TFM Midday Update 11-11-19


Corn futures are drifting toward the low end of recent ranges today, with Dec down 2-1/2 to 3.74-3/4. Mar is down 2-3/4 to 3.83-3/4, and May is down 3 cents to 3.90-1/2. Friday’s slightly supportive Supply and Demand report has not been enough to keep buyers active, at least thus far today. The demand tone remains sluggish at best, and a lack of significant crop losses this year are keeping the balance sheet heavy. Brazilian corn planting is running 12% behind last year, supportive though not disastrous for South American supplies. Dec futures traded as lows as 3.73-1/2 this morning, within 2 cents of Friday’s lows. Friday’s session made a bullish key reversal, although a weak one. The close 6-1/2 cents off of the day’s highs was uninspiring. Speculative funds were thought to have bought about 13,000 contracts of corn.


Soybean futures are soft this morning, with Nov down 9-1/4 to 9.10-1/4. Jan beans are down 10 to 9.21, and Mar beans are down 9-1/2 to 9.34-1/2. Improving South American weather is a bearish factor, though soybean planting in Brazil is still running 12% behind last year’s pace. Friday’s Supply and Demand report brought heavier balance sheets than the Oct Supply and Demand report. The lack of adjustments in harvested acreage and yield on Friday was disappointing, though this does seem to suggest production adjustments could be coming in the Jan report. However, without much in the way of immediate news, markets were poised to drift. Jan soybeans are testing their 50 and 200-day moving average support levels today after moving to their lowest prices since 10/1. Technical indicators are giving oversold readings, and a close below nearby support could open up another 8-10 cents of downside. Speculative funds were thought to have sold about 7,000 contracts of beans on Friday.


Wheat markets are slightly lower this morning, with Dec Chi wheat down 3 cents to 5.07-1/4. Dec KC wheat is up 3/4 cent to 4.22-1/4, and Dec spring wheat is down 2 cents to 5.16-1/2. Friday’s Supply and Demand report showed declining U.S. ending stocks as well as lower production estimates for Argentina and Australia. Private projections for Argentina and Australia are still lower than the USDA, which suggests more downward revisions are possible. However, the world balance sheet got heavier on Friday, keeping too much buying action at bay. Dec Chi wheat is making a quiet, two-way trading session so far today. Dec KC wheat is attempting to break through nearby resistance at the 10 and 20-day moving average levels, while the Dec Mpls contract is making new lows for the move and hitting its lowest prices since 9/18. Speculative funds were thought to have sold about 5,000 contracts of Chi wheat on Friday.


Cattle markets are mixed this morning, with Dec lives down 17 cents to 119.07. Feb lives are down 12 cents to 124.90, and Apr lives are up 30 cents to 126.40. Nov feeders are up 7 cents to 147.07, and Jan feeders are up 65 cents to 146.52. Cash cattle traded in the country on Friday 3.00 to 3.00 higher than the previous week. The rally in choice beef values has allowed the surge in cash cattle to continue, with beef prices at their highest levels since late August. This is especially impressive given the highest dressed steer weight average since September 2016. Dec live cattle are resting their 10-day moving average support levels this morning after successful tests on Friday. Both the Dec and Feb contracts are making inside sessions so far, while the Apr contract has moved to new highs. The best traded Jan feeder cattle contract is testing the top end of its recent consolidation range.


Hog markets are slightly lower this morning, with Dec down 7 cents to 64.05. Feb lives are down 27 cents to 73.62, and Apr hogs are down 47 cents to 79.85. The CME lean hog index is attempting to stabilize higher for its second session in a row after a near 2-week slide. China’s spot pig prices were down 6% overnight, and President Trump made comments on Friday contradicting earlier reports that the U.S. and China would begin to rollback tariffs in waves. The best traded Dec contract traded at its lowest value today since 10/8 but has since bounced back to near steady for the day. Dec is holding in the lower end of its recent trading range, while Feb and Apr are hanging onto a bit of premium, staying within the high end of their recent ranges.


Lisa Heder

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