TOP FARMER MIDDAY UPDATE – September 6, 2019

CORN: Corn futures are soft today and moving into new contract lows yet again. Sep corn is down 1-3/4 cents to 3.44-3/4, Dec corn is down 4 cents to 3.54-3/4, and Mar corn is down 3-1/2 cents to 3.68-1/4. A poor perception of demand is still a major hurdle of the corn market currently. Ethanol production for the week ending August 30 was down 2.41% vs last week and down 6.81% vs the same week last year. Total ethanol production for the week was seen at 7.091 million barrels, the lowest weekly total since April 5. There is talk that the Trump Administration has developed a plan to boost U.S. renewable fuel blending quotas by 5% in 2020 though an official announcement and details are forthcoming. The best traded Dec corn contract is trading just off of its lows of the day after another night session with very slight gains. Despite a lack of farmer selling, speculative traders are in the driver seat pushing prices lower. The U.S. sold about 417,000 tons of new crop corn for the week ending August 29, missing the low end of the range of market estimates. Managed money sold about 6,000 contracts of corn yesterday.

SOYBEANS: Soybean are drifting lower after yesterday’s disappointing session. Sep beans are down 2 cents to 8.47-3/4, Nov beans are down 4 to 8.57-1/4, and Jan beans are down 4 cents to 8.71-1/2. U.S. and China high level trade talks have been pushed back to early October which is seen as a negative force. Private crop estimates are beginning to come down from the USDA’s current 48.5 bushels per acre yield estimate. Soybean meal futures made bearish outside sessions yesterday, adding to the sour technical picture. Soybean futures break below the 10 and 20-day moving average levels after a solid close above them on Wednesday looks bearish and momentum indicators have turned lower. The U.S. sold just over 69,000 tons of old crop beans for the week ending August 29 and just over 788,000 tons of new crop beans for the same week. These numbers are near the high end of expectations and the lack of buying interest on the data is concerning. Speculative funds were thought to have sold about 9,000 contracts of soybeans yesterday.

WHEAT: Wheat markets are lower today in a bit of correction of the jump in the past two sessions. Dec Chi wheat is down 5 cents to 4.61-1/4, Dec KC wheat is down 2-3/4 to 3.91, and Dec Mpls wheat is down 5-3/4 to 4.96-1/4. The U.S. dollar is choppy to lower this morning, but some pressure is seen from the Argentine Agriculture Ministry raising their wheat production estimate to a record 21 million tons vs 19.5 million tons last year. The European Commission also raised their 2019 soft wheat crop to 142.7 million tons, nearly a percentage point above the July estimate and the largest production in four years. The EU stockpiles are expected to be 6.6% higher over the previous estimate. Dec Chi wheat was stopped yesterday at its overhead 10-day moving average resistance level and sellers have stepped back in today though prices are still within yesterday’s range. Dec KC wheat has had a quiet session, drifting a few cents lower and Dec spring wheat tested its 10-day moving average resistance level but was unable to break through it so far. The U.S. sold 312,000 tons of wheat for the week ending August 29, missing the low end of trade estimates. Speculative funds were thought to have bought about 3,000 contacts of Chi wheat yesterday.

CATTLE: Cattle markets are soft this morning, with Oct lives down 1.45 to 96.42, Dec lives are down 1.02 to 101.20, and Feb lives are down 1.02 to 107.37. Sep feeders are down 1.07 to 133.32 and Oct feeders are down 1.42 to 130.90. Soft retail beef and cash cattle prices are the main thorn in the cattle market’s side today. Average weights are running below last year’s levels and the average weights which is positive, but still, traders are mainly concerned about the possibility of market-ready supplies backing up in the country in the near term. Oct and Dec cattle made new lows yesterday and are pushing further lower today. Stochastics are giving oversold readings but that does not mean cattle cannot slide further. Momentum indicators are still pointing lower. Feeder markets are still in their consolidation range and moving towards the lower end of it. The U.S. sold just over 18,000 tons of beef for the week ending August 29, up 31% from last week and up 5% from the previous 4-week average.

HOGS: Hog markets are sharply lower this morning, with Oct down 1.70 to 64.60, Dec hogs are down 2.00 to 63.47, and Feb hogs are down 2.17 to 71.67. Cash fundamentals continue to move lower despite China’s increased export activity so far this year. The real China pork imports are not expected until later this year. Much of today’s selling appears to be technical in nature as Dec and Feb contracts came into today’s session overbought and end of the week profit taking seems somewhat likely. Oct hogs are holding their nearby 20-day moving average support level and Dec and Feb contracts are holding their 10-day moving average support levels. U.S. sold nearly 18,000 tons of pork for the week ending August 29, down 38% from last week and down 13% from the previous 4-week average. China accounted for 1,400 tons of those sales.


Carol Tillmann

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