TFM Midday Update 11-18-19


Corn futures are extending losses from Friday, with Dec down 2-1/2 to 3.68-3/4, Mar is down 2-3/4 to 3.78, and May is down 2-3/4 to 3.83-3/4. Weather forecasts for this week are supportive with widespread precipitation expected. Things should turn quiet by Friday, though extended models are also showing precipitation next week. Especially given the warming temperatures, more moisture will keep fields muddy and harvest progress slow. The market is expecting to see 75% to 77% of the U.S. corn harvest down on this afternoon’s Crop Progress report. Poor field conditions in addition to propane shortages and slow drying corn are making it difficult to harvest. Brazil and Argentina have been exporting corn very aggressively though many are expecting this to slow down as supplies dwindle. Technical indicators are still pointing lower and explaining pressure today. Dec corn made its lowest close on Friday since September 27th and has fallen below its 62% retracement of the September to October rally this morning. Stochastics are giving sharply oversold ratings, though buyer interest is hard to come by. The U.S. shipped 637 tons of corn for the week ending November 11 vs 582,000 tons the previous week, and 846,000 tons last year. Cumulative corn shipments are running about 7 mil tons behind last year’s pace, or 59% behind last year’s pace. Speculative funds were thought to have sold about 12,000 contracts of corn on Friday.


Soybean futures are softer this morning with Jan down 4 cents to 9.14-1/4, Mar is down 4 to 9.26-3/4, and May is down 3-3/4 to 9.398-1/2. Last week’s NOPA Crush report was very supportive, with over 175 mil bu crushed vs the average market estimate of 168 mil bu. this is a record for the month of October. U.S. bean harvest is still dragging along with most expecting that 92% to 94% of the U.S. crop will be harvested as of this afternoon’s Crop Progress report. Reports on phase one trade negotiations over the weekend were generally positive with talks labeled as constructive. Despite a generally positive fundamental outlook, the U.S. dollar is lower like causing some pressure. Jan beans held the 50% retracement of the Sep rally last week, and momentum indicators appear to be turning higher. Price action today so far has been mixed, with Jan retesting the 10-day moving average resistance level for the second session in a row and then drifting lower, now towards the 100-day moving average support level. The U.S. shipped 1.53 mil tons of soybeans for the week ending November 14th vs 1.35 mil tons the previous week, and 1.11 mil tons this same week last year. Cumulative shipments are running over a million tons ahead of last year’s pace. Speculative funds were thought to have bought about 3,000 contracts of soybeans on Friday.


Wheat markets are staging a nice recovery with some early pressure this morning, with Dec Chi wheat up 6 cents to 5.08-3/4, Dec KC wheat is up 5-1/4 to 4.22-1/4, and Dec spring wheat is up 1-1/4 to 5.05. The buying action is a bit surprising this morning, with an Egyptian announcement that they have enough wheat reserves to cover five months of usage, as well as weak technical closes last Friday. Export sales on Friday were disappointing. The buying today is likely on U.S. dollar weakness, extending losses from late last week and breaking support. Dec Chi wheat is making a bullish key reversal so far today in an attempt to extend the recent downtrend, Dec KC wheat is testing nearby resistance at the 20-day moving average, and Dec spring wheat is holding in a very quiet range near Friday’s lows. The U.S. shipped 449,000 tons of wheat for the week ending November 14 vs 540,000 tons the previous week, and 510,000 tons this same week last year. Cumulative shipments are running over 2 mil tons ahead of last year’s pace. Speculative funds were thought to have sold about 4,000 contracts of Chi wheat on Friday.


Cattle markets are mixed this morning with Dec lives down 42 cents to 118.67, Feb lives are down 12 cents to 124.85, and Apr lives are up 2 cents to 126.10. Nov feeders are up 2 cents to 146.27, and Jan feeders are up 65 cents to 144.92. Cash traded with an increase of as much as 1.50 last Thursday afternoon, but Friday trade backed off of those highs. Choice beef may have turned the corner lower as well, though Friday’s export sales were the second highest weekly total of the entire year so far. Dec lives are still trading below their 10-day moving average level after falling below last Wednesday.


Hog markets are lower this morning with Dec down 2 cents to 63.17, Feb is down 1.20 to 70.80, and Apr is down 2.02 to 76.95. China’s spot pig prices have extended recent losses lately and were down 5.8% overnight. Last week’s U.S. slaughter was likely an all-time record though trade negotiations with China were seen as positive over the weekend. Dec hogs have traded within a very tight range at the low end of their recent consolidation levels today, while Feb and Apr have extended losses below their recent trading ranges. Feb and Apr both traded at their lowest levels today since September 11th.


Kelly Rubisch

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