TFM Midday Update 11-20-19


Corn futures are trading 1 to 3 cents lower this morning with the Dec contract down 3-1/4 to 3.66-3/4 and Mar down 3 to 3.77-3/4. The corn market continues to grind lower as the market looks for any bullish news to be supportive. Dec corn options will expire Friday, which has a tendency to have markets gravitate towards the area of large open interest which is the 3.60 level. Demand stays as a concern which keeps weight on the corn market, but at these lower price levels, U.S. corn has become more competitive on the global scale as we’ve noted to listed export sales announcements this week.


Soybean futures are currently trading slightly firmer, with the Jan contract up 1-1/2 to 9.13 and Mar up 1-1/2 to 9.26. Despite a less than optimistic view on U.S./Chinese trade negotiations with constant rhetoric back and forth, soybean futures are holding firm at yesterday’s lows. Overall, an improved demand tone has been the same supportive factor, as well as a stronger soybean oil market. Strength in product prices improves crush margins which helps lead to support overall in the bean market. South American weather is staying mostly favorable for crop development, which rallies limited in the short term.


Wheat markets are mixed this morning with the Chi Dec contract up 3/4 cent to 5.12-3/4 and Mar also up 1/4 cent to 5.15-1/2. Deferred contracts are showing at negative trade so far this morning. Dry weather across the western Plains is bringing some support to the U.S. hard red winter wheat market, which is seeing a drop in condition scores over the past couple of weeks. Regardless, global wheat supplies still remain large, and competitiveness on the export front keeps a limit on price rallies.


Cattle markets are currently trading softer this morning with the Dec contract down 15 cents to 118.62 and Feb cattle down 22 cents to 124.82. The cattle market has continued its sideways consolidation trade in the past handful of trading sessions. Cash trade is undeveloped, and will likely develop late in the week. Retail values have stayed supportive, and if those carcass prices trend higher could bring some further push to the upside with the anticipation of higher week-over-week cash.


Hog markets are currently trading lower with the Dec contract down 97 cents to 61.17 and Feb hogs down 1.37 to 68.25. Hog futures did hold support levels yesterday and rallied to a relatively neutral close in Tuesday’s trade, but late afternoon carcass values plummeted over 4.50 per carcass, which brings sellers forward again this morning. A weakness in carcass has trade concerned that U.S. pork supplies could be building due to strong production and demand not quite at the level anticipated. Prices need to hold these key technical levels in this morning’s trade, or charts could turn even more negative to the downside.


Carol Tillmann

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