TFM Midday Update 10-24-19


Corn futures are slightly lower this morning, with Dec down 1-1/4 to 3.86-1/2, Mar is down 1-3/4 to 3.98, and May is down 1-3/4 to 4.04-1/2. Corn export sales this morning were solid, with 492,000 tons of corn reported sold for the week ending October 17. This is up 33% from last week and up 15% from the previous 4-week average, and came in about the middle of trade estimates. The weekly Ethanol Production report for the week of October 18 was slightly positive, with production up and stocks lower. The market is still looking for harvest reports, the November WASDE, and further U.S./China negotiations for direction. Dec corn futures tested their overhead 10-day moving average resistance level this morning but have since backed off and fallen below their 20-day moving average level. Momentum indicators are pointing lower, and if trade keeps moving lower, we could see a retest of the 3.77 price area. Speculative funds were thought to have bought about 4,000 contracts of corn on Wednesday.


Soybean futures are very slightly higher this morning, with Nov up 1-3/4 to 9.35-1/2, Jan beans are up 1-1/4 to 9.49-1/2, and Mar beans are up 1-1/2 to 9.61. Export sales data released this morning was very disappointing, with net sales of just 475,000 tons reported for the week ending October 17. This was down 70% from last week and down 72% from the previous 4-week average. This week’s total barely reached half of the low end of trade estimates for weekly sales totals. Still, there is optimism about U.S./China negotiations and China purchased 264,000 tons of U.S. beans this morning. Brazilian weather is improving over the next week, with forecasts of an inch or more expected for most of the growing region. Nov soybeans have held nearby support at the 10-day moving average all session today, and are trading about halfway up the day’s range. Despite a number of weak closes in a row, the trend still looks to be higher. Speculative funds were thought to have bought about 8,000 contracts of beans yesterday.


Wheat markets are down this morning, with Dec Chi wheat off 3-1/2 cents to 5.17-1/4, Dec KC wheat is down 2-1/4 cents to 4.21, and Dec spring wheat is down 4-1/2 cents to 5.37-3/4. The U.S. sold about 262,000 tons of wheat for the week ending October 17, down 34% from last week and down 31% from the previous 4-week average. Wheat sales did not meet the low end of market expectations for this week. This is disappointing, especially given the sharp correction lower in the U.S. dollar index over the past week. Russian wheat offers are up over 5% this week and Paris wheat futures are at 3-month highs. Dec Chi wheat is testing and holding its 10-day moving average so far today, Dec KC wheat has fallen below its 10-day moving average level, and Dec spring wheat is trading at the lows of the day, just below its 100-day moving average support level. Speculators were thought to have bought about 4,000 contracts of Chi wheat yesterday.


Cattle markets are mixed to mostly lower this morning, with Oct lives up 60 cents to 110.80, Dec lives are down 22 cents to 115.02, and Feb lives are down 35 cents to 120.07. Oct feeders were up 17 cents to 145.20 and Nov feeders were down 70 cents to 144.05. The monthly Cold Storage report showed a larger-than-average decline in beef stocks for both the month and the year, a positive development. Cash trade has also begun to trickle higher this week, with trade in Kansas and Texas up 1.00 from last week’s highs. Still, prices may be a bit hesitant to move too much higher after yesterday’s surge. Cattle markets have been overbought for a number of weeks, and traders will likely look for more confirmation of cash in beef strength to take futures to another leg higher. Dec live cattle are trading at a very tight range today, at this point unwilling to compound yesterday’s gains. Nov feeders were unable to break through their 200-day moving average resistance level yesterday and have fallen a bit off of that line today.


Hog markets are lower again this morning, with Dec down 45 cents to 65.37, Feb is down 82 cents to 74.27, and Apr hogs are down 1.22 to 80.40. Pork values have begun to correct from their recent rally, and prices are now at their lowest level since early October. Increasing weights and extremely high slaughter numbers have overwhelmed domestic demand with excess pork supplies. Export sales this week were nothing to write home about despite China’s national average pig prices up nearly 14% for the week so far. The best traded Dec contract retested its 50-day moving average resistance level for the second session in a row today but has since backed off. Feb hogs retested their 50-day moving average support level this morning and have bounced higher, but are still trapped below their 100-day moving average resistance level.


Carol Tillmann

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