TFM Midday Update 9-30-19


Corn futures are trading moderately higher ahead of this morning’s quarterly Grain Stocks report. Dec corn is up 3-3/4 to 3.75-1/4, Mar is up 3-1/2 to 3.87-1/4, and May corn is up 3 cents to 3.94. Rain lately has kept harvest moving at a relatively slow pace, and another 1-3 inches of rain are forecast for the next five days in parts of Nebraska, Missouri, Iowa, Minnesota, Wisconsin and Illinois. Dry planting weather in South America may shift some acres from corn to soybeans this year, though ethanol production in the U.S. is at its lowest levels in three years. Dec corn has traded as high this morning as 3.75-3/4, an impressive start to the week with a push through the 10-day moving average level. A poor demand tone is expected to leave today’s report with heavy stocks, so the pop this morning is interesting.


Soybean futures are sharply higher ahead of today’s quarterly Grain Stocks report, with Nov up 15 cents to 8.98, Jan up 14 to 9.11-1/2 and Mar up 12-3/4 to 9.22-3/4. Selling pressure late last week was due to improving Brazilian planting conditions and rumors that the U.S. may delist some Chinese companies from U.S. stock exchanges. With the news that this is not true, traders are again willing to step back into the bean market. Trade talks between the U.S. and China will begin again October 10, five days before the Trump administration is scheduled to increase tariffs. China’s first objective will be to extend the deadline. Cool and wet temperatures in the northern Plains are concerning for the bean crop and providing support. Friday’s close in Nov near the low end of the recent consolidation range was disappointing.


Wheat markets are mixed this morning, with Dec Chi wheat down 1 cent to 4.86-1/4. Dec KC wheat is down 2 cents to 4.05-1/2, and Dec spring wheat is up 7 cents to 5.54. Extensive rain in the northern U.S. Plains as well as Canadian spring wheat areas is currently the main fundamental story in wheat. Some fields in North Dakota are reportedly unharvestable due to extensive water damage. Saskatchewan spring wheat harvest is running nearly 30% behind last year. There was a flurry of wheat tenders last week, though the U.S. did not earn any of the business. Chi wheat contracts are holding onto nearby support after impressive closes Friday. KC contracts are falling slightly below near term support, and spring wheat contracts are testing the recent highs made last Thursday. Spring wheat is overbought technically, but given the uncertainty in harvest, near term direction still looks higher.


Cattle markets are lower this morning, with Oct lives down 45 cents to 104.57. Dec lives are down 42 cents to 110.15, and Feb lives are down 17 cents to 116.02. Oct feeders are down 1.72 to 142.60, and Nov feeders were down 1.15 to 141.75. Pressure today is disappointing, considering the solid rally in cash trade Friday afternoon. Cool and rainy weather in the Plains should keep weights in check, and beef production last week was nearly 2% lower than the same week last year. Despite a friendly tilt to nearly the entire fundamental picture, beef values were at their lowest levels Friday since July 26. Cattle are also running into some technical selling, with both the live and feeder markets sharply overbought after impressive rallies.


Hog markets are mixed this morning wtih Oct down 97 cents to 64.30. Dec hogs are up 1.00 to 70.87, and Feb hogs are up 72 cents to 76.52. Prices opened lower today on a slightly heavy Hogs and Pigs report released Friday afternoon. China’s national spot pig price is up nearly 113% year to date, so despite the overbought technicals and significnat premium of futures markets to the cash market, sellers (at least today) are few and far between. The next round of U.S. / China trade negotiations does not start for another week and a half, so a turn higher in the cash index and pork values should support in the near term.


Lisa Heder

Sign up to get daily TFM Market Updates straight to your email!

back to TFM Market Updates