News Source: SPC

Top Farmer Midday Update 2-24-21

CORN

  1. May corn up 4 @ 5.56 & Dec corn up 5 @ 4.74
  2. Ethanol production for the week ending 2/19 average 658K barrels per day – down 27.77% last week & down 37.5 last year
  3. Net drying will continue across much of Argentina through next Tuesday
  4. Brazil “may” produce a record corn crop of 108.2 mln T
  5. 5.90 ½ next upside target/resistance for May futures
  6. Funds expected to still be 384K contracts long

SOYBEANS

  1. May up 12 @ 14.20 & Nov up 13 @ 12.34
  2. Most of Brazil will continue to be favorable; though some areas will still too wet
  3. Reuters reports Brazilian crop estimate raised to 134 mln T from 132.4 mln T
  4. Slow in Brazil harvest and tight balance sheets keep prices moving upward
  5. Soybean & canola oil futures continue to surge into new contract highs
  6. Funds expected to still be 150K contracts long

WHEAT

  1. May up 10 @ 6.80, May KC up 10 @ 6.56, May MNPLS up 7 @ 6.55
  2. NOAA Climate Prediction Center is calling for drought to remain/develop over all of the plains minus southeastern portion through all of spring
  3. Traders still assessing risk to crops from the cold both in US and European wheat belts last week
  4. May futures moving to re-test contract high from Jan 18th of 6.93
  5. Paris milling futures higher pushing US wheat higher today

CATTLE

  1. April LC up 1.00 @ 122.20 & March up 1.15 @ 139.75
  2. Cold Storage reported yesterday red meat supplies in freezers up 3% from last month
  3. Cold Storage reported yesterday total lbs. of beef in freezers were down 3% from last month
  4. Boxed beef prices up .31 @ 240.29 & Select up .55 @ 230.53
  5. Today’s slaughter est. at 122K head
  6. Bids at 113-114 & FC index for 2/22 down .72 @ 140.39
  7. Open interest lost 3599 for April futures & gained 640 for March FC

HOGS

  1. April up 2.45 @ 88.90 & April Pork Cutout up 1.37 @ 94.10
  2. Cold Storage reported yesterday frozen pork supplies were up 11% from last month
  3. Cold Storage reported yesterday stocks of pork bellies were up 2% from last month
  4. Pork values advance – hams to 86.00 from 73.46 last week
  5. Hog slaughter estimated at 496K head
  6. Cash lean index up .31 @ 77.74 for 2/19
  7. O/I: Lost 395 positions for April hogs & pork cutout futures gained 28 positions

Top Farmer Closing Commentary 02-19-2021

CORN HIGHLIGHTS: Corn futures were the recipient of bear spreading today as Mar futures lost 7-1/2 cents closing at 5.42-3/4 and Dec gained 0-3/4 closing at 4.60. For the week, Mar gained 4 cents and December 11-1/4. Weekly export sales at 39.3 million, while not stellar, were still considered supportive and this brings the year-to-date total to 2.305 billion. The USDA is expecting total sales at 2.6 billion, so at present, export sales have reached 88.65% of anticipated sales. The big news today and this week were figures from the USDA outlook conference. Yesterday, acreage was estimated at 92 million for the upcoming crop. Most pre-report estimates were then suggesting carryout would be close to 2 billion bushels. Today, the USDA released line items for the Supply and Demand reports. Projected carryout at 1.552 was lower than expected and helped to spur traders to sell old crop and buy new crop. Expectations are for an additional 200 mb of feed usage and 250 mb of corn for ethanol. Exports are anticipated at 2.650 bb. Forecasted carryout is 1.552 bb. This compares to the 2020/21 carryout of 1.502. In other words, no change from this year. Argentina’s corn crop is rated 21% good to excellent versus 61% last year.

SOYBEAN HIGHLIGHTS: Soybean futures closed firmer with back months leading today’s gains with Nov gaining 9-3/4 cents on the day closing at 11.96-1/4. Nov also challenged the contract high of 12.03 with a high today of 12.02. Nearby Mar closed 2-1/4 cents firmer at 13.77-1/4. For the week, Mar added 5-1/4 cents and Nov 23-1/4. Export sales at 16.8 mb old crop and 6.2 mb new crop were supportive. Year-to-date sales show 2.1995 bb sold, 97.8 % of the projected yearly total. Providing underlying support for prices this week were rain delays to South American harvest and a supportive USDA outlook forum report. Yesterday, the outlook suggested 90 million acres of soybeans, much higher than the 82.5 million from 2020. Today’s supply and demand numbers indicate projected carryout at 145 million bushels for next season. This is a very snug number and only 25 million bushels more than the current USDA estimate for the 20/21 season. Today’s numbers again imply there is no room to error on production over the next year, whether it be South America or the U.S.

WHEAT HIGHLIGHTS: Mar Chi wheat down 11-3/4 cents closing 6.50-3/4 and May Chi down 9-3/4 cents closing at 6.55-1/2. Mar KC wheat down 5 cents closing at 6.31-3/4, while KC May closed down 4-3/4 cents at 6.38-1/4. Ultimately, Chi Mar futures gained 14 cents and KC wheat pulled a 15 cent gain for the week from last Friday’s close. A 4-day trading week, the week started off strong for the wheat sector as bitter cold temps threatened the Plains, and winter kill became the topic of conversation. Paris milling futures were strong this week for the most part and also lent support throughout the wheat trade. Export inspections were lack luster on Tuesday, so it was no real surprise today to see exports at only 399,100 mt. It’s still hoped/expected that U.S. exports will increase in the upcoming months now that Russia has begun imposing their first round of export taxes that are only expected to increase Starting March 1 and again on June 2. Russian crop was dropped this week from the projected 77.7 million tonnes to 76.2 million tonnes primarily due to weather the export taxes. On the other hand, Australia released that they believe they will have a record production year of 33.3 mmt – up from the current USDA’s projection of 30 mmt. Funds are still favoring KC wheat – currently flirting with being long almost 60,000 contracts. Today, the USDA Ag Outlook Forum released they believe wheat acres will be 45 million vs 44.3 million for the 2021/22 marketing year. Also, they dropped corn yield from 49.7 bu to 49.1 for 2021/22. Wheat ending stocks were projected to be 698 million vs 836 million last year – that’s the lowest projection for ending stocks since the 2013/14 marketing year. There’s some thought that with Canola prices surging, some wheat production areas may swap to Canola for the 2021/22 marketing year as well.

CATTLE HIGHLIGHTS: Cattle futures saw firmer trade on Friday, as the market squared up positions before today’s Cattle on Feed report. Feb cattle gained 0.800 to 115.925, and Apr cattle gained 0.750 to 123.675. For the week, Apr cattle lost 1.500. This afternoon’s Cattle on Feed report showed total cattle on feed as of February 1 at 101%, placements for January at 103%, and marketings at 94% of last year. The numbers were in line with expectations, with the exception of the placement numbers. Placements were 3% over expectations and above the high end of expectations. This will likely keep some selling pressure on the market to start next week, especially in the deferred contracts. Front months may be more dictated by the cash market and the demand. Cash trade stayed quiet today, with a little clean-up trade at $114. Overall, trade this week has been quiet, a result of the weather issues in the south. There is still a possibility of late afternoon trade on Friday, but most is likely done for the week. The demand side of the market stays supportive. Wholesale beef carcasses were mixed at midday with choice carcasses gaining 0.36 to 239.21, but select softened 0.02 to 227.45. Load movement was moderate at 61 midday loads. For the week, choice carcasses were nearly 7.00 over the start of the week. Weekly export sales stayed supportive with new sales of 22,900 MT, and shipments of 15,500MT. With the picture still relatively heavy with cattle in the near-term, demand will still be the key going forward. The feeder market followed the live cattle market with moderate gains. The Mar contract gained 0.925 to 139.125 and Apr finished 0.925 higher to 142.675. For the week, Mar feeders lost 1.750 and Apr was down 2.050. The strength in the live market and weakness in the front-month corn market helped support feeders.

