TFM Midday Update 11-19-19


Corn futures are finding a bit of a bounce off of yesterday’s lows, with Dec up 3-1/2 cents to 3.71-1/4, Mar is up 3-3/4 to 3.81, and May is up 3-1/4 to 3.86-1/4. Yesterday’s Crop Progress report was seen as supportive with corn harvest pegged at 76% complete vs the average trade guess of 77% complete, and 92% on average. U.S. demand has picked up and corn export prices are not competitive to world buyers vs other countries. Eight Midwestern states have been declared emergencies in recent weeks over shortages of propane needed by producers to dry harvested corn. Dec futures have not taken out yesterday’s lows, though have matched yesterday’s highs at 3.71-3/4. Prices are still sharply oversold and there is growing talk that yesterday’s lows should hold moving forward as markets look to find a bounce into late harvest. Speculative funds were thought to have sold about 15,000 contracts of corn yesterday.


Soybean futures are slightly higher this morning with Jan up 2-3/4 to 9.13, Mar beans are up 3 to 9.26, and May beans are up 3 to 9.38. Price action today has been somewhat muted due to no major developments on the U.S./China trade front and a general sense that negotiations are moving slower than expected. Palm oil futures are moving near 2-year highs this morning, which is supportive. Yesterday’s Crop Progress report showed that U.S. soybean harvest was 91% complete, steady with tghe average trade estimate and 4% behind the average pace. Jan soybean futures have traded within yesterday’s range for the entire session so far. Prices have moved back above the 100-day moving average level after yesterday’s first close below since late September. Soybean futures are still sharply oversold, so positive developments could case a bounce relatively easily. Still, a bearish head and shoulders formation on the charts looms large and could point to lower prices. Speculative funds were thought to have sold about 7,000 contracts of soybeans yesterday.


Wheat markets are mostly higher this morning with Dec Chi wheat up 4-1/4 to 5.11-1/2, Dec KC wheat is up 6 cents to 4.24-1/2, and Dec spring wheat is down 3/4 of a cent to 5.02-1/2. The U.S. dollar index is slightly lower today providing just a hint of support. Yesterday’s Crop Progress report showed 95% of the U.S. winter wheat crop was planted, steady with expectations and steady with the average pace. 52% of the U.S. winter wheat crop was rated good to excellent vs the average market guess of 53%. Dec Chi wheat is retesting its 20-day moving average resistance level today, and a close above would be the first since November 12. Dec KC wheat is retesting its 10 and 100-day moving average resistance levels with a close above being the first since November 12. Spring wheat futures are trading in very quiet ranges, mostly lower. Moving average levels are beginning to turn higher in the winter wheat contracts and the trend may be continuing to higher prices. Speculative funds are thought to have bought about 6,000 contracts of Chi wheat yesterday.


Cattle markets are lower this morning with Dec lives down 80 cents to 117.90, Feb lives were down 60 cents to 124.50, and Apr lives were down 1.00 to 125.40. Nov feeders were down 7 cents to 146.30, and Jan feeders were down 1.02 to 143.45. Beef values were lower yesterday afternoon which may put pressure on the cash trade this week. Heavy placements are expected for this Friday’s Cattle on Feed report and the USDA is expecting large production increases from quarter 4 to quarter 1 and from quarter 1 to quarter 2. Dec live cattle are trading below their 20-day moving averge for the first time since September 12, and a close below would be the first since September 11. Feb lives are still within their recent range between the 10 and 20-day moving average levels. Jan feeders are making a break below their 20-day moving average support level as well.


Hog markets are lower this morning, with Dec down 55 cents to 62.20, Feb is down 1.92 to 68.30, and Apr hogs are down 2.00 to 74.35. The CME lean hog index is higher and pork values are holding strong. Still, the China spot pig prices are moving lower and U.S. pork production is enormous. Dec hogs are making a quiet drift lower while Feb and Apr are falling sharply out of their recent ranges and hitting their lowest values since September 11.


Kelly Rubisch

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