TFM Midday Update 10-25-19


Corn futures are choppy this morning, with Dec up a 1/2 cent to 3.87-1/4, Mar is down 1/4 cent to 3.97-3/4, and May is down 1/4 cent to 4.04-1/4. Corn trade has been extremely quiet today, with supply bowls picking up long positions into the late harvest while producer selling on harvest progress is also keeping prices pressured. There are reports that China may be considering tariff waivers for as many as 4-5 million tons of grains which could include U.S. corn, wheat, and sorghum. Export sales yesterday were poor and failed to spark any new buyer interest. Price action today has been very quiet with Dec corn trading within a range of less than 3 cents. A close below the 20-day average level in Dec would be the third in a row, and Dec corn has not been below the 20-day moving average level for three sessions in a row since early September. Momentum indicators are pointing lower and Dec corn could move to 3.77 if near-term support is broken. Speculative funds were thought to have sold 5,000 contracts of corn yesterday.


Soybean futures are drifting lower this morning, with Nov down 4-3/4 to 9.28-1/2, Jan beans are down 4-1/2 to 9.42-1/2, and Mar beans are down 4 cents to 9.54-1/2. China headlines today are somewhat mixed, with reports that China will request the U.S. to cancel existing and planned tariffs on Chinese goods in exchange for more U.S. ag purchases. Traders will be watching headlines today for updates on these negotiations. However, China’s Foreign Ministry labeled Vice President Pence’s comments yesterday about China in his speech as “irresponsible”. Technical price action today has been somewhat sour, with Nov futures falling sharply below their 10-day moving average support level and testing their 20-day moving average support level. Nov beans have not closed below their 10-day moving average since September 27. Speculative funds were thought to have stayed net even in soybeans yesterday.


Wheat markets are mixed to mostly higher today, with Dec Chi wheat up 4-1/4 to 5.20-1/4, Dec KC wheat is up 3-1/4 to 4.22-3/4, and Dec spring wheat is down 2-1/4 to 5.37-3/4. The U.S. dollar is higher today which is a bearish development for the wheat markets and Paris wheat futures may be reversing lower after making 3-month highs. Export sales yesterday were disappointing. Still, active tender activity this week has kept the buyers interested. Dec Chi wheat closed below its 10-day moving average support level yesterday for the first time since September 25 and pushed back above that level this morning. Dec KC wheat has held between its 10 and 20-day moving average levels and Dec spring wheat is currently testing its 100-day moving average support level. Speculative funds were thought to have sold about 3,000 contracts of Chi wheat yesterday.


Cattle markets are higher this morning, with Oct lives up 57 cents to 111.00, Dec lives are up 70 cents to 115.42, and Feb lives are up 60 cents to 120.65. Oct feeders are up 57 cents to 145.80 and Nov feeders are up 92 cents to 145.10. Buyers are active this morning on a positive trend in the retail beef values as well as cash trade in Kansas and Texas that came in 1.00 to 3.00 higher for the week so far. The northern Plains are still showing below-normal temperatures in the 6-10 day forecast though things look to dry out. Dec live cattle made a bearish hook reversal yesterday, and though are positive today, have not taken out yesterday’s highs to strike out the reversal. Nov feeders are retesting their 200-day moving average resistance level for the third session in a row.


Hog markets are choppy to mostly higher today, with Dec down 12 cents to 64.42, Feb is down 15 to 73.62, and Apr is up 60 cents to 80.22. Carcass cutout values continue to slide and this week’s export sales were the lowest since September 12. U.S./China trade relations are at the forefront of traders’ minds today keeping everyone on edge. The CME Lean Hog Index has been choppy lately, keeping a leash on any major bounces. The Dec contract retested its lower Bollinger Band support level for the fourth session in a row this morning and has since bounced towards the upper third of the day’s range. Feb hogs are pushing through their 50-day moving average resistance level today after yesterday’s close below. Momentum indicators are still pointing lower.


Carol Tillmann

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