TFM Midday Update 4-29-20


Corn futures are trading just a bit higher this morning, with May Corn up 0.0125 to 3.04, July is up 0.0075 to 3.1275 and Dec is up 0.0075 to 3.3075. Crude oil prices are higher this morning, which is supportive, and rains in the eastern corn belt may begin to delay plantings. However, ethanol demand is still a major concern, and feed demand is likely to pull back as well due to logistical issues killing livestock. July corn traded as high this morning as 3.18, but has since pulled back to the lower third of the day’s range. Stochastics are falling to oversold levels which could provide some fuel for a bounce on positive news, but for now, the trend is still lower. Funds were thought to have sold 5,000 contracts of corn yesterday.


Soybean markets are trading slightly higher this morning, with May up 0.0225 to 8.2825, July is up 0.0175 to 8.3375 and Nov is up 0.0275 to 8.4175. Planting progress, especially in the eastern corn belt, is likely to slow down a bit over the next week or two due to rains. The norther parts of the Midwest should be able to dodge most of the rains which is keeping the support limited. Meal prices in the US and China are under pressure today, and cheaper Brazilian prices is also bearish for US beans. July soybeans are trading in a quiet, inside session so far, and have yet to test the 10-day moving average resistance level. July beans have held yesterday’s lows despite technical pressure, so while this is not necessarily bullish, it may contribute to some stabilizing price action. Funds were thought to have sold about 4,000 soybean contracts yesterday.


Wheat markets are down hard this morning, with May CHI wheat down 0.1325 to 5.1325, May KC wheat down 0.065 to 4.68 and May MPLS wheat is down 0.065 to 4.9275. Rains in the US, Russia and France have all put a wet rag on futures prices today, and without global supply issues, the upside may be limited. Export activity has slowed lately, and governments may be showing a reduced sense of urgency to hold physical grain for food security reasons. Pressure today looks especially negative given the lower US dollar and higher Russian ruble, normally supportive for prices. July CHI wheat is trading at its lowest levels this morning since March 19 and has fallen to oversold levels. July KC wheat is holding trend line and moving average support and spring wheat futures are extending their recent downtrend. Funds were thought to have bought about 1,000 contracts of CHI wheat yesterday.


Cattle markets are mixed this morning as traders wait to hear news of significant cash trade. April lives are up 1.47 to 87.00, June lives are down 0.20 to 84.50 and August lives are up 0.15 to 90.67. May feeders are up 0.37 to 118.87 and August feeders are up 0.20 to 128.12. President Trump has declared meat processors essential businesses which is aimed at keeping lines running and meat supplies available for consumers, though it is still unclear exactly what this order will do to keep plants open. Cash trade this week has been light and mostly steady with last week, though slaughter numbers are down hard from last week and the same week last year. Meanwhile, beef prices have rocketed to record highs. June live cattle made a solid technical close yesterday above nearby resistance and are so far holding those levels as support this morning. May feeders are also holding nearby support though are not finding much buyer interest thus far.


Hog markets are lower this morning after disappointing closes yesterday afternoon. June hogs are down 1.12 to 55.07, July hogs are down 2.17 to 58.07 and August hogs are up 2.57 to 61.15. The CME Lean Hog Index is still moving higher, but reduced slaughter capacity could turn that trend fairly easily. Markets fell off session-highs yesterday shortly after President Trump declared meat processors essential businesses, though without much clarity on how that will keep slaughter lines running, the market appears to have bought the rumor and sold the fact. Pork values are rallying quickly as production grinds slower. June hogs briefly tested their overhead Bollinger band resistance area this morning but have drifted further back since. June hogs filled the gap today between Monday and Tuesday’s sessions, and the correction could be technical in nature considering stochastics are still near overbought levels.


Kelly Rubisch

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