TOP FARMER MIDDAY UPDATE – September 3, 2019

CORN: Corn futures are trading moderately lower this morning, falling below nearby support after the market’s inability to follow through last week on Wednesday’s bullish key reversal. Sep corn is down 4-1/2 cents to 3.53-1/2, Dec corn is down 4 cents to 3.65-3/4, and Mar corn is down 3-1/2 cents to 3.78-3/4. The 6-10 and 8-14 day forecasts are showing above-normal temperatures and above-normal precipitation for the vast majority of the Corn Belt which would allow the corn crop to continue filling out, possibly later than usual. The threat of a long fall season may alleviate some concerns of a sharply lower crop. Most are still expecting a lower yield and production number on next week’s Supply and Demand report, but traders are also expecting a reduction in usage which could offset a big portion of the production pull back. The U.S. dollar is trading today at its highest levels since May 2017 which makes U.S. corn even less attractive on the export markets. Dec corn traded as low this morning as 3.64-1/2, one tick above the most recent lows from August 28 and just 3/4 cent off the contract lows made on May 13. On one hand, the failed reversals do not look friendly at all, but on the other hand, prices have not been able to push into new lows despite knocking on the door for the past two weeks. During Friday’s session, funds sold about 6,000 contracts of corn. For the week ending August 29, the U.S. shipped just 355,000 tons of corn vs 646,000 tons last week and 1.335 million tons for the same week last year. Cumulative shipments are running over 10 million tons behind last year’s pace.


SOYBEANS: Soybean futures are trading just slightly lower this morning, staging a bit of a mid-morning recovery. Sep beans are down 1-3/4 to 8.55, Nov beans are down 1-1/2 to 8.67-1/2, and Jan beans are down 1-1/4 to 8.80-3/4. Near-term forecasts for warmer weather and above-normal precipitation should be beneficial to the bean crop and is thus easing fears of massive production losses. Still, only 79% of the bean crop is setting pods as of August 25 which leaves about 16 million acres left to go. On the supportive side, the International Grains Council pegged global soybean production for this year at 344 million tons, down 4 million tons from their July estimate and down 5% from last year. The surging dollar is bearish for beans as it makes them less competitive on the export markets. Nov soybeans traded as low this morning as 8.59-1/4, or down 9-3/4 cents from Friday’s close. Prices have been able to crawl their way back and are now trading directly in line with their 10-day moving average level. Speculative funds were thought to have bought about 1,000 contracts of soybeans on Friday. The U.S. shipped 1.28 million tons of soybeans for the week ending August 29 vs 966,000 tons last week and 776,000 tons for the same week last year. Cumulative shipments are running just over 10 million tons behind last year’s pace.


WHEAT: Wheat markets are sliding lower today, making new lows for the move yet again. Dec Chi wheat is down 7-1/4 cents to 4.55-1/4, Dec KC wheat is down 9-3/4 cents to 3.87-1/2, and Dec Mpls wheat is down 5 cents to 4.91-3/4. The sharply higher U.S. dollar has been one of the main thorns in the side of the U.S. wheat markets during this most recent slide, and today is no different. The U.S. Dollar Index is trading at its highest values today since May 2017. Without much of any major production issues in the other wheat growing parts of the world, there is just too much inventory compared to current usage. In addition, commercials are making deliveries against the nearby Sep contracts for both of the winter wheat markets. This is pushing calendar spreads lower causing more weakness. Dec Chi wheat is trading at its lowest levels today since May 13. Dec KC wheat is making new lows for the life of the contract and Dec Mpls wheat is also making new contract lows. Speculative funds were thought to have sold about 7,000 contracts of Chi wheat on Friday. The U.S. shipped about 526,000 tons of wheat for the week ending August 29 vs 505,000 tons last week and 409,000 tons for the same week last year. Cumulative shipments are running about 1.3 million tons ahead of last year’s pace.


CATTLE: Cattle markets are slightly higher in early trade today, with Oct lives down 25 cents to 99.17, Feb lives are up 42 cents to 109.45, and Apr lives are up 30 cents to 111.47. Sep feeders are up 1.57 to 133.97 and Oct feeders are up 1.20 to 132.00. Cash cattle have continued to weaken up through the month of August despite the higher slaughter weight since the Tyson plant in KS burned down. The excess beef supply made available from the higher slaughter numbers is a pressure point in itself. Lower beef prices despite the seasonal increase in retail demand over the Labor Day weekend is bearish as well. Oct live cattle fell through nearby support last week at the 10-day moving average and have been unable to break through it today. Prices briefly tested that overhead level early in the session but have since backed off too much more modest gains. The best traded Oct feeder contract is holding near the lows of its recent trading range and has recovered after some early morning losses. Near-term support for the nearby Oct live cattle contract is around 98.00 and near-term support for the best traded Oct feeder cattle contract is near 130.00.


HOGS: Hog markets are showing triple-digit gains today, attempting to break out of some near-term lows. The Oct contract is up 2.12 to 65.65, Dec hogs are up 1.05 to 64.42, and Feb hogs are up 1.32 to 72.75. Cash pig values in China continue to surge and traders are still expecting the U.S. to supply pork to China, or more likely, supply pork to other nations who ship pork to China. These are bigger picture supportive factors, and in the meantime, the CME Lean Hog Index continues its slide as well as U.S. pork values. The best traded Oct contract closed above its 20-day moving average resistance level on Thursday for the first time since July 29. Hogs failed to hold those levels on Friday but prices have pushed through that resistance level again today showing strong buyer interest.


Carol Tillmann

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