LEAN HOG HIGHLIGHTS: Hog prices finished mixed to end the week, with weakness in the front-month futures. Bear spreading was noticeable with the weakness in the front months versus the deferred. Apr hogs lost 0.425 to 84.500, and Jun hogs dropped 0.325 to 92.325. For the week, Apr hogs finished lower, losing 0.700 off last week’s close. Despite being lower, Apr hogs were consolidating off last week’s strong gains and stayed supported to end the week. The cash hog market has been strong, and that continued on Friday. The Lean Hog Index gained 0.67 to 77.20. With today’s gain, that puts the index up 4.84 on the week and trading at its highest levels since October. The demand side of the market has been the strength in the hog rally. Weekly export sales stayed strong with sales of 33,300 MT and shipments of 39,800 MT. Japan was the largest buyer of U.S. pork last week, but China took shipments of 13,100 MT. Retail carcass values stayed strong at midday as pork carcasses gained 2.95 to 93.76 on 150 loads. A strong move in the ham primal cut supported the retail market on Friday. The hog market looked like it took a pause this week to consolidate. The technical picture still looks friendly in the deferred contracts. With the USDA forecasting a longer-term projection for tight feed supplies, a tighter hog supply may be a result, helping support the long-term price.

Top Farmer Midday Update 02-19-2021

CORN

  1. Mar down 8 @ 5.42 & Dec up 1 @ 4.60
  2. USDA projects corn acres to be 92 million acres vs 91 last year
  3. USDA projects corn yield at 179.5 bu/acre vs 172 in 2020/21
  4. USDA projects ending stocks at 1.55 billion bu vs 1.502 in 2020/21
  5. Weekly export sales 999.2K mt
  6. Argentina’s forecast is a little drier than expected moving into next week
  7. Argentina raised corn crop 1% to 24% good/excellent – 61% last year

SOYBEANS

  1. Mar up 3 @ 13.78 & Nov up 7 @ 11.93
  2. USDA Forum projects soybean acres to be 90 million acres vs 83.1 last year
  3. USDA projects 2021/22 yield at 50.8 bu vs 50.2 in 2020/21
  4. USDA projects 2021/22 ending stocks at 145 million bu vs 120 million in 2020/21
  5. Weekly export sales of 455.9K mt
  6. Brazil weather may be more favorable than detrimental next week
  7. Argentina lowered soybean crop ratings by 4% to 19% good/excellent – 66% last year

WHEAT

  1. Mar down 11 @ 6.51, Mar KC down 6 @ 6.30, Mar MNPLS down 7 @ 6.35
  2. USDA projects wheat acres to be 45 million acres vs 44.3 last year
  3. USDA projects wheat yield to be 49.1 bu vs 49.7 last year
  4. USDA projects wheat ending stocks at 698 million bushels vs 836 million in 2020/21
  5. Weekly export sales 399.1K mt
  6. Bitter cold still in parts of US Plains but not as cold as earlier this wk and expected to warm from here
  7. Today’s USDA ending stock projection is the lowest since 2013/2014 marketing year
  8. Russia’s 2021 crop decreased to 76.2 million tons from 77.7 million tons due to poor weather

CATTLE

  1. Apr LC up 0.95 @ 116.07 & Mar FC up 1.07 @ 139.27
  2. Export sales of 22,900 mt
  3. Boxed beef priced up choice @ 238.85 & select @ 227.47
  4. Cattle on Feed out at 2:00 p.m. CT today
  5. Today’s slaughter est. at 115K head
  6. Packer inquiry is limited – saw some sales from 114-144.50 in TX & KS
  7. Open interest lost 2348 for April futures & lost 1126 for March FC

HOGS

  1. Apr hogs down 0.15 @ 84.77 & Apr Pork Cutout down 0.02 @ 91.32
  2. Export sales of 33,300 mt – down 10% from last week
  3. Still overbought, still vulnerable to selling if pork turns down
  4. Hog slaughter estimated at 413K head
  5. Cash lean index 76.53 up 1.02 for 2/16
  6. O/I: Added 830 positions for April hogs & pork cutout futures added 42 positions

Top Farmer Closing Commentary 02-18-2021

CORN HIGHLIGHTS: Corn futures, like yesterday, ended quietly except with small losses as bear spreading was a noted feature. Mar closed 2-3/4 cents lower and Dec down 0-3/4 at 4.59-1/4. Export sales typically released on Thursday will be released tomorrow due to the Monday closure of the markets for Presidents Day. The USDA Outlook Forum estimates corn plantings at 92 million acres, up 1.2 million from last year. The big picture perspective continues to suggest that higher prices will attract more corn acres but at present, the big push is in beans. Expected plantings for beans are 90 million, up from last year’s 83.1 million. A late start to the planting season for second crop Brazil corn suggests that U.S. prices are well supported. China has been on holiday but talk continues to surface that they may be purchasers of U.S. corn, which is considered the cheapest in the world at present. Ethanol production for the week ending 2/12 averaged 911K barrels per day – down 12.40% from last year. Argentina weather will continue to dry down over the next 10 days with early corn 52% filling and 16% mature. The USDA also expects an average price of corn at 4.20 for 2021-22. Strong gains in wheat may have provided support today.

SOYBEAN HIGHLIGHTS: Soybean futures traded softer with Mar leading today’s drop, closing 8-3/4 cents lower at 13.75. Nov closed 2-1/2 lower at 11.86-1/2. Today’s high in Mar was 13.91-1/4. Again, the inability to hold daily highs is concerning. Export sales are delayed until tomorrow due to Presidents Day on Monday in which the markets were closed. A lack of new news and harvest pressure were likely the primary features today. Traders may have also been selling soybeans and buying wheat. The USDA Outlook Forum has acres at 90 million for the year ahead. Planted acres for last year for U.S. producers was 83.1 million. Providing support for prices is a continued mostly wet forecast for the northern regions of Brazil which will delay harvest. Typically, we don’t put much emphasis on crop harvest delays due to rain as eventually, the crop comes in. Yet, in a year like this where U.S. carryout is critically tight and soybean prices are still priced where they were a month ago, it would not be behooving to see China come in and make another large purchase. The mentality of bird in hand has been paramount this year and likely will be prevalent if supplies remain tight.

WHEAT HIGHLIGHTS: Mar Chi wheat up 18-1/2 cents closing 6.62-1/2 and May Chi up 17-1/4 cents closing at 6.65-1/4. Mar KC wheat up 12-1/4 cents closing at 6.36 3/4, while KC May closed up 12-3/4 cents at 6.43. Ultra-cold weather in the U.S. wheat-growing areas provided support for wheat futures Thursday. Temperatures in the Midwest are expected to stay below seasonal averages through the weekend. Winterkill concerns remain elevated with heavy snow accumulations and temperatures below zero degrees Fahrenheit. During a presentation at the USDA’s Agricultural Outlook Forum this morning, the USDA confirmed that it expects U.S. wheat planting to rise slightly off of the 100-year low in planting seen last year. The USDA cautioned that adverse weather conditions could affect farmers’ ability to plant. Extreme cold is expected to subside after this weekend with no look to return in recent forecasts. Drought will once again come to surface as the main weather event regarding wheat – currently expected to drag on and worsen all through summer. Futures were also bolstered today by Paris Milling futures up today as well. Due to the 3-day weekend, exports will be released tomorrow versus today. It might be too soon, but the U.S. is still expected to inherit export business from the export tax that Russia just started to implement this week.

CATTLE HIGHLIGHTS: Cattle futures saw additional profit-taking and technical selling, finishing mostly lower on Thursday. Feb cattle lost 0.175 to 115.125, and Apr cattle dropped 1.225 to 122.925. The break in prices was triggered by issues developing in the South from the recent winter storms. Packing plants in that region are idle or on a limited kill due to concerns with rolling blackout and natural gas issues. Estimated slaughter the past 2 days has been running around 25,000 head under last week, and the backup of cattle has been reflected in the cash market. This looks like a temporary issue, but with the cattle market overbought, it helps add to the selling pressure. Estimated slaughter today is up to 111,000 head, but still 5,000 under last week. The lack of cattle movement has impacted the cash market, which has been relatively quiet this week. The Fed Cattle Exchange held a second auction this week and did see bids move up to $114 and trigger some trade. The remaining countryside cash trade is still relatively quiet, and will likely hold off into tomorrow. Wholesale carcasses are staying strong with choice carcasses gaining 1.99 to 239.50, and select was 1.73 higher to 227.37, on moderate demand of 42 loads. As of midday, choice carcasses are trading 7.00 higher on the week. That strength should help the cash market, but with current conditions, the retail strength is being passed as packers still have plenty of supply available. The February Cattle on Feed report will be released tomorrow, and that helped trigger some additional profit-taking today. Expectations on the report are for: total cattle on feed at 101%, placements at 100.1%, and marketed at 94.5% of last year. The feeder cattle market finished mixed, mostly lower as well today. Mar feeders lost 0.225 to 138.200, and Apr feeders lost 1.000 to 141.750. The weakness in the cattle market and with a possible cattle backup, demand for feeders in the near term could be limit, adding to the selling pressure.

