to have shrugged off that estimate for the time being, especially as we look toward next Thursday’s Supply and Demand report. Ethanol production for the week ending September 27 was down 5.62% versus last year, adding to the negative tone. Heavy rains continue to delay harvest, but the 6-10 day forecast are showing below normal precipitation and mixed temperatures for the second week of October. The Dec corn contract held yesterday’s lows at 3.85-1/2 and has since begun to claw its way higher. Prices are currently trading at the highs of the day, though they have not broken through yesterday’s highs yet. Stochastics are giving overbought readings, but the trend still looks higher. The U.S. sold about 563,000 tons of corn for the week ending September 26, near the lower end of trade estimates. Speculative funds were have thought to have about 11,000 contracts of corn yesterday.


Soybean futures are slightly higher this morning after testing nearby support, with Nov up 3-1/4 to 9.17. Jan is up 3-1/4 to 9.31, and Mar beans are up 3 cents to 9.41-1/2. China purchased 252,000 tons of beans this morning from the U.S., helping to stabilize prices after some early pressure. Most of the recent purchases from China have been from private buyers and have come out of the U.S. Gulf instead of the Pacific Northwest. This may negatively impact cash basis in the Dakotas. Excessive rains in many parts of the country have delayed harvest and may be negatively impacting soybean quality. Nov beans tested their 200-day moving average level early in the session but have since rallied higher. Prices have not yet broken through Wednesday’s highs, but a bullish outside day looks possible. The U.S. sold nearly 2.1 million tons of beans for the week ending September 26, near the high end of market estimates. Speculative funds were thought to have sold about 7,000 contracts of soybeans yesterday.


Wheat markets are chippy this morning, with Dec Chi wheat up 2 cents to 4.91. Dec KC wheat is steady at 4.05-3/4, and Dec spring wheat is down 1-1/4 to 5.28-1/4. Energy and equity negativity yesterday spilled over into the wheat market despite the Egyptian tender. Dryness in Argentina wheat growing areas is still a concern, but the northeastern portions have seen rain over the past few days. Northern Plains and Canadian prairies should see friendlier weather next week to wrap up harvest. Dec Chi wheat tested its 10-day moving average support level today and has since bounced higher. Dec KC wheat has fallen below its 20-day moving average support level and is attempting to break back above, while the Dec Mpls wheat trades in a choppy inside session so far. The U.S. sold about 329,000 tons of wheat for the week ending September 26, near the low end of trade expectations. Speculative funds were thought to have sold about 5,000 contracts of Chi wheat yesterday.


Cattle markets are slightly higher this morning, with Oct lives up 40 cents to 106.45. Dec lives are up 12 cents to 110.75, and Feb lives are up 17 cents to 116.97. Oct feeders are up 17 cents to 142.25, and Nov feeders are up 35 cents to 142.02. Cattle futures prices are overbought, but cash cattle trade early this week has been above last week, but beef prices have been choppy. The ability of cattle markets to stay supported despite stock market volatility is also very impressive. The best traded Dec live cattle contract saw some selling pressure early in the session but has since come back to near where it opened. Prices have matched yesterday’s highs but have not been able to break through them. Nov feeders also sold off early in the session but have recovered most of the early losses.


Hog markets are choppy this morning, with Oct up 70 cents to 62.90. Dec hogs are down 15 cents to 68.95, and Feb hogs are down 40 cents to 75.42. The cash index is higher again today, while the pork cutout values closed lower. Slaughter this week is running sharply ahead of last week, which is likely keeping the pork product prices under pressure. Weights are also up from last week and from a year ago. The large premium of Dec hogs to the cash index versus a normal seasonal discount is the main factor currently keeping a lid on rallies. Dec hogs have tested both their 10-day moving average resistance level and their 20-day moving average support level today but remain in a choppy range.


Lisa Heder

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