TFM Midday Update 12-20-19


Corn futures are trading firmer this morning with contracts 1 to 2 cents higher. Front month Mar is 2 cents higher to 3.88-1/2, while May is also up 2 cents to 3.95. Money has been flowing into both corn and bean markets this morning as prices have stayed in their consolidation pattern. The Mar contract had a very low trading range of 2-1/2 cents so far this morning. The market is being supported by yesterday’s strong weekly export sales numbers, as demand for corn on the export, as well as ethanol usage side, has improved steadily over the past few weeks. This is a window where U.S. corn exports can be the focus for world buyers given depleted stockpiles in other exporting countries. Prices continue to consolidate under the 100-day moving average, and if the Mar contract can break through may bring a round of stops and quick short covering.


Soybean futures are trading firmer with contracts 1 to 3 cents higher. Front-month Jan beans are 3-1/4 cents higher to 9.27-3/4, while Mar beans are 2-3/4 cents higher to 9.39. The soybean market, like corn, has been in consolidation mode the majority of this week as prices continue to trade within yesterday’s trading range. Little buyer support may be moving into the market today supported by strong demand news on the export sales front, as well as a report outlining the plan that China could be picking up U.S. agricultural product imports to reach the projected $40 billion total in the Phase 1 deal. This would bring an increased amount of U.S. soybeans purchased by the Chinese. Holiday trade is light, and the market will likely stay choppy through the Christmas holiday.


Wheat markets are trading softer today, with Chi contracts 5 to 6 cents lower. Front-month Mar Chi is down 5-1/4 to 5.40, while the May contract is down 5-1/4 to 5.43. Weakness is also seen in the other classes of wheat today. Prices are seeing some Friday consolidation and profit-taking after an aggressive move higher over the past couple of weeks. Weekly export sales for wheat were at its highest level for the marketing year last week as the demand picture has stayed relatively strong. Forecasts for above-normal precipitation across the southern Plains may be weighing on the wheat market as those regions have seen some dryness, and rainfall will be supportive of the winter wheat crop.


Cattle markets are trading mixed with front-month Dec contract 5 cents higher to 122.17, while the Feb cattle are down 5 cents to 125.57. The cattle market is extremely quiet today as we anticipate this afternoon’s Cattle on Feed report. The Cattle on Feed report is expected to show total cattle on feed at 102% of last year, and the placement number still being a key for projected longer-term cattle numbers. The market is still trending increased placements, as analyst estimates are very wide range again this month. Cash trade is slowly developing this week, with early trades trading steady to 1.00 higher for weighted averages, and dress trade generally 2.00 higher than last week. Retail values have been soft, which keeps a lid on cattle prices.


Hog markets are trading firmer with front-month Feb hogs 17 cents higher to 71.15, while Apr hogs are up 7 cents to 77.57. Prospects of Chinese demand stepping into the pork market keeps strength across the entire hog complex despite aggressive and large slaughter numbers. The cash market may be starting to show some stability, as slaughter numbers begin to wind down as we move into the end of the year. Retail values have been soft, but still running at solid margins and above last year’s totals. The hog market is staying choppy and consolidative until we see a clearer picture on the demand side of the equation. Weekly export sales stayed supportive with a large portion of shipments of pork into China again confirming their demand.


Carol Tillmann

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