LEAN HOG HIGHLIGHTS: Hog prices battled off early selling pressure to finish higher on Thursday. Apr hogs gained 0.025 to 84.925, and Jun hogs finished 0.025 higher to 92.650. The cash market has been trending strongly higher, and the Lean Hog Index gained 1.02 to 76.53. The index is up 4.17 this week and is trading at its highest level since October. The index is still trading 8.395 under the Apr futures, which could limit the upside. Like cattle, the hog market has dealt with the weather issues, but daily estimated slaughter is at 479,000 head, just below last week’s level, so those concerns overall have seemed to pass. The strength of the market continues to be the demand. Retail carcasses were strong at midday today, gaining 2.93 to 92.10 with good movement at 173 midday loads. Carcasses have been maintaining strength this week, trading around the $90 range. Weekly export sales will be released tomorrow, and if strong, should help maintain strength in the market and likely to set the tone for Friday. Technically, the hog market was due for a correction, especially in the front-month Apr. Prices saw selling dry up on the lows in today’s trade, and if the demand tone is strong, may be likely to head back higher. The long-term positions have maintained their strength and continue to trend higher overall.

Top Farmer Midday Update 02-18-2021

CORN

  1. Mar down 4 @ 5.48 & Dec down 2 @ 4.57
  2. Ethanol production for the week ending 2/12 average 911K barrels per day – down 12.40% from last year
  3. Argentina weather will continue to dry down over the next 10 days
  4. Argentina early corn was 52% filling & 16% mature
  5. Increasing harvest in Brazil may spark increased selling
  6. USDA projects 2021 corn plantings at 92M acres versus 90.8 last year
  7. USDA sees average price of corn at 4.20 bu in 2021-22

SOYBEANS

  1. Mar down 13 @ 13.70 & Nov down 4 @ 11.84
  2. Rain remains to slow field progress in Brazil
  3. Argentina reports 50% soybeans setting pods – 6% filling
  4. USDA projects 2021 US soybeans plantings at 90M acres versus 83.1 last year
  5. USDA sees average price of soybeans at 11.25 bu in 2021-22
  6. Market looking for USDA outlook forum tomorrow to give more price direction

WHEAT

  1. Mar up 15 @ 6.59, Mar KC up 10 @ 6.33, Mar MNPLS up 6 @ 6.40
  2. No more threatening weather predicted after today
  3. Big jump in Paris milling futures helps to support prices
  4. USDA sees average wheat prices at 5.50 bu. in 2021-22
  5. Recent & expected favorable weather indicates record high production for China
  6. US still stands to gain export business with Russian export taxes
  7. Canola prices surging could result in a move away from spring wheat plantings

CATTLE

  1. Apr LC up 0.12 @ 115.42 & Mar FC up 0.25 @ 138.67
  2. Demand could take a hit with more consumers at home than normal
  3. Beef cutouts expected to be higher with light/moderate box movement
  4. Today’s slaughter est. at 107K head
  5. Packer inquiry is limited – saw some sales from 114-144.50 in TX & KS
  6. Open interest lost 1520 for April futures & lost 591 for March FC

HOGS

  1. Apr hogs up 0.25 @ 85.15 & Apr Pork Cutout up 0.02 @ 91.65
  2. June sees key reversal from extreme overbought condition
  3. Hog slaughter estimated at 478K head
  4. Cash lean index @ 75.51 up 0.97 for 2/15
  5. O/I: Down 358 positions for April hogs & pork cutout futures added 71 positions

Top Farmer Closing Commentary 02-17-2021

CORN HIGHLIGHTS: Corn futures rallied late in the session to finish with small gains of 0-3/4 cent in Mar which closed at 5.53 and 2-1/2 firmer in Dec which closed at 4.60. New news was lacking today, and prices drifted early in the session trading three to five cents lower. A sharp sell-off early in the session for wheat spilled over to corn. Yet, corn futures managed to trade quietly but steadily rose throughout the session pushing into positive territory. The extreme cold most of the U.S. is experiencing may be viewed from two different angles. On the one hand movement of corn has been slower in the Midwest due to cold and snow. On the other, difficult conditions for cattle would suggest additional feed usage will need to be penciled into USDA reports. We believe the prolonged cold and snowy conditions are supportive. The USDA will release baseline acreage figures. At present the market may pay some attention but most likely will defer trying to guess acreage until the end of February when insurance rates are determined, and farmers will have a better idea of how quickly they might start fieldwork. At current, new crop prices in soybeans may be favored, yet we believe if corn prices are trading near 4.50 on Dec the pace of spring planting will likely determine acres. Good conditions and firm corn prices could suggest more acres to corn. In addition, farmers will have a better handle on wheat conditions and whether they may substitute poor-looking winter wheat for corn or beans. Rising energy prices could be viewed as supportive.

SOYBEAN HIGHLIGHTS: Soybean futures finished mixed and quiet. The trading range for most contracts was less than 15 cents. In quiet times, 15 cents is a lot. In 2021, a range of 15 cents might be viewed as neutral, especially with bean prices trading close to 14.00. Nearby Mar lost 1 cent closing at 13.83-3/4 and Nov gained 3-1/4 at 11.83-1/4. Supporting bean prices are continued concerns with too much rain in parts of Brazil slowing harvest along with strong exports and an active crush pace. For the most part, funds remain actively buying on dips and this would suggest prices are poised to move higher. With that being said, the reality of record South American production and some growing demand concerns in China due to African swine fever may be keeping bullish traders at bay. New crop prices are trying to buy acres with the Nov soybean price divided by Dec corn price ratio favoring soybean plantings at 2.61%. Typically, at 2.50 acreage could swing to soybeans. Time will tell but it is possible that a battle for acres yet lies ahead. Bear spreading was noted today in both corn and soybeans reflecting general concerns of demand slowdown and more South American business to China.

WHEAT HIGHLIGHTS: Mar Chi wheat down 13-1/2 cents closing 6.44 and May Chi down 13-1/2 cents closing at 6.48. Mar KC wheat down 13 cents closing at 6.24-1/2, while KC May closed down 13 cents at 6.30-1/4. After the frigid temps and fear of winter kill pushed prices higher yesterday, the forecast of milder temps moving into the Plains and no expectation of bitter cold coming back in the near future sent prices lower today. However, prices should still stay supported as drought will once again return to the forefront of weather concerns and now the question will be how much significant (if any) damage did this storm do to the current crop laying beneath the snow? Russia’s wheat prices are also holding roughly steady. Ultimately, nothing changed today from yesterday except a warmer forecast being built in. All eyes will be on this week’s USDA Ag Outlook Forum to see what the USDA is thinking regarding planting intentions for 2021-22 row crops.

CATTLE HIGHLIGHTS: Cattle futures finished lower on Wednesday as Apr cattle lost 1.650 to 124.150, and Jun cattle dropped 1.075 to 120.625. It was a disappointing day in the cattle markets, as some profit-taking pushed markets lower. A disappointing start to the week in cash trade was the trigger for the selling pressure. Cash trade has stayed mostly undeveloped, but the Fed Cattle Exchange traded this morning with soft results. THE FCE saw no completed sales today with the highest bids from $110-113. Last week, high bids were $113-114. With the futures market holding a premium to cash, this opened the door for selling. The countryside cash market is still very quiet and developed, with some very light $114 trade in Texas on Tuesday evening. Trade will likely hold off until the end of the week, but the market pullback today will tighten packer resolve. Retail carcasses were stronger at midday, with choice carcasses gaining 1.59 to 236.36, and select up 3.55. to 225.58 on light to moderate demand. The strong retail market should help bolster cash markets, but that has been difficult to see. Lastly, the market may be looking toward Friday’s Cattle on Feed report, and squaring positions. Money flow has moved into the cattle market recently, so a form of correction may be necessary for longer-term strength. The weakness in the live cattle market carried over into the feeder cattle market, which posted strong losses. Mar feeders dropped 2.350 to 138.425, and Apr feeders slipped 1.850 to 142.750. Technically, the markets are still in an uptrend, but today’s price move is challenging the bottom of the range and key support levels. Tomorrow’s price action will be key.

