TFM Midday Update 4-14-20


Corn markets are slightly lower this morning after another unsuccessful test of nearby resistance overnight. May corn is down 0.0275 to 3.2875, July is down 0.0175 to 3.35 and Dec corn is down 0.0175 to 3.48. US weather is decent, and with last week’s bearish USDA report, the market does not seem to have much urgency to rally. However, given yesterday’s closes well off the lows, and the July contract’s double bottom, there may not be much urgency to sell corn here either. July futures tested their 10-day moving average resistance level overnight for the third session in a row and have since drifted lower. Prices are currently just off the lows of the day. Funds were thought to have sold about 3,000 contracts of corn on Monday.


Soybean markets look soft this morning, with May down 0.0675 to 8.475, July down 0.06 to 8.5625 and Nov down 0.06 to 8.645. Slower demand for soybean oil is one of the main bearish developments for soybeans lately. The Brazilian real was down hard yesterday and is soft again today but is being partially offset by the lower US dollar. South American farmers have had dry weather to aid in harvest activities. July beans made a bearish key reversal yesterday and closed below their 10 and 20-day moving average levels. Prices tested those levels again this morning but have since fallen lower. Momentum indicators are pointing lower and stochastics are nearly oversold. Funds were thought to have sold about 6,000 contracts of beans yesterday.


Wheat futures look weak this morning, with May CHI wheat down 0.0675 to 5.4825, May KC wheat is down 0.1175 to 4.8225 and May MPLS wheat is down 0.0825 to 5.1925. Egypt is continuing to import wheat against their normal seasonal tendencies, and Romania recently banned wheat exports outside of the EU until at least mid-May. Fears of crop damage due to frost are supportive, and yesterday’s export inspections beat expectations. However, wheat has not been able to overcome negatively across the grains complex. Winter wheat futures are currently testing nearby technical support levels and spring wheat futures have fallen sharply below nearby support. Funds were thought to have sold about 2,000 contracts of CHI wheat yesterday.


Cattle markets are mixed in very choppy trade so far today. April lives are up 0.52 to 91.52 and June lives are down 0.15 to 81.22. May feeders are down 2.45 to 112.00 and August feeders are down 1.12 to 123.25. Sharp slowdowns in kill numbers will likely back animals up in the country and force higher production in the future. This would lower demand for slaughter supplies and cause wholesale beef prices to rally. The April live contract’s inability to rally despite trading at a sharp discount to cash means that traders are expecting cash trade to keep falling into April expiration. June lives filled the gap created yesterday but have fallen back to the middle of the day’s range.


Hog markets are mixed to mostly lower this morning, as fears of more packer shutdowns continue to pressure prices. April hogs are up 0.55 to 45.45, June futures are down 1.77 to 43.15 and July hogs are down 0.40 to 50.62. Uncertainty about demand for slaughter supplies moving forward is very bearish and will likely keep a lid on sizeable rectory bounces in the near term. Pork values continue to climb with questions about pork production in the coming weeks.  April futures are moving to converge with the cash index this week. June futures have traded in a wide range so far this morning but have not been able to fully close the gap created yesterday. Stochastics are still sharply oversold and are not signaling a recovery bounce at the moment.


Kelly Rubisch

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