TFM Midday Update 11-6-19


Corn markets have been very quiet this morning, with Dec up 1/4 cent to 3.82, Mar is down a penny to 3.90-3/4, and May corn is down 1-1/2 to 3.97. Corn prices are drifting due to a continued lack of anything positive on the export front as well as position-taking ahead of Friday’s Supply and Demand report. The demand side of the balance sheet is likely to get smaller once again on Friday morning, more than likely overwhelming any production declines the corn market may or may not see. In years with a late harvest, the corn yield generally goes up on the November report despite expectations. World ending stocks are expected to decline by nearly 2.5 million tons. De corn futures are trading just off the lows of the day after pushing as high as 3.85 early in the session. Next support comes in at the 50-day moving average level at 3.79-1/2 while nearby resistance is at the 10-day moving average at 3.86. Speculative funds were thought to have sold about 9,000 contracts of corn yesterday.


Soybean futures are slightly lower early this morning, with Nov down 2-1/2 cents to 9.19-1/4, Jan is down 3 cents to 9.31-1/4, and Mar beans are down 2-3/4 to 9.44-1/2. Despite the markets feeling that the U.S. and China are growing closer and closer to signing the Phase 1 trade deal, speculators appear somewhat hesitant to take beans higher on this speculation. China’s soybean and palm oil markets hit 2-year highs on Monday, and according to Monday’s Crop Progress report, there are still over 19 million soybean acres in the U.S. left to be harvested. The market is currently trading an expected drop in yield on Friday of about 3/10 of a bushel and a very slight harvested acre decline due to the winter storms in the northern Plains. Jan beans briefly tested their 10-day moving average resistance level but have since fallen back below in some light selling pressure. Soybean markets look poised to trade sideways until Friday morning’s data release. Speculative funds were thought to have sold about 4,000 contracts of soybeans yesterday.


Wheat markets are mixed to mostly higher this morning, with Dec Chi wheat up 4-1/4 to 5.19-1/2, Dec KC wheat is up 1-1/4 to 4.29-3/4. and Dec spring wheat is down 1/4 cent to 5.25-3/4. Egypt purchased 175,000 tons of wheat yesterday from France and Russia, and though the purchase price was slightly down from last week, this was still seen as supportive. The market is looking for reductions in wheat stocks for both the U.S. and the world on Friday’s Supply and Demand report. Dec Chi wheat has found support early on at the 10 and 20-day moving average levels and is since pushing to its highest prices in over a week. Dec KC wheat briefly tested its 100-day moving average resistance level but has been unable to sustain itself above that and Dec Mpls wheat is still trying to push through resistance at the 50-day moving average level. Speculative funds were thought to have bought about 3,000 contracts of Chi wheat yesterday.


Cattle markets look a bit soft this morning, with Dec lives down 42 cents to 119.02, Feb lives are down 22 cents to 124.45, and Apr lives are down 27 cents to 125.55. Nov feeders are down 77 cents to 147.07 and Jan feeders are down 87 cents to 144.90. Choice beef prices are still rallying which should allow packers to pay up once again for slaughter supplies later this week. However, talk of large placements in October and November may be keeping some pressure on today along with expectations for large production increases for Q1 and Q2 of next year. Technically, cattle markets have not put in any reversal signals despite the lower close yesterday and lower start this morning. Dec lives are trading in the lower third of the day’s range so far but appear unwilling to break without a break in the fundamental trend. Jan feeders are continuing to consolidate near recent highs.


Hog markets are lower this morning, with Dec down 1.25 to 66.02, Feb hogs were down 30 cents to 73.45, and Apr hogs were down 20 cents to 79.77. Export sales lately have not met expectations, though yesterday’s sharp jump in pork values may be hinting at a large purchase. Dec hogs are trading at a large premium to the cash market which is a limiting factor though the downtrend in the index may be stabilizing. China’s spot pig prices were unchanged overnight. Dec hogs closed yesterday above their 10, 20, and 50-day moving average resistance levels though prices have fallen back below the 20 and 50-day moving average levels this morning. Feb hogs are holding nearby support at the 10-day moving average and Apr is still within its consolidation range.


Carol Tillmann

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