TFM Midday Update 12-17-19


Corn futures are attempting to build off of yesterday’s gains, with Mar, May, and Jul all up 1-1/4 cents to 3.89-1/4, 3.96, and 4.01-1/2 respectively. Feed demand domestically continues to be supportive, and China is planning on restarting purchases of ethanol by lifting or waiving trade war tariffs. China also suspended tariffs on U.S. corn starting this week. Mar corn tested its overhead 50-day moving average resistance level yesterday but was not able to close above it. Mar corn is testing that level again today, so far matching yesterday’s highs. The 100-day moving average resistance level comes in about 2 cents after that, but the charts open up on a breach of the 100-day. Speculative funds were thought to have bought about 24,000 contracts of corn yesterday.


Soybean futures are trading moderately higher this morning, extending yesterday’s gains with some impressive buying action. Jan beans are up 5 cents to 9.27, Mar beans are up 4 cents to 9.40, and May beans are up 4 cents to 9.54. Mar soybean oil is up as much as 12% over the past 10 trading days into 18-month highs. Yesterday’s NOPA Crush report came in over 7 million tons below the average trade estimate which is likely limiting some buying interest today. That said, futures are pushing higher in some impressive price action. Mar beans are trading at their highest levels today since November 11 and at the highs of the day. Prices have become overbought according to both Stochastics and Bollinger Bands but the trend is still higher. Speculative funds were thought to have bought about 12,500 contracts of soybeans yesterday.


Wheat markets are higher this morning, with Mar Chi wheat up 5 cents to 5.54-3/4, Mar KC wheat is up 4 cents to 4.66, and Mar spring wheat is up a penny to 5.38. Dry weather in the U.S. Plains and some planting issues in Europe and the Black Sea region are keeping buyers interested after yesterday’s sharp gains. Many traders are also anticipating Ukraine winter wheat seedings down 10% from last year due to dryness. Syria, Taiwan, and Japan have all purchased wheat on export tenders lately. Mar Chi wheat is trading near the highs of the day but has been unable to break through yesterday’s highs, so far making an inside session. Mar KC wheat is trading just off the highs of the day and is continuing yesterday’s path higher. Mar spring wheat tested its 50 and 100-day moving average levels in early trade but has since bounced to near the highs of the day in an inside session. Speculative funds were thought to have bought about 15,000 contracts of Chi wheat yesterday.


Cattle markets are mixed to mostly higher today, with Dec lives up 40 cents to 122.70, Feb lives are up 2 cents to 127.27, and Apr lives are up 12 cents to 128.05. Jan feeders are up 90 cents to 146.15 and Mar feeders are up 87 cents to 146.47. Feb cattle are trading at a very large premium to the cash market currently, but the five-area average went up last week by 25 cents. Beef values were higher at yesterday’s close, stemming the recent downtrend. Yesterday, Feb live cattle were unable to push through Friday’s highs in a possible double-top formation. Prices have not broken lower so far today, but this is the second inside trading session in a row so far. Jan feeders are also making their second inside session in a row and are overbought according to Bollinger Bands and Stochastics.


Hog markets are slightly higher in early trade today, with Feb up 2 cents to 70.52, Apr hogs are up 50 cents to 77.95, and Jun hogs are up 47 cents to 89.55. Pork values were lower at yesterday’s close and have drifted back toward the low end of its 3-week, 4.00-range. The CME Lean Hog Index was also lower keeping buyer interest a bit limited. Still, China’s National New Year and Spring Festival holidays are approaching, and since these are the peak pork eating times of year in China, the government is expected to release more frozen pork reserves and expand imports to meet demand. Feb hogs are trading just off the highs of the day in an inside session so far. Feb hogs are currently in their second inside session in a row though breaking out of yesterday’s range to the topside would be positive technical development. Apr hogs are trading at their highest levels today since November 18 and testing their 100-day moving average level for the first time since November 15.


Carol Tillmann

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

back to TFM Market Updates