TFM Mid-Day Update June 14, 2019


Corn futures are rallying again today, with the nearby Jul contract finally making new highs. Jul corn is up 8-1/4 cents to 4.50-1/4, Sep corn is up 5-1/2 cents to 4.53-1/4, and new crop Dec corn is up 3-1/2 cents to 4.59-1/4. Calendar spreads have been very strong for the past two sessions and have allowed the Jul contract to push through its previous contract highs made on May 29 at 4.45. Buyers in the eastern Corn Belt are having trouble securing supplies, with reports that basis in some areas is moved to 20 or 30 cents over the board. Funds bought about 38,000 contracts of corn yesterday and are thought to be net long about 147,000 contracts.


Soybean futures are moderately higher again today, testing overhead resistance at the 100-day moving average level. Jul beans are up 5 cents to 8.93, Sep beans are up 4-1/2 to 9.06-1/4, and new crop Nov soybeans are up 3-3/4 cents to 9.19. 6-10 and 8-14 day forecasts are still cold and wet leading many to believe that intended soybean acres will be left unplanted, tightening the new crop balance sheet. Late planting also has a good potential to lower yield as the USDA acknowledged for the corn crop on Tuesday’s Supply and Demand report. Chinese buyers are asking U.S. sellers to postpone delivery raising fear of cancellations and providing some pressure currently. Nov soybeans have traded as high this morning as 9.22-3/4, the highest since April 16. Nov has pushed through its 100-day moving average resistance level and is currently testing its 200-day moving average level. A close above this would be the first since April 15. Jul is still working on breaking through its 100-day moving average resistance level. Funds bought 10,000 contracts of beans during Thursday’s session and are thought to be net short about 89,000 contracts.


Wheat markets are mixed this morning, with Jul Chi wheat up 2-1/4 cents to 5.37-3/4, Jul KC wheat is up 3-1/2 cents to 4.71-3/4, and Jul Mpls wheat is down 4 cents to 5.62-1/4. Jul Chi wheat is trading at its highest level this morning since December 20 as excessive moisture in IL, IN, and OH has the potential to impact soft red wheat quality and yield. Higher corn prices are supportive of the wheat markets as corn becomes more expensive to feed livestock. Funds bought about 8,000 contracts of Chi wheat yesterday and are thought to be net long about 8,000 contracts.


Cattle markets are mixed this morning with Jun lives up 12 cents to 109.17, Aug lives are up 37 cents to 105.10, and Oct lives are up 7 cents to 106.22. Aug feeders are down 52 cents to 135.70 and Sep feeders are down 40 cents to 136.10. The live cattle markets are finding buyers on nearby support after tests of 10-day moving average levels this morning. Price action is choppy and without much direction, but the consolidation could be a positive if retail demand could pick up. Meanwhile, higher corn prices are pressuring the feeder markets as cattle become more expensive to feed. Carcass weights are at their lightest levels since January, but weak retail demand has kept a lid on rallies.


Hog markets are mixed in another day of quiet trade so far. Jun hogs are up 12 cents to 79.35, Jul hogs are up 7 cents to 83.45, and Aug hogs are down 7 cents to 82.75. Best traded Jun contract has been unable to push through its 10 and 200-day moving average resistance levels and the Aug contract is now fallen lower after testing its 10-day moving average resistance level. Cash fundamentals may be attempting to stabilize today but we will need to see more follow through before hogs can make a turn higher.



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