TFM Midday Update 1-17-20

The CME and Total Farm Marketing offices will be closed Monday, January 20, 2020 in observance of Martin Luther King Jr.


Corn futures are punching higher in a decent recovery so far with Mar up 7-1/2 cents to 3.82, May is up 6-3/4 to 3.89-1/4, and July is up 6-1/4 to 3.95-1/4. The Senate approved the USMCA deal yesterday which is a positive sign, and there is increasing talk that Brazil will need to import corn over the next few months due to their unusually strong export pace this summer. Brazilian corn prices have rallied sharply since making a low in September. Mar corn futures have pushed through nearby resistance at the 50-day moving average level and are currently testing their 10-day moving average resistance level. Today is still an inside session and is technically not a reversal at this time. It seems likely that traders are trying to bottom pit this market as contracts are still not far away from harvest lows. Speculative funds were thought to have sold about 40,000 contracts of corn yesterday.


Soybean futures are trading very slightly higher today with Mar, May, and Jul all trading 2 cents higher to 9.26, 9.39-1/4, and 9.52 respectively. Sellers were active early on this morning as many are still skeptical that China will need their $36.5 billion of promised ag purchases this year. The market was also disappointed about a lack of detail about soybean purchases in particular. Palm oil futures are sharply lower today, also a negative. Technical action has been impressive though with futures testing and holding nearby support at the 200-day moving average in the Mar contract today. This is the second successful test in a row. Beans are technically oversold, so if prices can hold in current levels into the weekend, this could attract technical buying. Speculative funds were thought to have sold 7,000 contracts of soybeans yesterday.


Wheat markets are higher this morning with Mar up 3-1/4 cents to 5.68-1/2, Mar KC wheat is up 4 cents to 4.88-3/4, and Mar spring wheat is up 5-1/2 cents to 5.55-3/4. The current wheat trends are still higher, and with all U.S. wheat stocks at a 5-year low and U.S. SRW stocks at a 12-year low, fundamentals are still pointing higher. Talk of Russian export quotas is also supportive as cash prices across the globe are rallying as well. Mar Chi wheat tested and held nearby support yesterday at the 10-day moving average and are so far trading at an inside session. Mar KC wheat tested and held nearby support at the 20-day moving average and has punched back above its 10-day moving average resistance level this morning. Mar spring wheat tested support at the 20 and 200-day moving average levels and has moved back above its 10-day moving average level. Speculative funds were thought to have sold about 6,000 contracts of Chi wheat yesterday.


C attle markets are mixed this morning with Feb lives down 7 cents to 126.05, Apr is up 42 cents to 126.85, and Jun lives are up 12 cents to 118.97. Jan feeders are down 5 cents to 145.37, and Mar feeders are up 12 cents to 144.95. Cash trade so far this week has been mostly steady with the high end of last week’s range and beef values are continuing their slow move higher. The U.S. is selling beef at the fastest pace on record this year and last week’s export sales total was the highest since mid-November. Feb live cattle tested and held their 50-day moving average support level yesterday after a sharp selloff early in the day. Prices fell below that level again today, but have since bounced back higher. Mar feeder cattle have shown similar price action, testing and holding the 50-day moving average support yesterday, and again this morning.


Hog markets are moderately higher today so far, with Feb up 57 cents to 67.45, Apr is up 12 cents to 73.90 and Jun is up 7 cents to 86.62. Carcass values are beginning to stabilize and the cash index has been higher for the past three days. Last week’s export sales total was the highest since November 14th and China is expected to increase purchases of U.S. pork not that the phase 1 deal is signed. Feb hogs have made their 4th test of the 10-day moving average resistance level this morning, but is still yet to break through it with much determination. Apr hogs also made their 4th unsuccessful test of the 10-day moving average this morning and Jun futures have fallen back below their 10-day after opening above.


Kelly Rubisch

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