TFM Midday Update 11-13-19


Corn futures are soft this morning, with Dec down 3/4 cent to 3.77. Mar corn is down 1 cent to 3.85-1/2, and May corn is down 2 cents to 3.90-3/4. Yesterday afternoon’s Crop Progress report was supportive, with corn harvest seen at 66%, versus the average market estimate of 68%. Calendar spreads are choppy today, though they were positive yesterday due to difficulty finding propane to dry corn in the country, as well as increased feed use due to early season cold weather. Dec corn has made a quiet inside session thus far and is currently within the upper third of its range today. Technical indicators are giving oversold readings, though this has yet to spur much buyer interest. Speculative funds were thought to have bought about 16,000 contracts of corn yesterday.


Soybean futures are mixed to slightly lower this morning, with Nov up 1/4 cent to 9.06. Jan beans are down 1-1/2 to 9.15-1/2, and Mar beans are down 1-1/2 to 9.28-3/4. President Trump offered no new information on the U.S. / China trade deal in his speech yesterday as many were hoping. Brazilian planting weather is improving, and yesterday’s CONAB estimate for Brazilian production came in over 2 million tonnes below the USDA’s estimate. Yesterday’s Crop Progress report was supportive, with just 85% of the soybean crop harvested versus the average market guess of 87%. Jan soybeans are retesting support this morning at the 100-day moving average level for the first time since the end of September. There is a bearish head-and-shoulders formation on the charts that could point to lower prices, though buyers should be active on breaks given potential for lower U.S. production estimates in the January report. Speculative funds were thought to have bought about 1,000 contracts of soybeans on Tuesday.


Wheat markets are lower this morning, with Dec Chi wheat down 6-1/2 to 5.10-1/2. Dec KC is down 7-1/4 cents to 4.31-1/2, and Dec spring wheat is down 3 cents to 5.18-3/4. The KC contract made a sharp jump yesterday on winter weather concerns, coupled  with plantings expected to come in at their lowest levels since 1909. Chi wheat futures found overflow buying support, while the spring wheat contract was still attracting buyers on Friday’s supportive Supply and Demand report. Dec Chi wheat has fallen back below its 10 and 20-day moving average support levels. Dec spring wheat is correcting back toward the middle of yesterday’s range though is still above the 100-day moving average level. Dec spring wheat is putting in a quiet inside session so far. Speculative funds were thought to have bought about  8,000 contracts of Chi wheat yesterday.


Cattle markets are lower this morning, with Dec lives down 45 cents to 119.30. Feb lives are down 60 cents to 124.97, and Apr lives are down 30 cents to 126.75. Nov feeders are down 1.00 to 146.80, and Jan feeders are down 1.77 to 145.35. Choice beef has continued its rally, closing yesterday at its highest levels since late August. However, many are becoming concerned about heavy weight and high placements over the past couple of months, which could add to short term supply fairly quickly if slaughter levels pick up. Cattle markets may also be attracting technical traders, as both the live and feeder markets are sharply overbought and have retested nearby support levels. Dec lives are hanging onto their 10-day moving average support level for the fourth session in a row, and Feb lives are making their first test of the 10-day moving average since October 23. Jan feeders have fallen below their 10-day moving average, and momentum may be rolling lower.


Hog markets are moderately lower today, with Dec down 50 cents to 64.22. Feb hogs are down 62 cents to 74.92, and Apr hogs are down 22 cents to 81.80. Pork values have rallied substantially from the mid September lows and closed yesterday at their highest level since August 13. The cash market is still choppy. The high pork values and low cash market will keep packer margins strong and production running heavy. Export sales activity has likely picked up this week, but we will need to wait until Friday’s report to see official numbers. Dec hogs pushed through their 20-day moving average resistance level this morning but have since fallen back below. Feb hogs opened above their 200-day moving average level but have since fallen back and now are testing their 20 and 50-day moving average levels. Feb and Apr are still above their recent consolidation levels.


Lisa Heder

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