LEAN HOG HIGHLIGHTS: Hog prices traded mostly lower, led by the Apr contract dropping 1.275 to 84.900, and Jun hogs 0.250 lower to 92.625. The upward momentum in the Apr contract slowed on Tuesday, and follow-through selling occurred today. The Apr contract saw a strong run and was overbought and overvalued. Today’s move may be the start of that correction. Difficult weather has supported the cash market and limited some hog movement. Estimated hog slaughter is 491,000 hogs today, but recovering from lower kill totals earlier in the week. This pressure on hog movement has shown in the cash index, which has traded strongly higher. The index traded another 0.97 higher today to 75.51, its highest levels since October. The strength in Apr futures has pushed a premium of 9.390 over the index, limiting potential upside. It will still come down to demand. Pork carcass value traded 3.29 higher to 93.00, recovering off yesterday’s soft close. Movement was moderate at 155. Loads. The strong demand has been the key to this rally, and they will be the key to monitoring the pullback. Most of the weakness was in the front months, as deferred contracts stayed supported or showed mild gains.

Top Farmer Midday Update 02-17-2021

CORN

  1. Mar down 1 @ 5.51 & Dec down 2 @ 4.55
  2. Net drying is expected across a majority of Argentina through next Tuesday
  3. Southern Brazil will be dry and could be a concern for any newly planted corn
  4. Energy markets & crude markets are up – supportive to futures
  5. Funds are estimated to be long 377,000 of corn

SOYBEANS

  1. Mar down 2 @ 13.82 & Nov flat @ 11.85
  2. Strong US dollar and better Brazil harvest weather weaken market
  3. Jan US NOPA soybean crush 2nd largest monthly crush of 184.654 mb
  4. Conditions in much of Brazil will continue to be favorable
  5. Rains in central & northern Brazil continue to slow harvest – expected for the next week
  6. Palm oil, bean oil, and canola markets all higher – lending support
  7. Funds maintain estimated combined long roughly 170,000 contracts of soybeans

WHEAT

  1. Mar down 17 @ 6.40, Mar KC down 14 @ 6.22, Mar MNPLS down 12 @ 6.29
  2. US southern Plains wheat areas will see showers across the south today
  3. Temps will trend warmer through this week for US – focus will now return back to drought
  4. Australia’s latest crop estimate puts total production at record 33 mmt
  5. Wheat sales are running down 2% to stay on USDA’s pace
  6. Paris milling futures down today adding pressure to futures

CATTLE

  1. Apr LC down 1.95 @ 123.85 & Mar FC down 2.25 @ 138.55
  2. FC continue to be leery of corn prices
  3. April cattle trading at a large premium to cash
  4. Today’s slaughter est. at 107K head
  5. Cash trade may be unlikely with power outages & complications from cold
  6. Open interest gained 3,820 for April futures & lost 550 for March FC

HOGS

  1. Apr hogs down 0.42 @ 85.72 & Apr Pork Cutout up 0.17 @ 92.52
  2. Technical indicators are at overbought extreme and premium cash
  3. Once weather returns to normal cash prices could decline
  4. Hog slaughter estimated at 468K head
  5. Cash lean index @ 75.51 up 0.97 for 2/15
  6. O/I: +36 positions for April hogs & pork cutout futures -37 positions

Top Farmer Closing Commentary 02-16-2021

CORN HIGHLIGHTS: Corn futures finished with a bang as prices closed near the daily high with Mar gaining 13-1/2 cents and Dec up 9 at 4.57-3/4. Mar finished the day at 5.52-1/4 with the high for the day at 5.52-3/4. Sharp gains in wheat, due to cold weather and expectations for additional feed usage as cattle weight gain will be limited due to an arctic blast that makes its way south to Texas, provided support as did short covering. Last week’s negative reversals look scary on charts and yet today’s jump goes a long way to suggest selling interest is limited on price setbacks. Export inspections at over 52 million bushels were termed supportive and bring the total year-to-date figure to 987 million bushels. This is an increase of 84% from a year ago. Total export sales are projected at 2.60 billion. Wet weather forecast for parts of Brazil will delay soybean harvest and consequently corn planting.

SOYBEAN HIGHLIGHTS: Soybean futures closed firmer gaining 12-3/4 cents in Mar, closing at 13.84-3.4 and 12-3/4 higher in Nov which ended the session at 11.85-3/4. Export inspections at just under 30 million bushels were termed supportive and bring the year-to-date total to 1.840 billion bushels. This implies that if projected export sales remain unchanged, nearly 82% of projected sales have already been inspected. Total sales are most recently estimated at 2.250 bb. The technical picture continues to suggest consolidation yet, bullish traders must be very impressed with the market holding the 40-day moving average last week and finishing higher for the third consecutive session. Harvest will pick up steam in South America and this is acting as a wet blanket over the futures market. Yet, there will be harvest delays due to wet weather. Increased acres in Brazil and improved weather the last month suggest a record harvest. Yet, final yield will not be as robust as forecasted early in the year due to weather challenges along the way. In other words, despite good production from South America, U.S. carryout will remain critically tight, suggesting no room for error for the Northern Hemisphere crops. Today’s crush at 184.7 million bushels was larger than expected, also supported.

WHEAT HIGHLIGHTS: Mar Chi wheat up 20-3/4 cents closing at 6.57-1/2 and May Chi up 20-1/4 cents closing at 6.61-1/2. Mar KC wheat up 20-3/4 cents closing at 6.37-1/2, while KC May closed up 20-3/4 cents at 6.43-1/4. Well, for the first time in weeks, wheat got to lead corn versus the other way around. Cold weather we’ve discussed for the past 2 weeks finally hit the Plains and Midwest just as predicted. Kansas has areas hitting record lows this past weekend. It is still widely believed that winter kill will be minimal despite these severe temps due to snow coverage, however, the unknown was enough to attract buyers and threaten the market at least for today. Of course, the real answer to that question can’t be known until spring which should keep prices supported in the meantime. Export inspections were not very exciting this morning, coming in at 392,000 mt versus last week’s 441,000 mt. It’s worth noting the funds are still very attracted to the KC wheat futures. As of last Friday’s Commitment of Traders report, managed money was 60,092 contracts long KC wheat. Now that is both good news and bad, like fellow corn market anytime funds get extremely long it’s supportive to prices but certainly adds the risk of “when do they liquidate those positions?”

CATTLE HIGHLIGHTS: Cattle futures finished mixed to start the week, as Feb cattle lost 1.050 to 16.150, but Apr cattle were 0.625 higher to 125.800. Prices saw good early session strength as Apr through Aug cattle pushed to new contract highs, but last session profit-taking helped scale back the day into choppy type trade. The strong winter storm and cold temperatures in cattle country are forecasted to moderate throughout the week into next, and that likely brought some profit-taking in the deferred cattle market. Feb cattle is closing in on expiration on the 26th, and the premium over the cash market weighed on those futures. Cash was undeveloped on Tuesday, with bids missing, but asking prices were higher at $116. Cash trade has been key in the cattle market direction the past few weeks, and that will be the case again this week. Packer margins remain strong, and hopes are that reflects in the cash trade. Retail values help promote those packer margins, and they were strong to start the week. At midday, choice carcasses gained 2.10 to 234.54, and select was 0.12 higher to 221.53. Movement was light at 33 loads. The strength in retail carcasses may be attributed to some restocking as grocery saw some run for items before the strong winter storm and temps this past weekend. This is a seasonal window that retail values can soften, as choice carcasses were 1.29 lower overall last week. The feeder cattle market finished mixed, with Mar feeders dropping 0.075 to 140.775, and Apr down 0.125 to 144.600. Bear spreading was seen in the feeder market, with strength noted in the deferred contracts. A strong push higher in the grain markets help put weight on feeders today. That weakness likely carried over and pressure live cattle as well.

