TFM Midday Update 12-11-19


Corn futures are drifting lower, unable to follow through on yesterday’s positive closes. Dec corn is down 1-3/4 to 3.61-1/2, Mar corn is down 3-3/4 to 3.73-1/4, and May is down 3 cents to 3.79-3/4. Dryer forecasts for Argentina corn growing areas, as well as Brazilian expectations for a 1.6% drop in corn production from last year was supportive. Many are still expecting the USDA to lower U.S. corn production on the January 10th Supply and Demand report as this has happened in five of the last six years. However, yesterday’s USDA Supply and Demand report increased world ending stocks by 4.6 mmt, hence the pressure today. Mar corn is trading at its lowest levels since November 27th and are drifting into oversold levels again. With growing wold inventories, there is just not much urgency to own corn at this point. Speculative funds were thought to have bought about 3,000 contracts of corn yesterday.


Soybean futures are having a rough start to the day with Jan down 8-1/4 to 8.93, Mar is down 8-1/2 to 9.07, and May beans are down 8-1/4 to 9.20-3/4. Support from China was noted early today, with talk that China has issued up to 2 mmt of new U.S. soybean import waivers this week. The USDA announced export sales of 585,000 mt of beans for delivery to China, as well as a 140,000 mt sale of soybeans to unknown destinations this morning. Many traders are looking forward to the January U.S. Supply and Demand report where the USDA made lower U.S. soybean production. The USDA has lowered production in every one of the last five years on the January report. However, selling action today is likely due to increasing world ending stcocks from yesterday’s Supply and Demand report. Ending stocks only increased by about a million tons, but that has drawn enough seller to push prices below nearby support at the 20-day moving average levels. The three nearby contracts are all currently trading below that support level, and closes below could open up another 10 cents of downside correction from the recent rally. Speculative funds were thought to have bought about 4,000 contracts of soybeans yesterday.


Wheat markets are mixed to mostly lower this morning with Mar Chi wheat down 5-1/2 to 5.18-1/4, Mar KC wheat is down 2 cents to 4.29-1/4, and Mar spring wheat is up a penny to 5.19. Egypt purchased 355,000 tons of wheat yesterday from France, Russia, Ukraine, and Romania. Egypt purchases for the marketing year so far are up 7% from a year ago. More than 40% of normal UK wheat acreage was unplanted by the end of November. Still, yesterday’s outside day higher in Chi wheat was not enough to attract buyers today. World ending stocks increased yesterday by just over 1 mmt to a new record high. The U.S. dollar is also stronger today, which is a pressure on the wheat markets. Mar Chi wheat has fallen below its 20-day moving average level, and a close below will be the first since November 21st. Chi wheat futures are currently hanging onto their 50-day moving average levels and a close below will be the first since November 15th. Mar KC wheat opened directly below its 100-day moving average resistance level and has been drifting for most of the session, while the Mar spring wheat contract made its first close above its 20-day moving average resistance level yesterday since October 23rd and is continuing its trend higher today. Speculative funds were thought to have bought about 3,000 contracts of wheat yesterday.


Cattle markets are slightly higher this morning with Dec lives up 57 cents to 120.45, Feb lives are up 62 cents to 125.20, and Apr lives are up 60 cents to 125.65. Jan feeders were up 82 cents to 142.47, and Mar feeders are up 75 cents to 143.27. Beef values are continuing their trend lower and light cash cattle trade yesterday has begun to drift from trade on Monday and last week. Yesterday’s Supply and Demand report also increased 2020 beef production expectations. Despite a bearish tilt to fundamentals, cattle cannot seem to sell off. The best traded Feb live cattle contract is testing its overhead 10 and 20-day moving average resistance levels, and closes above would be the first since December 3rd. Jan feeders are trading at their 20-day moving average resistance level, and a close above would be the first since November 18th.


Hog markets are mixed to mostly lower this morning with Dec up 10 cents to 60.57, Feb is down 55 cents to 67/.42, and Apr is down 37 cents to 73.82. The CME lean hog index is higher today after yesterday’s first lower close in four sessions. Carcass values are choppy, though hanging in there considering extraordinarily high levels of production lately. Yesterday’s USMCA progress was very positive, though follow through buying action today is nowhere to be found. Feb hogs initially tested their 20-day moving average resistance level this morning, but have since drifted back below their 10-day moving average support level. Apr hogs have held their 10-day moving average support level so far. Prices have settled in near the middle of the recent trading ranges without much direction.


Kelly Rubisch

Sign up to get daily TFM Market Updates straight to your email!

back to TFM Market Updates