TFM Midday Update 9-17-19


Corn futures are trading moderately lower today with Dec, Mar and May down 3-1/2 cents. Dec is currently trading at 3.70-1/2, Mar at 3.82-1/2, and May at 3.91. Corn was rated 55% good to excellent yesterday afternoon vs the trade estimate at 54%, 55% last week, and 68% a year ago. U.S. corn maturity was seen at 18% vs 11% a week ago, 51% last year, and 39% on average. Above normal temperatures are still expected all the way up to September 30, which is bearish. ASF continues to spread through China and other Asian countries which negatively impacts world corn demand. Crude oil futures are down nearly 4.00 this morning, another pressure point on prices. The Dec corn contract traded as high as 3.74-1/4 and as low as 3.68-1/4 today. Prices have been relatively choppy within the middle portion of the day’s range. Nearby support is at the 20-day moving average of 3.65-3/4, and any correction above that level will not do much technical damage. Speculative funds were thought to have bought about 11,000 contracts of corn yesterday.


Soybeans are trading slightly lower today, rallying off of early session lows in a mid-morning recovery. Nov beans are down 3 cents to 8.97, Jan beans are down 3 cents to 9.10-3/4, and Mar beans are down 2-3/4 to 9.23. Soybean conditions were seen at 54% good to excellent on yesterday’s Crop Progress report vs the trade estimate of 55% and 55% a year ago. 95% of the U.S. soybean crop is said to be setting pods vs 92% a week ago, 100% last year, and 100% on average. Easing tensions between teh U.S. and China are supportive and the USDA announced a flash sale of 260,000 tons of U.S. beans for delivery to China this morning. Nov beans made lows this morning at 8.90-3/4 and have traded as high as 9.00. Soybean futures are overbought, but still, prices have crrept back up into the upper portions of the trading range as the morning moves along. Speculative funds were thought to have bought about 4,000 contracts of beans yesterday.


Wheat markets are correcting lower this morning with Dec Chi wheat down 7-1/4 cents to 4.81-1/2, Dec KC wheat is down 5-3/4 to 4.03-1/4, and Dec spring wheat is down 1-1/2 to 5.07-1/2. The strength in the Russian Ruble lately has been a major supportive factor for the wheat markets. The Russian Ruble was up over 5% for the month so far and this has made teh Black Sea wheat less competitive compared with the U.S. wheat. Moisture concerns are still present in the spring wheat growing areas of the country. Not only have rains delayed harvest significantly, but have also impacted quality. Dec Chi wheat tested its 50-day moving average overhead resistance level this morning and has since sagged lower. Nearby support comes in at 4.76-1/4. Dec KC wheat has made an inside session so far in quiet price action and Dec spring wheat has held support so far at its 20-day moving average level. Speculative funds were thought to have bought about 4,000 contracts of Chi wheat yesterday.


Cattle markets are showing triple digit gains today with Oct lives up 1.55 to 99.55, Dec lives are up 1.45 to 105.47, and Feb lives are up 1.45 to 111.90. Sep feeders are up 2.22 to 138.77 and Oct feeders are up 3.12 to 137.32. Price action so far this week has been choppy ahead of Friday’s Cattle on Feed report. Beef values have not been able to hold together much of a trend higher or lower either and cash trade seems likely to be quiet ahead of Friday’s report. Dec live cattle held support this morning at the 20-day moving average level and has since reversed higher. Dec lives traded at their highest value this morning since August 27. Oct feeders have closed the gap left by the Tyson plant fire and are trading above their 50-day moving average level for the first time since August 9. Both live and feeder cattle markets are showing overbought technical readings.


Hog markets are sharply lower this morning with Oct down 1.57 to 62.05, Dec hogs are down 2.85 to 67.82, and Feb hogs are down 2.05 to 73.80. Today’s correction lower appears to be mostly technical in nature. ASF was confirmed in North Korea this morning as the virus continues to spread. Pork values cannot seem to gain much traction despite all of the talk of increased exports to China. This was likely the major fundamental reason for the choppiness lately. The Dec lean hog contract picked up over 6.00 last week and was trading overbought levels so the selling action today is not a huge surprise. Dec hogs have still held onto their 50-day moving average support level as prices creep toward their limit lower.


Kelly Rubisch

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