TFM Midday Update 12-9-19


Corn futures have begun to trickle higher with Dec up a penny to 3.67-1/2, Mar is up 1/2 of a cent to 3.77-1/4, and May is up 1/4 of a cent to 3.82-3/4. Both U.S. and world ending stocks are expected to grow on tomorrow’s USDA Supply and Demand report. Futures prices may be finding some buyers on strong cash market, lower U.S. dollar, and talk that Argentina will be dry for at least the next week. Corn harvest continues to drag on, particularly in MI, ND, and WI. As of last week, all three states were less than 70% harvested and this week’s data will be released in the afternoon. The corn market had a rough end of the week last week with two consecutive unsuccessful tests of overhead resistance. Corn futures have traded within very tight two-way ranges so far today inside of Friday’s trading ranges. For the week ending December 5th, the U.S. shipped 481,000 tons of corn vs 440,000 tons the previous week and 888,000 tons the same week last year. Cumulative corn shipments are running nearly 8.6 mil tons behind last year’s pace.


Soybean futures are finding further buying interest to start off the week strong. Jan beans are up 11-1/2 cents to 9.01, Mar beans are up 11-3/4 to 9.15-1/2, and May beans are up 10-3/4 to 9.29. Dry weather in Argentina for the next week is worth watching, with the next chances for significant rain not seen until next Monday. The U.S. dollar is lower this morning. Soybean markets look strong technically as well with all three nearby contracts pushing through nearby resistance at the 20-day moving average levels. Stochastics have also continued their trek higher after giving a buy signal on Friday. Funds appear to be short covering even though U.S. and global balance sheets are expected to grow on tomorrow’s report. For the week ending December 5th, the U.S. shipped 1.33 mil tons of U.S. beans vs 1.58 mil tons the previous week and 927,000 tons for the same week last year. Shipments are running about 3 mil tons ahead of last year’s pace.


Wheat markets are mostly lower this morning with Mar Chi wheat down 2 cents to 5.22-1/2, Mar KC wheat is down 3-3/4 to 4.27-1/4, and Mar spring wheat is up 3 cents to 5.15. Russian wheat prices are higher for the fourth week in a row. Both U.S. and world ending stocks are expected to decline very slightly on tomorrow’s Supply and Demand report, but traders appear to be focused on ample world supplies. The lower U.S. dollar is supportive today though the index made a bullish key reversal on Friday. Mar Chi wheat has tested and held its 20-day moving average support level so far today, still hanging within Friday’s range. Mar KC wheat is continuing its trend lower, moving to its lowest value since November 19th. Mar spring wheat has tested its overhead 20-day moving average resistance level for the third session in a row, but has not traded above it. The U.S. shipped 314,000 tons of wheat for the week ending December 5th vs 335,000 tons the previous week and 449,000 tons for the same week last year. Cumulative wheat shipments are running about 2 mil tons ahead of last year’s pace.


Cattle markets are slightly higher this morning with Dec lives up 7 cents to 120.27, Feb lives are up 5 cents to 125.02, and Apr lives are up 15 cents to 125.50. Jan feeders are up 2 cents to 141.57, and mar feeders are up 50 cents to 142.17. Beef values are trending lower though cash cattle were able to trade steady to very slightly higher for the week last week. Mostly dry weather this week is bearish. Feb live cattle have traded above their nearby resistance at the 10 and 20-day moving average levels early this morning, but have since backed off. Apr lives also briefly tested their 10 and 20-day moving average resistance levels, but have since sagged lower. Jan and Mar feeders have both tested their 10-day moving average resistance levels so far today, but have not traded above them for significant amounts of time.


Hog markets are lower this morning with Dec down 95 cents to 60.17, Feb hogs are down 1.15 to 66.40, and Apr hogs are down 1.15 to 72.55. Pork values in the CME lean hog index were higher on Friday. However, China’s national spot pig prices were down overnight and China hog inventories in China in November were up from October, the first month-to-month rise in a year. Traders seem hesitant to buy hogs on expectations of increased exports despite the fact that U.S. exports to China and Hong Kong are up 99.9% from January to October. Feb hogs posted very disappointing closes on Friday and are continuing to trend lower drifting toward the low end of the recent trading range. Apr hogs are showing similar weakness with near term support coming in around 72.00.


Kelly Rubisch

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