TFM Midday Update 10-28-19


Corn futures are slightly lower this morning, with Dec down 1-1/4 to 3.85-1/4, Mar corn is down 1-1/4 to 3.96-1/4, and May corn is down a penny to 4.03. Harvest pressure is still noted this week though many areas are expected to see some rain and even snow. Some beneficial rain is expected this week for parts of Argentina, but other areas still remain dry. Demand concerns are still a main focus of the corn market, but U.S./China negotiations appear to be moving in the right direction which could boost exports. Dec corn is currently trading near the lows of the day in relatively quiet trade. Dec corn has stayed within a range of just 2-1/2 cents today and momentum indicators are still pointing lower. Speculative funds were thought to have sold about 4,000 corn on Friday.


Soybean futures are just slightly higher this morning, with Nov up 1-1/2 to 9.21-3/4, Jan beans are up 1-1/4 to 9.35-3/4, and Mar beans are up 1-1/4 to 9.48. China’s Commerce Ministry said overnight that the text of a trade agreement with the U.S. is “basically completed”, a very positive development. Harvest pressure will keep a lid on sharp gains this week more than likely, but forecasts for rain and even some snow are still supportive. South American growing regions have been drier than normal lately, but there are forecasts for beneficial rains later this week. The USDA reported a flash sale this morning of 135,000 tons of soybean cake and meal to the Philippines. Nov soybeans traded as high this morning as 9.26, testing their 20-day moving average resistance level. Sellers quickly swept in and have pushed bean prices down to much more modest gains. Speculative funds were thought to have sold about 11,000 contracts of soybeans on Friday.


Wheat markets are lower this morning, with Dec Chi wheat down 5-3/4 to 5.12, Dec KC wheat is down 4-1/2 to 4.18-1/4, and Dec spring wheat is down 5 cents to 5.31-3/4. Bloomberg is expecting U.S. wheat farmers to plant the lowest number of acres for winter wheat varieties since 1909. Of course, global wheat production has surged since then, but this is still a positive development. Australian weather forecasts still look hot and dry though Argentina wheat growing areas should some beneficial rains this week. Russian wheat export estimates are rising though still below the USDA’s current estimate. Dec Chi wheat is currently trading at its lowest value since October 16, with the next downside target at 5.07-3/4, the 20-day moving average level. Dec KC wheat is trading near the lows of the day, testing its 20-day moving average support level at 4.16-3/4. Dec spring wheat is trading at its lowest value today since October 4, with the next downside target at 5.25, the 50-day moving average level. Speculators were thought to have bought about 2,000 contracts of Chi wheat on Friday.


Cattle markets are mixed to mostly higher today, with Oct lives up 72 cents to 112.70, Dec lives are up 27 cents to 116.35, and Feb lives are up 27 cents to 121.35. Oct feeders are down 20 cents to 145.50 and Nov feeders are up 37 cents to 145.75. Friday’s Cattle on Feed report was seen as neutral, with most numbers coming in directly in line with expectations. Cash trade last week came in 1.00 to 3.00 higher from the previous week and the trend in retail beef values is still higher. The fundamental tone is definitely higher, even with beef production last week up 1% from last year. Recent rallies are keeping cattle in overbought territory, with Dec live cattle today trading at their highest level since May 1. Nov feeders are retesting Friday’s highs and Jan feeders have tested and held nearby support today at the 10-day moving average level.


Hog markets are moderately lower this morning, with Dec down 27 cents to 64.65, Feb is down 32 cents to 73.02, and Apr is down 55 cents to 79.00. The CME Lean Hog Index has been choppy, limiting futures advance. Pork values put in a solid bounce on Friday afternoon, though are still below pork prices from the previous week. The trend in U.S./China negotiations appears to be moving in the right direction, though traders want to see additional exports before taking hog markets significantly higher. The best traded Dec contract is continuing its consolidation today, making an inside day so far. Feb hogs have held the lows from Thursday and Friday of last week and were unable to break through their 50-day moving average resistance level this morning.


Carol Tillmann

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