TFM Midday Update 10-18-19


Corn futures are currently trading softer as Dec is down 2-3/4 cents to 3.92 and Mar is down 3 to 4.03-1/2. Despite strength seen in the other grain markets, which may be putting some buying support underneath the corn market, another round of weekly disappointing export sales weighs on top of corn prices today. For the week ending October 10, corn export sales were at 14.5 million bushels and shipments at 21.9 million bushels. Both are below the necessary totals needed to achieve the USDA’s export target at 1.9 billion bushels for the 2019/20 marketing year. Despite the U.S. dollar trending lower, U.S. corn prices on the global scale are still relatively high vs our export competitors. Prices in Dec are holding around the 10-day moving average and have been consolidating this week after last week’s strong move higher.


Soybean futures are trading 4 to 5 cents higher with the front month Nov bean up a nickel to 9.36-1/2, and Jan beans are up 5 cents to 9.50-1/4. Export sales for the week of October 10 stayed relatively strong at 58.8 million bushels for the 2019/20 marketing year. In addition, shipments were at 35.1 million bushels for the week, which are both ahead of the targets needed to reach the USDA’s export estimate. With the crop still questioning damage from last week’s strong winter storm across the norther tier, bean futures have challenged technical support this week, only to hold and are poised to possibly finish the week with steady to mild gains.


Wheat futures are currently trading stronger in the Chi contract, up 2 to 3 cents, with the Dec contract up 3-1/4 to 5.28-3/4. Other wheat classes are mixed in trade today with slight strength seen in KC hard red winter and weakness in the hard red spring wheat. Export sales were within expectations for last week at 14.5 million bushels and weekly shipments at 18.8 million bushels, which is slightly above the necessary pace to reach the USDA’s export targets. Additional buying strength may be moving into the wheat market as charts look favorable technically, as a reduction by Australian Ag Ministry bringing their estimated wheat crop down from 20 million metric tonnes to 15.5 million metric tonnes due to difficult weather this spring for their planting.


Cattle markets are currently trading with triple-digit losses as Oct cattle is down 2.10 to 110.30 and Dec down 1.47 to 112.87. The cattle market may be seeing some profit taking after a strong run higher this week. Another week of disappointing export sales also adding selling pressure, as net sales were 13,000 metric tonnes for last week, down mostly from previous averages. The main focus in the live cattle markets will be cash trade, which is relatively undeveloped but is forecasted to be steady to slightly higher on a week over week basis. The Oct market is starting to push a premium to the cash prices, which may be a short term limiting factor with a market that is now rallied on a pretty steady clip since its September lows and may be due for some long liquidation.


Hog markets are currently trading lower, with  Dec down 1.75 to 67.07 and Feb hogs are down 22 cents to 77.42. The hog market may be posting a “sell the news” vs “buy the rumor” mentality as weekly export sales and shipments hit marketing year highs. Last week’s export sales of pork were 292,200 metric tonnes with Mexico and China being our top two customers. Export shipments were also aggressive at 210,900 metric tonnes, also a marketing year high with Mexico receiving 135,000 metric tonnes. While those sales have stayed aggressive, overall weekly pork slaughter has stayed at aggressive levels, keeping pressure on front month contracts with ample supplies of pork available in the short term.


Carol Tillmann

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