TFM Midday Update 10-9-19


Corn futures are trading slightly lower currently after a choppy start to the morning. Dec corn is down 1/2 of a cent to 3.95-1/4, Mar corn is down 1/2 of a cent to 4.06, and May corn is down 1/4 of a cent to 4.11. Price direction today has been back and forth with buyers interested due to extreme winter conditions in the northern Plains starting tonight, while others are taking a more cautious approach ahead of tomorrow’s USDA Supply and Demand report. States schedule to receive snow, freezing temperatures, and high winds have corn that is not nearly fully mature. Maturity in MN is just 39%, ND at 22%, SD at 36%, NE at 74%, and 52% in IA. The growing season may be coming to an early close in many of these areas. Technicals are mixed today as well with inverted head and shoulders formations pointing to higher prices in the long term, as well as the recent bull pennant formations. However, stochastics are giving overbought readings and traders do not seem to want to take prices too much higher ahead of tomorrow’s report. Speculative funds were thought to have bought about 26,000 contracts of corn yesterday.


Soybean futures are trading moderately higher at mid-day, falling off of some sharper gains from the overnight session. Nov beans are up 4-1/2 to 9.25, Jan beans are up 4-1/4 to 9.39-1/2, and Mar beans are up 4 cents to 9.51. Heavy snow and high winds for the northern Plains starting tonight and working through Saturday puts a huge number of soybean acreage at risk. U.S./China trade negotiations will begin tomorrow, but there are already rumors swirling that China is offering to increase U.S. soybean purchases to 30 mil tons vs 20 mil tons at present. The stock market is moderately higher this morning, indicating at least some optimism going into negotiations. In addition, Brazil planting is still lagging behind at the slowest pace since the 2013/14 growing season due to a lack of moisture. Nov beans traded as high this morning at 9.31-1/2, but has since fallen back to more modest gains. Stochastics are giving overbought readings, but the bull slide formation and bullish outside day yesterday are still pointing higher. Speculative funds were thought to have bought about 10,000 contracts of soybeans yesterday.


Wheat markets are higher today with Dec Chi wheat up 2-1/2 to 5.02-3/4, Dec KC wheat is up 6-3/4 to 4.17, and Dec spring wheat is up 2-3/4 cents to 5.46-1/4. Egypt bought 295,000 tons of Black Sea wheat yesterday at prices about 2.30 higher than last week. This is indicative of the rising global wheat prices, and Paris wheat futures are also at two month highs. A fair amount of spring wheat is still standing in fields in ND and the Canadian Prairies which may go unharvested after this week’s winter storms. Dec Chi wheat is retesting its overhead 100-day and 200-day moving average resistance levels, Dec KC wheat has pushed sharply through its 50-day moving average resistance level after yesterday’s first close above it since July 12th. Dec Mpls wheat is holding support at the 100-day moving average levels. Speculative funds were thought to have bought 7,000 contracts of Chi wheat yesterday.


Cattle markets are higher this morning with Oct lives up 35 cents to 108.52, Dec lives are up 65 cents to 111.50, and Feb lives are up 90 cents to 117.60. Oct feeders are up 2.60 to 144.62, and Nov feeders are up 3.00 to 144.25. Cash cattle trade this week has been quiet so far, but many are still feeling that late week trading will still be supportive. Heavy snow in the Dakotas and into northern NE is supportive as weight gain will be the least of many feedlot worries this weekend. Beef values bounced off of year long lows during yesterday’s session. The technical picture today is interesting with Dec initially trading lower to test its 10-day moving average support lvel and has now bounced higher despite the overbought condition. Nov feeders opened at their 10-day moving average resistance level and are trading at their highest price since May. Feeder markets are not nearly as overbought as the live markets, but the surge has come against declining momentum indicators.


Hog markets are moderately higher today with oct up 55 cents to 62.25, Dec is up 1.62 to 69.02, and Feb is up 1.00 to 74.60. China’s spot pig prices are rallying very quickly, and some stock market stability today may be indicative of a more optimistic tone regarding U.S./Chaina trade negotiations beginning tomorrow. Pork values have been rallying lately in spite of extremely heavy production which could indicate increasing export activities. Dec hogs had a sharply higher open, but have since lost much of the day’s gains. Prices are currently testing and holding their 10 and 20-day moving average support levels with a gap still holding.


Kelly Rubisch

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