TFM Midday Update 10-8-19


Corn futures are trading with some strength early today with Dec up 6-1/2 to 3.93-1/2, Mar corn is up 5-1/4 to 4.04-1/4, and May corn is up 5 cents to 4.09-1/2. Yesterday’s Crop Progress report was considered supportive with corn harvest just 15% complete vs 11% last week and the average market guess of 19%. Harvest is 34% complete for the same week last year. Large amounts of snow are expected later this week in the Dakotas and MN with forecasts calling for up to 40″ in some areas. Wind speeds may reach up to 40 or 50 mph, and this could severely damage many fields and any chances for late planted corn to mature. Headlines out of U.S./China trade negotiations are quiet so far today, but the market appears to be battling some negative expectations. Dec corn has pushed through the recent highs made on October 1st and is extending gains out of its latest bull pennant continuation pattern. Markets are technically overbought, but the trend is higher. Speculative funds are thought to have bought about 6,000 contracts of corn yesterday.


Soybean futures are strong so far this morning with Nov up 6-1/2 to 9.21-3/4, Jan is up 7 to 9.36-1/2, and Mar beans are up 7-3/4 to 9.48-1/4. Details regarding U.S./China trade negotiations are so far light today, but weather concerns in the northern Plains and a supportive Crop Progress report are keeping buyers interested today. Soybean fields yet to be harvested in MN and the Dakotas will be at risk of severe damage later this week with heavy snow and high winds beginning Thursday. Soybean harvest was said to be just 14% complete on yesterday’s Crop Progress report. The average trade estimate was 15%, and soybean harvest was 31% complete for the same week last year. Nov beans are trading at their highest levels this morning since July 19th and have pushed through the highs of their recent consolidation pattern. Stochastics are giving overbought readings, but the bull flag is pointing higher along with the trend. Speculative funds were net even in soybean trading activity yesterday.


Wheat markets are finding strength today with Dec Chi wheat up 5-3/4 to 4.95, Dec KC wheat is up 6-1/2 to 4.08-3/4, and Dec spring wheat is up 4-1/4 to 5.42-3/4. IKAR raised their Russian wheat production estimates yesterday helping to pressure the wheat complex. The Russian Grain Union also raised their Russian wheat production estimates. Both agencies are now expecting bigger Russian crops than the USDA. Black Sea wheat prices are mostly unchanged from last week and Egypt is tendering again. Spring wheat harvest was seen at just 91% complete on yesterday’s Crop Progress reports vs the average trade guess of 94%. Extreme weather in the northern Plains and southern Canadian Prairies this week were likely damaged spring wheat still in the fields. Dec Chi wheat briefly tested its 20-day moving average support level this morning, but has found buyers and pushed through yesterday’s highs. Dec KC wheat bounced off of its lower bolinger band support level and is now trading above yesterday’s highs and Dec Mpls wheat is making a bullish outside day as well, trading above its 10 and 100-day moving average levels for the first time since October 1st. Speculative funds were thought to have been net even and wheat trading yesterday.


Cattle markets are mixed this morning with Oct lives up 22 cents to 108.47, Dec lives were down 30 cents to 110.90, and Feb lives were up 32 cents to 116.72. Oct feeders were up 7 cents to 141.77, and Nov feeders are steady at 140.92. Cash markets have put together an impressive rally over the past few weeks though beef values have been very disappointing. Extreme wintery weather in the northern Plains late this week poses high risks to cattle and feedlots and death loss is a real possibility. Mixed fundamentals are keeping markets choppy and severely overbought rallies are likely limiting advances otherwise anticipated due to the weather. Still, cattle markets have tested and held nearby support levels today though prices do look vulnerable to a correction.


Hog markets are sharply higher today with Oct up 1.20 to 61.70, Dec hogs are up 3.20 to 67.45, and Feb hogs are up 2.22 to 73.70. Pork values have been rallying lately, though the CME lean hog index is slightly lower today, the cash fundamentals are friendly. Developments regarding U.S./China trade negotiations today are light, with China’s national average spot pig price up over 12% overnight on the first trading session following China’s week long holiday. Dec hogs closed limit lower yesterday, but are attempting to put in a bullish key reversal today on expanded limits Dec hogs tested but failed to break through their 20-day moving average resistance level.


Kelly Rubisch

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