TFM Midday Update 9-13-19


Corn futures are up slightly at midday today, with Dec corn up 1-3/4 to 3.69, Mar corn is up 1-3/4 to 3.81-1/2, and May corn is up 1-1/2 cents to 3.90-1/2. Yesterday’s USDA supply and demand actually raised the corn stocks to usage ration by .1%, but since the market reversed higher, the bearishness was already priced in. The outside session was impressive, especially considering the Dec contract made its first close above the 20-day moving average since July 12. Weather continues to be a mixed bag, with northern states receiving cooler than normal temperatures, but above normal precipitation and some of the more southern areas receiving hotter than normal temperatures and above normal precipitation. The Dec corn contract has been trading fairly choppy today, with highs at 3.72-1/4 and lows at 3.65-1/2. A close today above 3.66 would be the second in a row above the 10 and 20-day moving average resistance levels and prices look poised to make bullish key reversals on the weekly charts. Speculative funds were thought to have bought about 19,000 contracts of corn yesterday.


Soybean markets are finding solid buying action today with Nov beans up 6-3/4 to 9.02, Jan beans are up 6-1/2 to 9.15-1/2, and mar beans are up 6-1/2 to 9.27-3/4. China had purchased 204,000 tons of soybeans  today and some are estimating that total purchases over the past two days have reached between 1 and 3 mmt. Officials also confirmed that punitive tariffs put on during the trade war on U.S. soybeans would be exempted. Though China’s soybean demand is much smaller than it was a year ago, a lack of tariffs is absolutely a positive development. Yesterday’s supportive Supply and Demand report pushed Nov soybeans to their highest close since July 29 and their first close above their 50 and 100-day moving average levels since July 19. Follow through today has been impressive so far with current bean prices at the highs of the day so far. Soybean futures look poised to make a bullish outside week. Speculative funds were thought to have bought about 18,000 contracts yesterday.


Wheat markets are higher again today with Dec Chi wheat up 4 cents to 4.87-3/4, Dec KC wheat is up 3 cents to 4.06-1/2, and Dec spring wheat is up 1/2 of a cent to 5.07-3/4. Yesterday’s Supply and Demand report was not especially supportive with the global data set showing new record world ending stocks. Still, the momentum is pointing higher i the wheat markets and potential production issues brewing in South America are supportive. Dec Chi wheat is testing its 50-day moving average resistance level for the first time since July 19, Dec KC wheat is trading at its highest levels since August 12, and Dec spring wheat is attempting to make its second consecutive close above its 20-day moving average level for the first time since mid-June. Speculative funds were thought to have bought about 4,000 contracts of Chi wheat yesterday.


Cattle markets are mixed in quiet and choppy trade this morning with Oct lives up 5 cents to 98.77, Dec lives are down 2 cents to 104.92, and Feb lives are up 22 cents to 111.42. Oct feeders are up 55 cents to 135.05 and Nov feeders are up 37 cents to 134.27. Cash cattle trade so far this week has come up off of the early week lows by about 2.00. Dressed weights are unchanged from last week and are sharply off of the 5-week average, proving to traders that feedlots are indeed staying current. Still, beef prices are at their lowest levels since mid-August. Oct live cattle are holding onto their nearby support at the 20-day moving average level. 20-day moving average has been stiff resistance since prices fell below it toward the end of July. Oct feeders are not making any sharp moves higher, but the continuation of the recent uptrend is impressive.


The markets are up sharply this morning with Oct up 3.30 to 66.42, Dec hogs are up 4.50 to 68.70 and Feb hogs are up 4.50 to 75.10. Pork values are at their lowest values since the middle of March, but news that China has begun inquiring about U.S. pork yesterday was friendly. This morning, China announced that punitive tariffs put on U.S. pork during the trade war would be exempted and this has increased expectations for exports in the near term. The Dec lean hog contract is lock limit higher and its highest value since August 1.


Kelly Rubisch

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