LEAN HOG HIGHLIGHTS: Hog prices traded higher again on Tuesday, as Apr hogs gained 0.975 to 86.175, and Jun hogs finished 0.975 higher to 92.875. Despite the strength, Apr hogs were in consolidation trade, with its daily limits within the range of Friday. The hog market has been supported by the strong winter storm and cold temperatures recently. Now that forecasts may be starting to moderate, it could be taking a pause to look for direction. The winter weather has put pressure on carcass weight and hog movement, affecting total weekly production. Hog carcass weight softened each day last week, and are quickly moving to try and get even with last year. Estimated hog slaughter for today is 419,000 (70,000-80,000 under last week) but packers have expanded Saturday kill to try and catch up. Nonetheless, the weather in the face of strong demand has elevated the hog market. Carcass value was softer today at midday, dropping 0.64 to 90.62, but currently, pork carcasses are trading near $25 higher than last year at this time. This has helped the cash market, and the cash index. Today, the index gained 2.18 to 74.54, as packers are pushing cash bids to pull in hogs despite the weather. The trend in the hog market is higher, but prices are in overbought territory, which can make the market cautious in this window.

Top Farmer Midday Update 2-8-21

CORN

  1. March up 15 @ 5.64 & Dec up 6 up 4.58
  2. Weekly exports at 1.576M mt up from last wk’s 1.104M mt
  3. Massive reduction in estimate for China corn stocks – down 64.3 mt – smallest in 5 years
  4. Argentine weather was dry Friday-Sunday – good subsoil moisture carried on normal crop development
  5. USDA tomorrow likely to reflect tightening balance sheets – higher prices needed to ration corn
  6. Russia & Argentina battle for wheat export business versus balancing their country’s food inflation

SOYBEANS

  1. March up 22 @ 13.89 & Nov up 20 @ 11.80
  2. Weekly exports at 1.8M mt up from last week’s 1.792M mt
  3. Daily export sale of 133K mt to Philippines
  4. Brazil experiencing good drying conditions – improved summer crop as a result
  5. USDA still expected to tighten US ending stocks to 123 mb from last month’s 140 mb
  6. Rains continue to slow harvest & transport in Brazil for 2020/21 crop

WHEAT

  1. March up 14 @ 6.55, KC March up 13 @ 6.38, MNPLS March up 10 @ 6.46
  2. Weekly exports at 441K mt up from last wk’s 396K mt
  3. Bitter cold in N, Dakota & Montana without adequate snow coverage – some winter kill suspected
  4. Tomorrow’s USDA report not expected to make any real changed – wheat likely to follow corn’s directive
  5. Winterkill risks are said to be higher in Russia – US wheat still under drought concerns
  6. Tender for wheat currently the Philippines are looking for 230K mt of feed wheat

CATTLE

  1. Feb LC up .42 @ 117.15 & March FC down .50 @ 137.77
  2. Beef production for the week up 5.4% from last year
  3. Corn surge adding pressure to FC market today
  4. First notice day for Feb cattle today
  5. Today’s slaughter est. at 114K head
  6. Cash trade last seen at 114 & @ 135.65, down .62 for 2/4 for FC cash index
  7. O/I: -6062 contracts for Feb LC & O/I: -969 contracts for March FC

HOGS

  1. February Hogs up 1.20 @ 72.17 & Feb Pork Cutout up .92 @ 83.40
  2. Still no sign of peak with China futures up 4% today
  3. Recent reports highlighted severe disease outbreaks in world’s largest pig herd
  4. Last trading date for Feb hogs & pork cutout Friday, 2/12
  5. Hog slaughter estimated at 491K head
  6. Cash lean index @ 69.27, up .18 for 2/4

Top Farmer Closing Commentary 2-5-21

CORN HIGHLIGHTS: Corn futures finished mixed with March losing 1-1/2 cents, closing at 5.48-1/2 and December unchanged at 4.56-3/4. For the week, March reached a new contract high at 5.58 and closed 1-1/2 higher compared to last Friday. December gained 6-1/2 compared to last week. Outstanding export sales this week, coupled with an expectation for a smaller crop in Argentina provided underlying support. Farmer selling also likely picked up. Many producers we have recently talked with have suggested they have stepped up sales due to good price and time of year. Moving forward, attention will focus on next week’s Supply and Demand report and South American production. Exports were trimmed 100 mb last month, and expectations are that The USDA will raise the yearly estimate after strong sales to China this month. However, adjustments may not come until the March report. The next big event for corn markets worldwide is South American crop estimates. Argentina and Brazil first crops are expected to be lower than first anticipated; however, the big crop that will grab the world’s focus is the second crop for Brazil. We would argue a less than ideal start could make it difficult for an average or above average crop.

SOYBEAN HIGHLIGHTS: Soybean futures were the recipient of bear spreading, as March futures closed 5-3/4 lower at 13.66-3/4 and November finished up 0-3/4 at 11.61. For the week, March lost 3-1/4 cents and November gained 18. Last week’s friendly hook reversal and this week’s positive gains for new crop suggest prices are trying to buy acres. Thoughts of slowing export business as the Brazilian crop becomes more available may have weighed on the front months today. On Tuesday, February 9, the next USDA report is due for release. Pre-report estimates suggest a steady or slightly lower projected carry out from last month’s 140 mb. Excellent world demand and stronger than expected exports this week may eventually be figured into the USDA’s projected carryout. Most analysts, however, are not looking for a change on the February report but suggest that if there are changes, they will come in March as data for exports and crop sizes for South American will be more finely tuned. For now, the market is in a very precarious position. On the one hand prices have held together well this week with good export sales and a lack of farmer selling. On the other hand, high prices tend to eventually weigh on themselves. The bigger picture suggests consolidation. Our bias is the market is slow to ration inventory and may be too comfortable anticipating ample southern hemisphere supplies. Tight world vegetable oil supplies provide continues support as well.

WHEAT HIGHLIGHTS: Mar Chi wheat up 3 3/4 cents closing at 6.41 1/4 and May Chi up 4 1/2 cents closing at 6.45 3/4. Mar KC wheat up 6 1/2 cents closing at 6.25 1/4, while KC May closed up 7 cents at 6.30. For the week, March wheat is down 21 3/4 cents from this time last week and KC March down 12 3/4 cents. However, prices have yet to break support levels, so from that standpoint, there isn’t much to be excited about one way or another. Next week cold weather is expected in much of the Plains and Midwest; however, at this time it’s not believed a lot of damage will be incurred from the cold except in some areas of Montana. US dollar did not help the market this week, with a high today of 91.60 – a price not seen in two months. However, it looks like it will not close there as current price as of this writing is 91.00. There hasn’t been a lot to report this week for the wheat market. Exports were friendly with exports over 640,000 mt. Yesterday it was also reported that Russia is looking to move to a “formula-based” export tax versus just a flat one, that was rumored to begin in July and now they are claiming to start that June 1. If prices were to stay where they are now, that could be the equivalent of $2 a bushel – this once again is pushing Russian wheat growers to export faster than normal which they were already doing ahead of the March 1 export tax increase. Next week it is expected the USDA will trim US and the global wheat stocks, but it’s also expected to still be a record number so there is likely not a bullish surprise hiding in next week’s report for wheat. The variable for the wheat market is weather. We will have to wait and see if there is any long-term damage from the drought here in the US and the weather that is still affecting major growing areas in Southern Russia.

CATTLE HIGHLIGHTS: Quiet day in the live cattle market, as prices finished mixed, with strength in the front month cattle. February cattle gained 0.275 to 116.725, and April finished .025 higher to 123.775. Deferred contract finished with small losses ranging from 0.100 to 0.275 lower. For the week, April cattle gained 1.925, and posted their highest weekly close since January of 2020. With the strong weekly close, and trading above the reversal resistance from last Friday, April cattle are poised to challenge the contract high of 124.500 from last January. June cattle have already made that move, gaining 2.375 this week, and establishing a new contract high. February option expiration and developing cash trade helped supported the front of the market today. Cash trade firmed from the start of the week, with most trade being caught at the $114 level, $1-2 higher over last week. With the market holding a strong demand tone, and cold weather forecast across the Midwest next week, expectations will be for cash trade to continue to trend higher. Retail values were firmer at midday, as choice carcasses gained 0.26 to 234.51, and Select 1.03 to 221.47. Moderate product movement at 52 loads. The technical trend in the cattle market is still working higher, and the ability to hold gains today, keeps that trend intact. Feeder cattle saw selling pressure on Friday, led by the March feeders, losing 1.225 to 138.275. Deferred contract saw limited losses ranging from .250 to .550 lower, seeing light profit taking. For the week, the most active April contract gained 1.450 for the week. Feeder market has been trying to balance higher prices in the grain market, but still reflect the strength in deferred live cattle futures. Feeder prices have more room to move lower, to challenge the bottom of the trading range, and may be moving into a consolidation pattern overall.

