TFM Midday Update 11-14-19


Corn futures are up slightly this morning, with Dec up 1-1/4 cent to 3.76-1/2. Mar corn is up 3/4 cent to 3.84-3/4, and May corn is up 1 cent to 3.90-3/4. The corn market is finding a bit of support this morning from talk that feedlots are feeding cattle and hogs out of higher weights, which should boost domestic usage, along with expectations for heavier cattle placements in October and November. Weather forecasts are not improving for the next 6-10 days, with above normal precipitation and above normal temperatures expected to keep field conditions very poor and harvest progress slow. This morning, Dec corn traded as low as 3.7-1/2 and has moved as high as 3.77-1/2. The tight, 3-cent range is consistent with recent lack of volatility, and nearby resistance comes in at the 10-day moving average. Corn futures are oversold, though the trend still looks sideways to lower. Speculative funds were thought to have sold about 10,000 contracts of corn yesterday.


Soybean futures are slightly lower this morning, with Nov down 1-3/4 to 9.00-3/4. Jan beans are down 3-1/2 to 9.11-3/4, and Mar beans are down 3-1/2 to 9.25. Bean markets are finding pressure today on reports that U.S. / China negotiations may have hit a snag overnight. China apparently does not want to commit to a certain dollar amount of U.S. ag purchases for the phase 1 deal, even though the U.S. is pushing for a set dollar amount. This is seen as yet another delay to negotiations and another reason to expect a deal is coming later rather than sooner. However, China did buy 129,000 tons of soybeans from the U.S. this morning, keeping traders on their toes. Jan soybeans are currently trading below their 100-day moving average level for the first time since September 30. Futures are oversold, but momentum is pointing lower, and a bearish head-and-shoulders formation on the price charts seems to point to lower prices as well. Speculative funds were thought to have sold about 4,000 contracts of soybeans yesterday.


Wheat markets are soft this morning, with Dec Chi wheat down 3 cents to 5.06. Dec KC is down 5-1/4 cents to 4.19-1/2, and Dec spring wheat is down 1-3/4 to 5.13-1/2. Black Sea and French wheat offers are nearly unchanged from last week, and Russian wheat production estimates are creeping higher. The U.S. dollar is slightly lower today although hanging in its current uptrend. Dec Chi wheat tested its 10-day moving average resistance level this morning but has since fallen lower and its now trading below yesterday’s lows. Dec KC wheat opened above its 100-day moving average level but has since fallen sharply lower to trade at its lowest value since Monday. Dec spring wheat is currently trading at its lowest level since  September 19. Speculative funds were thought to have sold about 5,000 contracts of Chi wheat yesterday.


Cattle markets are mixed to mostly lower today, with Dec lives down 17 cents to 117.97. Feb lives are down 40 cents to 123.70, and Apr lives are down 57 cents to 125.10. Nov feeders are up 42 to 146.00, and Jan feeders are up 30 cents to 143.12. Yesterday’s sharp move lower did not have much of a fundamental justification. Beef values are still trending higher, and cash trade yesterday was seen steady to slightly higher with last week. However, many are growing concerned about placement numbers for October and November, and there is also a lot of talk about feedlots holding cattle back and gaining unnecessary weight. Dec live cattle are trading in a very quiet session so far today, still holding their 20-day moving average support level. Jan feeders are retesting their 20-day moving average level this morning.


Hog markets are mixed to mostly lower this morning, with Dec up 30 to 63.42. Feb hogs are down 80 cents to 73.75, and Apr hogs are down 1.10 to 80.65. Traders appear to be unwinding some calendar spreads today, buying back short Dec contracts and selling deferred contracts. The market is facing some instability today after reports of negotiations between the U.S. and China slowing down. The CME lean hog index is higher today, which is supportive, though pork values were down overnight. Dec hogs are pushing into new lows for the move, Feb hogs have fallen back within their recent consolidation range, and Apr hogs are testing nearby support at the 20-day moving average level.


Lisa Heder

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