TFM Midday Update 12-24-19


TUESDAY, DECEMBER 24: The CME closes at 12:15 CT, and Total Farm Marketing offices close at 1:00 CT. There will be no 4:30 update.
WEDNESDAY, DECEMBER 25: The CME and Total Farm Marketing offices are closed.



Corn futures have been trading mixed, currently softer with the Mar contract down 3/4 cent to 3.88 and the May contract down 3/4 cent to 3.94-1/2. The market has stayed in a choppy consolidated fashion over the past six trading sessions, as the Mar contract tested but stayed under the 100-day moving average resistance over top. A push through this barrier on the technical side may bring some potential short-covering, since corn futures haven’t traded above the 100-day moving average since August 12. Prices are staying supported by maintained strength in the cash markets, as well as improved overall demand on the export as well as ethanol fronts.


Soybean futures are currently trading firmer with the Jan contract up 2-1/4 cents to 9.36-1/4 and the Mar contract 2 cents higher to 9.44-1/4. Like the other grains, soybean futures have been trading in a choppy sideways trading range as prices have been gravitating higher over the past couple of sessions. The technical picture stays overall friendly in the short term for beans which could bring some additional movement higher if we break through the consolidation pattern. The prospects of improved demand through reduced trade tensions with China keep support underneath the market, while South American weather stays friendly for the development of their overall crop may limit any short-term rallies.


Wheat markets are currently trading firmer with Chi Mar contract up 5 cents to 5.44-1/2 and the May contract up 4-1/2 cents to 5.48-1/4. Strength was also seen in the KC hard red winter wheat up 5 to7 cents and the Mpls spring wheat up 4 to 5 cents. Wheat futures are bouncing off technical support of the 10-day moving average, as prices have consolidated off most recent highs over the past handful of sessions. Global wheat prices continue to rise, which brings support, as well as improved demand prospects for U.S. wheat, which is validated with strong export sales last week. Overall, fundamentals do stay heavy globally, which could limit potential rallies.


Cattle markets are trading mixed, with Dec up 5 cents to 122.45, while Feb is down 17 cents to 125.50. Front-month contracts have stayed supportive as cash markets have continued to trend higher picking up 1.00 over last week. This week’s trade is still relatively undeveloped, and will likely hold off towards the end of the week. Retail values have firmed in the last couple of sessions, which may be bringing some buying support as prices have tumbled off of November highs for carcass values. Monday afternoon’s Cold Storage report showed that beef in freezers was up 3% from month to month, but down 7% from last year. Given the strong slaughter rates, softer beef supplies year over year is an indication of the demand for beef in the U.S. and abroad.


Hog markets are trading mixed, with the Feb contract up 37 cents to 70.62, while the Apr contract is up 27 cents to 77.82. Yesterday’s Quarterly Hogs and Pigs report was relatively in line with expectations as all hogs as of December 1 was 103% of last year, in line with analyst estimates. The area of largest concern was hogs from the 120 to 180-pound class, up 5% from last year and the hogs over 180-pound up 7% from last year which was reflective of the large kill lines we’ve seen in recent weeks, and will likely continue to the first part of 2020. Rallies may stay limited despite the strong demand prospects given the premium of the hog market to both the Lean Hog Index and current cash levels.


Carol Tillmann

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