LEAN HOG HIGHLIGHTS: Hog futures finished mostly higher on Friday with deferred contracts ending strongly. The February contract was the laggard, losing 0.050 to 70.975, but April hogs gained 1.00 to 80.330, and June was up 0.775 to 89.550. For the week, April hogs gained 3.650 and closed at new contract highs. This was also true for the remaining deferred contracts, posting new contract highs at the end of the week. The February contract stays pressured by the cash market and the lean hog index. The index traded 0.62 lower to 135.65. The index is still at a 1.8850 discount to the February contract, limiting gains with February expiring next Friday, February 12. The demand side of the market is supporting the deferred contracts. After a strong close of pork carcasses yesterday, gaining 5.60, midday values held those gains, slipping 0.14 to 85.69 today on 184 loads. This demand strength and the outlook for tighter hog supplies moving later into 2021, has kept the buying support under the hog market.

Top Farmer Midday Update 2-5-21

CORN

  1. March down 1 @ 5.49 Dec up 1 @ 4.52
  2. Argentina entering a week’s worth of drying & will raise a little crop stress by next wk
  3. Daily export sale of 101,600 mt – delivery to unknown destination
  4. In southwest US, difficult to source corn for the summer for feedlots
  5. US export sales in corn are 91% of the USDA number
  6. Record weekly exports reported yesterday & lower China stocks indicate higher prices
  7. CME raises corn futures margin from 1400 per contract to 1500
  8. Argentine gov’t still debating increases on food exports to control inflation

SOYBEANS

  1. March up 7 @ 13.79 & Nov up 8 @ 11.68
  2. Although some areas will get too much rain, not going to make large impact in Brazil
  3. In Brazil there are 11 million tons of vessels waiting to load soybeans
  4. US export sales in beans are 97% of the USDA number
  5. Trade guess is for USDA to lower ending stocks for the US from 140 mb to 123 mb
  6. Brazil still expecting a record crop despite planting & harvest delays

WHEAT

  1. March up 2 @ 6.39, KC March up 3 @ 6.22, & Mar MNPLS up 1 @ 6.33
  2. Wheat damage possible in Montana if significant snow doesn’t precede the temps
  3. Drought remains a concern across much of the interior of western US
  4. UN index global food inflation up 8 months in a row; 6 ½ yr highs
  5. CME raises wheat futures margin from 1800 per contract to 1900
  6. Russia is accelerating plans to switch to a formula-based tax on wheat exports – June 1

CATTLE

  1. Feb LC up .07 @ 116.52 March FC down 1.10 @ 138.40
  2. With premium over cash, will need steady flow of bullish news
  3. Volatility of corn prices pressure FC today
  4. Last trading day for Feb. live cattle options
  5. Today’s slaughter est. at 116K head
  6. Cash trade asking 115 for LC & 136.27 down .17, for 2/3 for FC cash index
  7. O/I: -1052 contracts for Feb LC & O/I: -385 contracts for March FC

HOGS

  1. February Hogs up .10 @ 71.12 & Feb Pork Cutout untraded @ 81.87
  2. No sign of peak with surge higher in pork values
  3. Could see profit taking today or early next week as futures go higher
  4. Hog slaughter estimated at 492K head
  5. Cash lean index @ 69.09 down .08 for 2/3
  6. O/I: -1324 positions for hogs & pork cutout futures +78 positions

Top Farmer Closing Commentary 2-4-21

CORN HIGHLIGHTS: Corn futures traded both sides of steady throughout the session, finishing today mixed with nearby March losing 2 cents, closing at 5.50 and December gaining 0-3/4 cents, finishing at 4.51-3/4. Today’s trading range in March corn was 11 cents, but it appeared the market lacked energy in either direction. Export sales at 292.8 million bushels were outstanding and a marketing year high but may have been considered somewhat old news, as most of these sales were to China and announced last week. Nonetheless, the USDA forecast for total sales this year is 2.550 bb, which suggests this figure maybe too low. Year to date export sales at 2.209 bb, as compared to expectations, have reached 86% of the forecasted total. Obviously, the trade believes that South American crop will become more available as the season wears on, but with such a strong pace the first five months, any hiccup with the southern Hemisphere crop could mean prices need to be rationed. Soybean sales were strong today at over 30 million bushels, which continues to suggest to us that soybean prices have room to work higher which will help to pull corn futures higher as well.

SOYBEAN HIGHLIGHTS: Soybean futures ended today’s session quietly, as nearby March gained 1-1/4, closing at 13.72-1/2, and November up 4 cents at 11.60-1/4. Another week of solid exports was noted with today’s figure at 30.3 million bushels. The year-to-date total is now 2.155 billion bushels. This implies that sales to date are 96.7% of the forecasted 2.230 billion. We are somewhat perplexed that futures are not gaining strength and rationing inventory. The logical explanation is that buying interest will turn to South America in the weeks ahead, and the US will quickly lose any additional new purchases from China. In addition, there is a Supply and Demand report next week as well as the Chinese New Year, a week-long celebration which begins on February 12. Simply put, some believe business will quickly dry up. Recent rains have created some harvest delays yet at the same time logic would argue rain makes for better yield potential in other areas that are not receiving too much moisture. That may be the bigger story as the trend of declining crop expectations from South America may have turned the corner. Nonetheless, we stay supportive and believe the market is primed to move above 14.00 soon on its way to 15.

WHEAT HIGHLIGHTS: Mar Chi wheat down 10 3/4 cents closing at 6.37 1/2 and May Chi down 9 1/2 cents closing at 6.41 1/2. Mar KC wheat down 6 3/4 cents closing at 6.18 3/4, while KC May closed down 6 1/4 cents at 6.23. Wheat down today although still range bound, bouncing from recent highs of 6.60 in January. Today’s exports were friendly with an export number of 643,100 mt – that’s above the highest trade guess of the week, which was 550,000 mt. China was the top buyer which was no real surprise. Russian government announced a new wheat export tax of June 2. The tax is described as 70% of the difference between a wheat price based on export contracts, starting April 1 and $200 per metric ton. Again, this may push Russian farmers to be even “more” aggressive in selling than they have been, which could put a short-term damper on futures. One cannot forget that the USDA is still calling for a record production globally for wheat. Traders are estimating the USDA’s upcoming report might trim US ending stocks to 834 mb from January’s estimate of 836 mb. Global ending stocks are expected to trip from 313.19 mt to 312.86 mt – still a record projection (current record is 300.62 million tonnes from 2019-2020).

CATTLE HIGHLIGHTS: The live cattle market finished higher on Thursday, as prices pushed firmer into the close. February cattle gained 0.975 to 116.450, April cattle led the market higher gaining 1.300 to 123.750, and June cattle crossed the 120 barrier, gaining 0.725 to 120.200. Cattle futures were choppy for most of the session, but prices found some buying momentum going into the close. Cash trade is still slow to developed, but improved bids later in the morning helped fuel the strength. Some light trade in Iowa was noted at $114, and the trend is looking at $1-2 higher than last week. More cash trade will likely develop into tomorrow. In addition, a winter storm moving across northern cattle country will usher in a very cold air mass. The first of the season, helping bring support to prices. February contract is holding a premium to cash, and the market is cautious with February options expiration tomorrow, and First notice day for February futures on Monday, this could bring some volatility. Retail carcasses moved lower at midday, choice carcasses were .28 softer to $235, and select was down 2.13 to 221.26. Load movement was moderate at 63 loads. Weekly export sales were supportive of prices today, as export sales have stayed firm. For the week of January 28, weekly sales totaled 29,800 MT, with South Korea, Japan and China as the top buyer. This export demand and domestic demand has caught the eye of the market, as the prospects of tighter cattle supplies are expected moving into 2021. Technically, June futures pushed through resistance at last week’s high, and April is poised to challenge that level tomorrow. A break of the reversal from last week at 123.900 on April could open the door for some additional technical buying. With the strength in live cattle and relatively quiet grain trade today, feeder cattle finished with moderate gains. March feeders finished 0.975 higher to 139.500, and April feeders gained 0.850 to 142.675.

