TFM Midday Update 10-10-19


Corn futures are drifting lower ahead of today’s USDA Supply and Demand report with Dec down 2-3/4 cent sto 3.91-1/2, Mar corn is down 2-3/4 to 4.02-3/4, and May corn is down 2-1/2 to 4.08-1/4. Most are looking for beginning stocks, yield, and exports to come down which should shrink the balance sheet. Winter storms beginning today in the northern Plains are supportive, but they are probably more of a factor in the bean market. The U.S. sold about 285,000 tons of corn for the week ending October 3rd, missing the lowest trade guess for export sales by 215,000 tons. Dec corn has traded within a range today of less than 4 cents, keeping things quiet ahead of the report release. Speculative funds were thought to have sold about 6,000 contracts of corn yesterday.


Soybean futures are mixed to slightly higher today with Nov up 3/4 of a cent to 9.24-1/2, Jan is steady at 9.38, and Mar beans are up 1/4 of a cent to 9.50. Winter storms in the northern Plains starting today through Saturday should keep beans supported during a sharply negative report. High winds, freezing temperatures, and snow coverage will keep traders on their toes. In addition, U.S./China trade negotiations will restart today and China picked up just under 400,000 tons of U.S. beans this morning. The U.S. sold just under 2.1 mmt of beans for the week ending October 3rd, mising the low end of trade expectations. Nov beans have traded as high today as 9.28-3/4 and have held yesterday’s lows, only reaching as low as 9.18-3/4. The inside session today is typical ahead of a USDA report. Speculative funds were thought to have bought about 3,000 contracts of soybeans yesterday.


Wheat markets are mixed this morning with Dec Chi wheat up 1-1/4 to 5.01-1/2, Dec KC wheat is steady at 4.13-1/4, and Dec spring wheat is up 3-1/4 to 5.45. Today’s USDA Supply and Demand report is expected to show minimal, if any, changes to the U.S. and global balance sheets. The underlying tone in the wheat market is still positive with winter wheat prices finding support on rising global export prices, and spring wheat futures are finding buyers on slow harvest, poor quality, and now winter storms this weekend. Dec Chi wheat retested its 100 and 200-day moving average resistance levels this morning, but have since backed off, Dec KC wheat is putting in a very quiety inside session and Dec spring wheat is retesting yesterday’s highs which should open up another run to the 200-day moving average resistance level. Speculative funds were thought to have been net even in Chi wheat trade yesterday. The U.S. sold nearly 522,000 tons of wheat for the week ending October 3rd, coming in near the high end of trade expectations.


Cattle markets are soft this morning with Oct lives down 35 cents to 108.12, Dec lives are down 17 cents to 111.00, and Feb lives are down 47 cents to 116.82. Oct feeders are down 92 cents to 143.57, and Nov feeders are down 90 cents to 133.35. Cash market activity has been very quiet this week though most are expecting a continued advance in a late week trade. Retail beef values appear to be pulling out of year long lows and storms in the Plains this weekend should be supportive as well. Technically, casttle markets are still sharply overbought, especially in the live markets. Dec lives have tested and held nearby support of the 10-day moving average again today, while the Nov feeders have tested overhead resistance at the 200-day moving average level and have since backed off.


Hog markets are mixed this morning with Oct down 10 cents to 62.70, Dec hogs are down 70 cents to 68.77, and Feb hogs are up 7 cents to 76.02. The recent rally in the cash index has been supportive, though futures are still trading at a premium to the cash market vs the normal seasonal discount. This will limit upside in the near term. Technical price action has been choppy today with the best traded Dec contract testing overhead resistance at the 100-day moving average level, and subsequently testing nearby support at the 10 and 20-day moving average levels. Prices are now in between support and resistance and near term direction looks fairly mixed.


Kelly Rubisch

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