TOP FARMER MIDDAY UPDATE – September 9, 2019

CORN: Corn futures are drifting lower yet again today, with Sep down 1-1/2 to 3.41, Dec is down 1 cent to 3.54-1/2, and Mar corn is down 1 cent to 3.67-3/4. Forecasts for the next two weeks are still showing above-normal temperatures and above-normal precipitation and early frost concerns are evaporating rather quickly. Corn demand has been dismal lately despite cheap corn getting even cheaper. Thursday’s USDA Supply and Demand report may hold some surprises, but right now, there is just a lack of enthusiasm to own corn. Dec corn traded as low this morning as 3.52-1/4, making a new contract low for the second session in a row. Stochastics are still giving oversold readings and momentum indicators are stalling. As of last Tuesday, speculative funds were net short nearly 120,000 contracts of corn.

SOYBEANS: Soybean markets are lower this morning, falling through longer-term trendline support in a disappointing start to the week. Sep beans are down 5-1/4 to 8.39-3/4, Nov beans are down 4-3/4 to 8.53, and Jan beans are down 4-1/2 cents to 8.67-1/2. Thursday’s Supply and Demand report is the clear focus of the week with the size of this year’s crop still a topic of hot debate. China’s Commerce Minister confirmed high level meetings between U.S. and China teams will take place in early October and there is talk that China may once again offer to purchase U.S. ag goods ahead of talks. Nov beans traded as low this morning as 8.51, falling below near-term trendline support at 8.56. Momentum indicators are quickly turning lower, and with beans falling to their lowest price levels since late May, sharp breaks of support could trigger liquidation or new selling. As of Tuesday afternoon, speculative funds were net short just over 73,000 contracts.

WHEAT: Wheat markets are mostly higher in early trade today, with Dec Chi wheat up 6 to 4.69-3/4, Dec KC wheat is up 2-1/4 cents to 3.95-1/2, and Dec spring wheat is up 3/4 cent to 4.95. Near-term forecasts show heavy precipitation in the northern Plains which will delay harvest and could possibly impact spring wheat quality. U.S. wheat sales and shipments are all together running sharply ahead of last year though Russian wheat prices hit their lowest levels last week since October. Global stocks remain heavy. Dec Chi wheat is currently testing its 20-day moving average resistance level, and a close above would be the first since June 27. A decisive close above this level could trigger some short covering. Dec KC wheat is currently making a bullish key reversal and testing nearby resistance while spring wheat futures have been relatively quiet so far this morning. Speculative funds were net short about 18,000 contracts as of last Tuesday’s close.

CATTLE: Cattle markets are lower again today though have staged a bit of a late-morning stabilization effort. Oct lives are down 30 cents to 94.57, Dec lives are down 25 cents to 99.50, and Feb lives are down 25 cents to 106.15. Sep feeders are down 85 cents to 132.50 and Oct feeders are down 1.55 to 129.35. Cash cattle late last week was disappointing, falling $2-$3 from the previous week. The ensuing technical breakdown was ugly and was continued in early trade today. The best traded Oct live cattle contract traded as low as 93.70, which is the lowest front month live cattle trade since August 2010. Since the break lower, futures have bounced back and are trading nearly even with the day’s open. Technical indicators are giving oversold readings. Oct feeders are still holding their contract lows made August 13, but momentum is still pointing lower.

HOGS: Hog markets are mixed to mostly lower this morning, with Oct hogs up 70 cents to 64.20, Dec hogs are down 85 cents to 61.62, and Feb hogs are down 90 cents to 69.95. Lab tests over the weekend indicated that African swine fever has spread to at least seven villages near Manila the further ASF spreads, the greater the chance for a surge in U.S. exports down the road. July U.S. pork export were the second highest on record with room to grow due to the spreading African swine fever. Friday’s closes below near-term moving average support was disappointing, but still, hogs are cheap especially in the face of the potential for increased exports. U.S./China trade relations appear to be moving in the right direction at the moment, but as we have seen a number of times this year, if relations take a negative turn, we can expect some more pressure in the hog prices.


Carol Tillmann

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