LEAN HOG HIGHLIGHTS: Hog futures finished mostly higher on Thursday, but pressure from the front month contract limited gains. February hogs saw strong selling pressure, dropping 1.350 to 71.025, while April hogs gained 0.100 to 79.300. Starting the session, hog futures pushed higher, challenging yesterday’s resistance, or in February’s case, pushing to new highs, only to softened into the end of the day. February posted a strong topping reversal signal and may be open to additional long liquidation to end the week. The lean hog index traded 0.30 higher to 69.17 but is still at a 1.850 discount to the February futures, helping limit upside. The hog market was moving into an over-bought condition and may be poised for some profit taking going into the end of the week. The demand picture stays extremely strong, helping support those longer-term prices. Weekly export sales for last week totaled 46,300MT, with China buying 17,900 MT. Pork cutout jumped $6.07 at midday to 86.30, with surge in ham and belly prices. Load count was strong at 155 loads at midday. This demand prospects going into later 2021 help support the longer-term prices, with the prospects of tighter overall hogs supplies that may be in front of the market.

Top Farmer Midday Update 2-4-21

CORN

  1. March down 2 @ 5.50 & Dec down 1 @ 4.50
  2. Could see record weekly sales today after China buying last week
  3. Corn exports at 7.436M – marketing year high
  4. Argentina will experience net drying through weekend
  5. US ethanol production for last week was 936K bls per day down 13.4 from last yr
  6. Trade estimate for USDA’s corn ending stocks: US: 1.392 versus Jan’s 1.552

SOYBEANS

  1. March up 5 @ 13.76 & Nov up 3 @ 11.59
  2. Strong demand continues to suggest extremely tight ending stocks
  3. Delay of 2nd crop could delay shipments of soybeans out of Brazil
  4. Soybean exports at 824K mt – up 77% from last week
  5. Brazil weather is expected to be mostly good for next 2 weeks
  6. Trade estimate for USDA’s soybean ending stocks: US – 123 mb versus Jan’s 140 mb

WHEAT

  1. March down 11 @ 6.37, March KC wheat down 7 @ 6.18, Mar MNPLS down 1 @ 6.34
  2. With supply, may take weather issues or up in grains to add more support
  3. Cold temps next week not expected to damage the wheat crop
  4. Wheat exports at 643.1k MT – up 69% from last week
  5. Putin says Russia’s situation in global food market is worsening.
  6. Trade estimate for USDA’s wheat ending stocks US: 834 mb versus Jan’s 836 mb

CATTLE

  1. Feb LC up .32 @ 115.80 & March FC up 1.17 @ 139.70
  2. With high weights, will need beef prices to trend up
  3. Beef exports at 29,800 mt – increases primarily for S. Korea
  4. Today’s slaughter est. at 113K head
  5. Cash trade asking 115 for LC & 136.44 up .04 for 2/2 for FC cash index
  6. O/I: -2576 contracts for Feb LC & O/I: +114 contracts for March FC

HOGS

  1. February Hogs down .87 @ 71.52 & Feb Pork Cutout down 1.60 @ 81.50
  2. Strong upside momentum as traders see demand surge into spring
  3. Pork exports at 46,300 – increases primarily for China
  4. USD dollar going higher could damper confidence in global demand
  5. Hog slaughter estimated at 493K head
  6. Cash lean index @ 69.17, up .30 for 2/2
  7. O/I: -1692 positions for hogs & pork cutout futures +170 positions

Top Farmer Closing Commentary 2-3-21

CORN HIGHLIGHTS: Corn futures finished with solid gains in both the old and new crop. March closed 9 cents firmer at 5.52, a new contract high close, and December up 4 at 4.51. March futures posted a daily high of 5.52-1/2. Thoughts of overbought after closing higher 7 of the last 8 weeks and some expected improvement to South American weather may have had funds trimming some of their strong long position yesterday and early this morning. Yet, prices rebounded throughout the day on talk that China may be in the market for more corn. As the winter unfolds, strong demand and thoughts of just how important this year’s crop will be to meet world demand is likely keeping farmers less than aggressive sellers. Growing expectations that carryout could be trimmed on future USDA reports to perhaps 1.350 billion from 1.550 billion are also factors keeping prices supported. Recently heavy rains in parts of Brazil are hampering harvest and consequently second crop corn plantings. The next USDA report is out on February 9.

SOYBEAN HIGHLIGHTS: Soybean futures closed firmer with an impressive turn-around as March gained 16-1/2 cents closing at 13.71-1/2. New crop November gained 9 cents, closing at 12.12-1/4. March closed near 30 cents off the low-sitting resistance at the 21-day moving average. Heavy rains in parts of Brazil are creating a slow down to harvest. Loadings on ships is behind schedule, keeping the momentum supportive for US soybeans. Continued talk of a trucker’s strike is getting traction as well as supportive. We were impressed with today’s strong turn-around, yet the market still is not strong enough in our opinion to ration demand. For the most part, prices have been volatile yet rangebound in recent weeks. The prospect for record, or close to record South American production is still a fact and a wet rag on future price rallies. The key, however, is whether the crop can be harvested quick enough to squelch near term US demand for both beans and bean products. Meal and oil charts look healthy with expectations that tight world vegetable oil will allow soybean oil futures to trade to new highs in the next couple of weeks.

WHEAT HIGHLIGHTS: Mar Chi wheat finished the session with modest gains in both old and new crop. March closed 3-1/2 cents higher at 6.48-1/4 and July up 3 at 6.33. Prices finished off their low, posting hook reversals following corn and soybeans higher. After sliding more that 70 cents from the contract high, price found support at the 50-day moving average early in the session. Improved moisture for much of the wheat belt was considered the primary reason for the recent slide. Technically, selling was a feature as well. Yet, we believe that supplies will tighten as less than ideal weather conditions throughout the world and major wheat exporting counties considering limiting shipments will have the trade buying price dips. Russia is expected to limit sales and currently the US is considered some of the cheapest wheat on the world market. The next USDA report due for release that will impact prices is February 9. We would not be surprised if export expectations are increased for the US. Bitter cold forecasted for next week is considered friendly.

CATTLE HIGHLIGHTS: The live cattle market finished mixed with selling pressure in the front month cattle. February cattle lost 0.500 to 115.475. April cattle slid 0.075 to 122.450. The deferred contract showed strength, led by June cattle up 0.675 to 119.475. The February contract is looking at options expiration on Friday and “first notice day” on Monday, and that will likely keep prices pressured with those two events. The cash market got a start today with the fed cattle exchange trade. Most lots received $113.75 bids, which was higher than last week’s total, but still below market expectations. With the strong premium of the front month to cash, this triggered the selling pressure. Countryside cash is still undeveloped for the week and will likely hold off until late tomorrow or even into Friday. Asking prices remain firm at $115 level, and $180 for dress trade. Boxed beef values slipped at midday, with choice carcasses down 1.34 at $235.42. Select was 0.98 lower to 224.06. Even with carcass values over the $230 price point for choice, demand and product movement have been good. Today at midday, 105 loads traded. Deferred contracts are optimistic in a tighter supply picture coming and saw modest gains today. Prices are still trying to recover and challenge the highs from January 26. This will be a large area of resistance to work through at 118.900 on top of the June futures, if broken through to the topside, opens the door for strong money flow and technical buying. Feeder cattle finished mixed as well, with March feeders down .600 to 138.525, and April down 0.425 to 141.825. The feeder cattle market started with strong gains early in the session, but as grain markets recovered, and live cattle slid, feeders followed suit. The close technically on the front month was disappointing and could open the door for additional long liquidation, especially if grain prices maintain or extend their strength from today’s close.

