TFM Midday Update 6-5-20


Corn prices are very slightly higher so far this morning, with July up 0.01 to 3.30, September is up 0.0075, and December is up 0.0075. Soil moisture in most areas is plentiful, and forecasts aren’t showing much adverse weather. Crude oil prices were able to punch through the 100-day moving average resistance level this morning which should open up some more room to rally. The U.S. dollar is making a slight bounce today which may be limiting some end of week buying. July corn futures have stayed within a very tight range so far today but has held gains for the vast majority of the session so far, just below the upper Bollinger Band resistance line. Stochastics are not yet overbought but are close. Funds were thought to have bought about 15,000 contracts of corn yesterday.


Soybean futures are trading a bit lower today, with July down 0.0175 to 8.66, August beans were down 0.0125 to 8.675 and November beans are down 0.0025 to 8.765. South American soybean prices are still high. Brazilian producers are hoarding their remaining supplies, and Argentina processors are pushing basis levels for crushing supplies. The U.S. dollar is making a bit of a recovery bounce today, but the Brazilian real is also higher, limiting the pressure. Weather is non-threatening, and some are still concerned that the June Grain Stocks and Acreage report may show increases in soybean acreage. July beans are trading just off the lows of the day so far and are holding the upper Bollinger Band level as support after pushing one tick through yesterday’s highs. Today’s session has not done much technical damage yet, even though Stochastics are slightly overbought. Funds were thought to have bought about 11,000 contracts of beans yesterday.


Wheat prices look soft so far this morning, with July CHI wheat down 0.0975 to 5.14, July KC wheat is down 0.085 to 4.6375, and July MPLS wheat is down 0.08 to 5.1825. Concerns for hot and dry weather in Russia are being overwhelmed by more modest price action across the rest of the grain complex today. The U.S. dollar is up and the Russian ruble is making a test of the recent highs made on Wednesday. July CHI wheat futures, despite the heavy losses, are still trading between their 50-day moving average resistance level and their 10-day moving average support level. KC futures have fallen below the 200-day moving average level, and MPLS futures are back below their 10 and 50-day moving average levels. Funds were thought to have bought about 11,000 contracts of CHI wheat yesterday.


Cattle markets are slightly lower today, with July lives down 0.40 to 95.32, August lives are down 1.00 to 96.92, and October lives are down 0.67 to 100.20. August feeders are down 0.17 to 134.55 and September feeders are down 0.37 to 136.12. With the sharp sell off in beef prices lately, cash trade has softened significantly. There was trade noted on Monday as high as 118.00, but heavy trade in the country yesterday was focused at 105.00. Weights and slaughter are increasing, but the increasing demand for slaughter supplies could still provide some support to the cash market. August lives sold off hard this morning, tested their lower Bollinger Band support level, and have since rallied up and are trading just off the highs of the day. August feeders are still consolidating in a pennant formation.


Hog futures are mixed to mostly higher, with June down 0.35 to 48.07, July is up 1.07 to 54.65, and August hogs are up 1.30 to 57.07. The cash index is still trending lower, but pork values seem to be stabilizing and are up over 4.00 this morning. Exports have been strong lately, partly due to the lower trend in the U.S. dollar. China hog and pork prices are rallying quickly. which should continue to bolster exports despite elevated trade tensions lately. July hogs are finding some strength today after stabilizing action during yesterday’s session. Stochastics are sharply oversold, so a recovery could come fairly quick if resistance levels are breached. August hogs look poised to make their first close above the 20-day moving average resistance level since May 8.


Bryan Doherty

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