TFM Midday Update 7-14-20

CORN

  • July unchanged @ 3.34, September unchanged @ 3.2875, December unchanged @ 3.365
  • Non-threatening weather forecasts
  • Crop conditions came in @ 69% G/EX vs 70% expected
  • US supplies are cheap on world export markets
  • December corn tested the 50-day moving average resistance level early in the session but could not break through
  • Lack of rebound after sharp pressure lately is worrying
  • Funds sold about 32,000 contracts yesterday

SOYBEANS

  • July down 0.15 @ 8.765, August up 0.045 @ 8.785, November up 0.03 @ 8.7825
  • Hot and wet forecasts through July look beneficial for beans, though August weather will be the key
  • Conditions were reported yesterday @ 68% G/EX vs 70% last week (up 6% from the 10-day average)
  • Strong demand tone from China
  • November beans held the 50% retracement of the contract lows and July highs at yesterday’s close
  • November futures are currently testing the 20-day moving average resistance level
  • Funds sold about 12,000 contracts yesterday

WHEAT

  • Dec CHI wheat up 0.0625 @ 5.375, Dec KC wheat up 0.0425 @ 4.65, Dec MPLS wheat up 0.0275 @ 5.3475
  • Egypt is tendering for wheat this week and Russian prices appear the lowest
  • KC wheat harvest is starting to wrap up but CHI still has a ways to go
  • Spring wheat conditions came in @ 68% G/EX vs 70% last week
  • European futures have pulled back from overbought levels
  • CHI, KC and MPLS futures are all consolidating within recent ranges
  • CHI futures are overbought according to stochastics
  • Funds sold about 7,000 contracts of CHI wheat yesterday

CATTLE

  • August lives down 0.40 @ 99.25, October lives down 0.90 @ 103.30, December lives down 0.80 @ 107.57
  • August feeders up 0.05 @ 137.10, September feeders down 0.35 @ 137.25
  • Beef values are at the lowest levels since October 2018
  • Production increase from Q2 to Q3 is expected to be a record
  • Slower than expected restaurant reopenings
  • August lives are testing the 10-day moving average support level, a close below would be the first since June 26
  • August feeders are trading in a tight, two-way range so far and are still overbought

HOGS

  • July hogs up 0.10 @ 46.77, August hogs up 0.30 @ 51.57 and October hogs up 0.35 @ 50.70
  • Cash fundamentals are still choppy due to quickly accelerating production
  • Export pace will need to remain strong in order to carve out a bottom
  • August hogs made their first close yesterday above the 20-day moving average resistance since June 9
  • Prices tested the 20-day moving average level as support and are now trading at the highs of the day
  • October hogs are in more of a consolidation pattern and are nearly overbought

Author

Sam Seid

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