TFM Midday Update 4-3-20


Corn futures are lower again today after a slight jump to start the morning. May corn is down 0.025 to 3.31, July is down 0.0175 to 3.3675 and Dec is up 0.0025 to 3.50. Prices benefited from some early optimism that next week’s emergency OPEC meeting may give oil prices some support. This should be friendly for ethanol demand, but oil demand does not seem likely to rebound much anytime soon. As corn drifts lower and lower, it is approaching some important long-term support. A front month (May) below 3.285 could opens the charts up to a move to 3.00. July corn has fallen to new lows again this morning and momentum is still pointing lower. Funds were thought to have sold about 1,000 contracts of corn yesterday.


Soybean markets are under more pressure this morning, with May down 0.0525, July is down 0.0475 to 8.5925 and Nov is down 0.02 to 8.61. The US made a new crush record for the month of Feb and China crush margins are recently increasing, both of which are supportive for soybean prices. South American production estimates are beginning to come down as well due to excess heat and dryness. Charts don’t look nearly as friendly. July beans are trading at their lowest levels this morning since March 20th after an unsuccessful test of overhead resistance. Stochastics are pointing lower and moving average levels have recently made bearish crossovers. Funds were thought to have sold about 6,000 soybeans yesterday.


Wheat futures are the bright spot in the grains complex this morning, with May CHI wheat up 0.07 ¾ to 5.495, May KC wheat is up 0.08 to 4.72 and May MPLS wheat is up 0.045 to 5.235. Weather of the US winter wheat crop is still nonthreatening and soil moisture is satisfactory. Russia and Ukraine have recently implemented export quotas, and there are now concerns about soil moisture in southern areas of those countries. French soft wheat is at its worst condition in at least 9 years. All three wheat markets have broken back above support levels that failed yesterday. These markets have corrected their overbought conditions in the short term, but the trend looks mixed. Funds sold about 6,000 contracts of Chi wheat yesterday.


Cattle markets are lower this morning, with deferred contracts holding up much better. April lives are down 3.75 to 89.15, June lives are down 1.80 to 81.20 and August lives are down 0.62 to 83.97. May feeders are down 1.02 to 110.62 and August feeders are down 0.82 to 116.82. Boxed beef values have continued to sell off, though are not collapsing at the recent pace. Cash cattle markets were down 10.00-12.00 earlier this week though trade has dried up into the end of the week. Cattle weights have not declined along with the seasonal trend keeping production elevated. June live cattle are at new lows again today and are making a bearish outside day. May feeders are trading at their lowest levels since March 18 and are nearing oversold levels.


Hog markets have continued their collapse this morning, with April down 2.55 to 42.15, June is down 4.50 to 48.32 and July is down 4.50 to 52.72. The cash index is started to accelerate its lower trend though the cash market is still trading at a huge premium to the front month, especially in delivery month. Pork values have fallen to their lowest values since Feb of 2019 as elevated supply overwhelms a significant pullback in demand. China pig prices are starting to decline which has many nervous that China may start to buy less pork from the US. June hogs made their third gap lower session in a row today and are deeply oversold.


Kelly Rubisch

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