TFM Midday Update 9-24-19


Corn futures are down slightly this morning, with Dec down a penny to 3.72-1/4, Mar is down 3/4 of a cent to 3.83-1/2, and May is down 1-1/4 to 3.90-3/4. Crop conditions improved on yesterday’s Crop Progress report. Good to excellent ratings were seen at 57% vs 55% last week, including a 4% increase in IL conditions. Corn dent stage is at 79% vs 96% last year and maturity is at 29% vs 18% last week and 69% last year. Warm and wet weather has been conducive to finishing the crop out. Dec corn has traded within a tight range again today. Dec corn only moved as high as 3.37-1/2 and as low as 3.70-1/4. Prices have held the 10-day moving average support level after a test early in the morning. Speculative funds were thought to have bought about 3,000 contracts of corn yesterday.


Soybean futures have traded in a two-sided choppy range today, with Nov currently up 3/4 of a cent to 8.93-1/4, Jan beans are up a penny to 9.07, and Mar beans are up 3/4 of a cent to 9.17-3/4. Soybean condition ratings were unchanged on yesterday’s Crop Progress report, with 54% of the crop rated good to excellent. Soybeans dropping leaves came in at 34% vs 68% last year. Cooler temps forecasted for the Dakotas and MN over the next week are causing some concern. The Nov contract retested its 10-day moving average support level this morning but has so far held it. Nov beans came within a 1/4 of a cent of matching yesterday’s highs of 8.99-1/4 but have since backed off to more modest prices. Speculative funds were thought to have bought about 9,000 contracts of soybeans yesterday.


Wheat markets are mixed this morning, with Dec Chi wheat down 2-1/2 to 4.80-1/2, Dec KC wheat is down 3/4 of a cent to 4.05-3/4, and Dec spring wheat is up 7 cents to 5.44-1/4. Winter wheat markets are running into technical selling today, with Chi wheat futures momentum turning lower after a number of unsuccessful tests of overhead resistance. Stochastics are also giving a sell signal, crossing back under the 80 point mark. Dec KC futures have briefly tested their 10-day moving average support level but are currently trading just above it. Spring wheat futures is the real wheat story today, with Dec rallying past its 100-day moving average level for the first time since June 28. A close above would be the first since June 27 and could open up additional rally to the 5.60 area. Excessive rains over the weekend in ND and southern Canada are still holding harvest back and damaging quality. Speculative funds are thought to have sold about 2,000 contracts of Chi wheat yesterday.


Cattle markets are mixed to mostly lower this morning, with Oct lives up 7 cents to 101.92, Dec lives are down 37 cents to 107.40, and Feb lives are down 12 cents to 113.97. Sep feeders are down 22 cents to 141.37 and Oct feeders are down 27 cents to 140.97. Yesterday’s Cold Storage report was a bit negative, but the fundamental picture is still supportive overall. Friday’s cattle on feed numbers showed smaller cattle inventory than a year ago for the first time since December 2016. Beef values have been a bit of a drag, but that has been explained by the heavier-than-expected beef inventories on yesterday’s report. Technically, the live and feeder markets are overbought though the technical setup is pointing higher. Dec lives still need to trade as high as 111.17 to close gaps and Oct feeders next resistance comes in at 144.42.


Hog markets are moderately higher today after some solid buying action yesterday. Oct hogs are up 55 cents to 61.50, Dec hogs are up 72 cents to 69.10, and Feb hogs are up 77 cents to 75.90. The cash index continues to trend lower which will limit upside for Oct in the near term. Yesterday’s Cold Storage report was slightly supportive, with the increase in pork stocks coming in lower than normal for the month of August. The best traded Dec hogs contract has traded as high today as 70.10, and near-term resistance comes in at 70.75. Prices may becoming a bit overbought, but solid export data could move things higher.


Carol Tillmann

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