TFM Mid-Day Update June 21, 2019


Corn futures are trading moderately lower today in some position taking ahead of the weekend. Jul corn is down 2-1/2 to 4.47-1/2, Sep corn is down 2-3/4 to 4.52, and new crop Dec corn is down 3-1/4 to 4.57-3/4. The 6-10 day weather forecasts are beginning to warm up and looks dryer, but the 8-14 day forecast is more rain centered over IL, IN, and OH, and the 30-day forecast has cool and wet temperatures for the center of the Corn Belt. The Jul Dec spread is up 1-1/4 today, following the recent trend showing that end users are actively looking for corn in the country. The recent test of 10-day moving average support lines have been successful and best supported. Price action today has been choppy though near term direction still looks higher. Funds bought 19,000 contracts of corn yesterday and are thought to be net long about 186,000 contracts.


Soybean futures are trading moderately lower so far today, with Jul down 8 cents to 9.07-1/2, Sep is down 8-3/4, and new crop Nov soybeans are down 9-1/4 to 9.31-3/4. Near term forecasts look as though planting activities will progress, but longer term forecasts move towards above normal precipitation again. Technical price action yesterday was impressive, with soybean futures filling recent gaps, testing and holding nearby support levels of the 200-day moving average and closing with a bullish outside day. Sellers seem to be active today on some risk off mentality going into the weekend and  before what could be a volatile week due to futures first notice day and grain stocks and acreage on Friday. Funds bought 10,000 contracts of soybeans on Thursday and are thought to be net short about 39,000 contracts.


Wheat markets are soft this morning, with Jul Chi wheat down 3/4 of a cent to 5.25-3/4, Jul KC wheat is down 3-3/4 to 4.56-3/4, and Jul spring wheat is down 1 cent to 5.37-1/4. Winter wheat yield estimates are beginning to creep higher despite the excessive moisture lately, particularly over the soft red growing areas. Successful tests of nearby support levels yesterday were supportive, but trade has been slow and choppy so far today. Dry forecasts for the hard red growing areas should allow harvest to pick up over the next week or so. Jul Chi wheat is currently trading directly below its 10-day moving average support level and the Jul KC contract made an unsuccessful test of its 10 and 20-day moving average resistance levels. Jul spring wheat is holding its 50-day moving average support level. Funds bought 5,000 contracts of Chi wheat yesterday and are thought to be net long about 13,000 contracts.


Cattle markets are showing mostly triple digit loses in disappointing early trade today. Jun lives are down 67 cents to 107.50, Aug lives are down 1.05 to 102.90, and Oct lives are down 95 cents to 104.62. Aug feeders are down 1.02 to 133.67, and Sep feeders are down 1.32 to 134.05. Prices quickly surged lower this morning with the best traded Aug live cattle contract making new lows at 102.05. Retail and cash values are slipping, and though corn is not up today, the corn rally has pressured the feeder markets. Slow placements lately will help keep future production lower, but there is just not enough retail demand to spark any buying interest here. This afternoon’s Cattle on Feed report is expected to come in on the lighter side, though traders are apparently not very confident in what that report will bring.


Hog markets are sharply lower this morning with Jul down 2.57 to 76.67, Aug hogs down 3.00 to 77.90, and Oct hogs are down 2.80 to 72.92. Aug hogs are locked limit lower, sitting at their lowest value since March 4. Pork demand has been dismal lately and this past week’s export sales to China were a net negative 75 tons. The U.S. and China may be restarting negotiations on a trade deal, which would be supportive, especially considering spot pig prices are up 11.4% for the week. Still, extremely heavy production and much slower than normal demand make hogs an easy sell.



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