TFM Mid-Day Update June 5, 2019


Corn futures are trading moderately lower today, finding sellers on yesterday’s disappointing price action. Jul corn is down 7 cents to 4.18-01/4, Sep corn is down 7 cents to 4.27-3/4, and new crop Dec corn is down 7 cents to 4.37. Much of this selling today is likely technical in nature, after traders failed to push corn past recent highs yesterday despite the positive Crop Progress report. Corn prices fell lower overnight, testing and holding their nearby 10-day moving average support levels. A lack of widespread planting progress, especially as we reach the last of the prevent plant dates, is keeping some buyer support intact. Funds bought 6,000 contracts of corn yesterday and are thought to be net long about 27,000 contracts.


Soybean futures are trading moderately lower today, finding sellers on continued thoughts of increased soybean acres, along with weakness in the rest of the grain complex. Jul beans are down 7-1/4 cents to 8.74-1/2, Aug beans are down 7-3/4 cents to 8.81, and new crop Nov soybeans are down 7-1/2 cents to 9.01-3/4. Wet weather has begun to shift South, and now that corn insurance planting dates have almost all arrived, increased bean plantings could become an issue. Still, most field conditions are not perfect and there are spotty rains in the forecast for the next week. 8-14 days forecasts are showing below normal temperatures and above normal precipitation. Nov soybeans tested their overhead 100-day moving average level yesterday for the first time since March 22, but were unable to break thought it. Prices have found sellers again today, but are still trading about half way up the day’s range. Funds bought about 8,000 contracts of soybeans yesterday and are thought to be net short about 92,000 contracts.


Wheat markets are taking heavy losses today, with Jul Chi wheat down 10-1/4 cents to 4.97, Jul KC wheat is down 15 cents to 4.53-1/2, and Jul spring wheat is down 4-3/4 cents to 5.55-3/4. Bearish key reversals in the winter wheat markets yesterday make wheat an easy sell for technical traders today. The bearish surprise on the Crop Progress report had winter wheat conditions improving despite very heavy rains across the KC wheat growing areas. Dryer forecasts ahead in KS and OK should help further improve conditions. Jul Chi wheat has tested its 10-day moving average support level today, but is holding so far. Jul KC wheat is currently trading below its 10 and 100-day moving average levels. Jul KC wheat has not traded below that level since May 16 and has not closed below that level since May 13. Funds sold about 8,000 contracts of Chi wheat yesterday and are thought to be net short about 24,000 contracts.


Cattle markets are higher today, finding some light follow though buying on yesterday’s recovery. Jun lives are up 52 cents to 108.07, Aug lives are up 1.00 to 105.02, and Oct lives are up 85 cents to 105.65. Aug feeders are up 1.25 to 138.70, and Sep feeders are up 1.02 to 138.90. Cash trade news this week has been negative and retail beef prices have been choppy. Still, it appears that traders are more comfortable buying cattle futures as prices have begun to recovery out of oversold levels. China has suspended Brazil beef imports recently, though most are expecting the ban to be lifted relatively soon.


Hog markets are choppy to lower this morning, with Jun down 1.17 to 79.95, Jul hogs are down 30 cents to 85.50, and Aug hogs are steady at 85.47. The nearby Jun contract continues to selloff as traders move out of long positions and into deferred months. Jul and Aug contracts have both tested and held their nearby 200-day moving average levels again. This is a positive sign, as it may be signaling that hog prices are beginning to stabilize and build a base. Hog futures are currently pricing in a lower than normal increase in cash hog trade, so strong retails should help support if export news remains bullish.



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