LEAN HOG HIGHLIGHTS: Hog futures finished with solid gains in the front month contracts again on Wednesday. February hogs gained 0.825 to 72375, and April hogs led the market higher, gaining 1.125 to 79.200. The April fell just short of the 80.000 barrier before softening into the close. This will be a key psychological barrier to cross and will likely have some heavy selling pressure. Technical buying keeps money flow into the hog market after yesterday’s strong close. With that strength, April and the remaining deferred lean hog contracts posted new contract highs in today’s trade. The demand side of the market is the strength in hogs. Carcass values were 0.84 higher at midday to 81.94 with a good load count at 191 loads. The optimism of future demand keeps money flowing into the hog market. A Reuter’s article relaying issues with swine disease beside ASF in China are bolstering the Chinese domestic hog prices. Incidents of PED and Foot-and-Mouth Disease are pressuring some production and slowing the recovery. Weekly export sales will likely set the tone for tomorrow’s trade. Last week’s 52,900 mt sale week was encouraging, and demand pushing that level will keep the buyers in the market. The lean hog index traded 0.60 higher to 68.87, still trading at a discount to the Feb contract can limit gains, especially as the contract moves closer to expiration.

Top Farmer Midday Update 2-3-21

CORN

  1. March down 4 @ 5.39 & Dec down 3 @ 4.44
  2. Brazil’s 2020 production forecast at 109 million tonnes – 6 million above last yr
  3. Argentina’s 2020 production forecast at 46.5 million tonnes, 4.5 million less than last yr
  4. Argentina crop weather remains favorably rated especially for a La Nina year
  5. Mexico purchased 111,000 metric tons of corn on Tuesday
  6. USDA estimates China’s corn usage will exceed production by 25 mmt
  7. US corn is still the world’s cheapest feed grain all the way into late spring
  8. Analysts project US corn exports will have to be raised by 250-400 mb as the corn export pace is record large

SOYBEANS

  1. March up 3 @ 13.58 & Nov down 2 @ 11.49
  2. Brazil’s production for 2020 forecast at 133 million tones, 5 million above last yr
  3. Argentina’s 2020 production forecast at 48 million tonnes, 1.7 million less than last yr
  4. Recent rains in South America improved crop potential there
  5. Brazil’s harvest is lagging – 1.8 mmt soybeans shipped in January is reported to be the lowest since 2013
  6. Despite delays, analysts think the total SA soybean harvest will be record large at 132-133 mmt

WHEAT

  1. March down 15 @ 6.29, March KC down 12 @ 6.06, March MNPLS down 10 @ 6.11
  2. Russia & Ukraine weather will be warmer than usual allowing for snow to melt
  3. Russia has doubled its export tax beyond March 1st
  4. February is typically a time of seasonal weakness for wheat futures
  5. Continued underlying support from expanding dryness in the western and southern plains hard red winter areas
  6. Bitter cold moving down from the Canadian prairies through northern plains and Midwest could bring the threat of winterkill

CATTLE

  1. Feb LC up .125 @ 116.100 & March FC up .550 @ 139.675
  2. In position to at least experience a technical correction
  3. Today’s slaughter est. at 118,000 head
  4. Asking prices for southern fed cattle have been noted at $115 – about $2 higher than last week
  5. Packers may resist by pointing towards the unseasonably heavy dressed weights noted so far this year
  6. Demand has been strong, retail Choice carcasses trading at $236

HOGS

  1. February Hogs up .550 @ 72.100 & Feb Pork Cutout up .19 @ 82.57
  2. Strong technical action seeing follow through buying this morning
  3. Seems to be plenty of pork available if China imports slow
  4. April lean hog futures broke through last week’s contract high at $77.60
  5. Hog slaughter estimated at 496,000 head
  6. Futures gains are generally supported by industry fundamentals (trending lower daily slaughter numbers and resilient export outlook)

Top Farmer Closing Commentary 2-2-21

CORN HIGHLIGHTS: Corn futures finished firmer today in good price action, lifting off session lows into the close. March corn gained 2 1/4 to 5.49 1/4, and May corn was 1 cent higher to 5.48 1/2. The march contract has nearly a 17-cent trading range today, trading to a new contract high at 5.55 3/4 to a low of 5.39, before rallying into the close. The picture between demand and available supply is one of questions in the market, and the market is looking for more clarity going into the Feb 9 USDA report. Though China wasn’t reported in the market to start the week, the USDA announced two export sales this morning. Japan bought 110,000 mt and Mexico bought 125,730 MT of corn for the current marketing year, as some more traditional customers secured supplies. Weekly corn export inspections were announced today at 1.105 MMT, the lower end of expectation, but the USDA adjusted prior reports, tightening the supply picture. Pressuring the market is a weather forecast that overall friendly for South America, as the Argentina crop develops, and Brazil is harvesting soybean and moving to planting the second corn crop. The corn market looks strong, and the technical trend continues higher. With prices at these levels, the bulls will need demand news to keep buying active, so daily export announcement are keys. Even at these levels, the U.S. has the cheapest corn in the world for the export market, and that should stay active in the near-term.

SOYBEAN HIGHLIGHTS: Soybean futures at the beginning of the day looked to mark a nasty day in the soybean sector with early losses of 20 cents or better. However, March soybeans returned with minor losses with a close down 4 ¾ cents at 13.65 ¼. and November posting gains of 11 cents at 11.54. Weather has improved in South America, although now rains are continuing to keep harvest at bay, current harvest is reported under 1% complete, compared with the average of 4%. The trucker strike is still keeping uncertainty in whether shipments will make it to port on time, but currently this is more a speculative problem versus a reality. China continues to be an aggressive buyer, although no daily export sales were posted today. China’s soy equivalent is still close to $18.00 a strong indicator they won’t be abandoning US soybeans just yet, however worth noting US is close to 40 cents higher prices than South America, which would lead one to believe they might shift the aggressive buying there once shipments become available. It will be interesting to see if the USDA continues to trim ending stocks for the US, and if that number starts to encroach on 100 mb or less, it is hard to see why soybeans will not continue to rally looking for a price that finally pushes buyers away from the US.

WHEAT HIGHLIGHTS: Mar Chi wheat down 12 cents closing at 6.51 and May Chi down 10 3/4 cents closing at 6.51 3/4. Mar KC wheat down 12 3/4 cents closing at 6.25 1/4, while KC May closed down 13 cents at 6.28 1/2. Wheat market basically gave back Friday’s gains. Unlike corn which proceeded to fight its way out of the red and into positive gains today, wheat just had more fundamental pressure than corn and couldn’t push back to a positive close. Russian farmers are aggressively selling for a multitude of reasons. Feb 15 starts the beginning of their first export tax, only to be followed by a larger 50-Euro tax starting March 1. Aside from that, there is talk of Russia implementing a 70% wheat export tax on exports – which is not an entirely new idea but was speculated to implement July 1 – and now that date has been backed up to June 1. Russia of course is desperately trying to stabilize food prices, but if you are a wheat grower you are attempting to get anything to market asap ahead of these taxes, which of course puts pressure on all wheat markets, not just US. US hard red winter will lose snow cover this week and will need to receive more to protect against the cold front moving in across the plains later this week. Combine this with weekly export inspections only coming in at 397K mt versus 572K mt last week, and it certainly doesn’t paint a bullish day in the market for wheat futures.

CATTLE HIGHLIGHTS: The cattle market finished mixed to higher to start the week, as prices tried to recover after last week’s difficult close. Front month live cattle dealt with slight selling pressure, as February cattle lost 0.175 to 114.875, and April cattle finished 0.150 lower to 121.700. June cattle were 0.625 firmer to 118.225, as strength stayed in the deferred contracts. Front month cattle are still under the influence of large production and heavy slaughter. Last week, beef production was 550.1 million pounds, steady with last week, but 4.6% over last year. This was fueled by a jump higher in carcass weight, gaining 5 pounds over last week at 844 lbs. Last year, average carcass weight for the week were at 827 lbs. this heavy production keeps pressure on the cash market to perform. Cash trade was undeveloped today, but packer inquiry should be good this week. Strong retail carcass values have improved margins for the packer, and the demand has been good, helping chop into the supply picture. Carcasses maintained their upward trend at midday again today, with choice carcasses gaining 1.82 to 235.77, and select gaining 2.98 to 225.68. Demand at midday was light to moderate at 32 loads. The cash market will set the tone for the week but will likely take time to develop this week. The deferred contract saw a bid from Friday’s cattle inventory report. The report showed a clear top in cattle number and beef cattle inventory, keeping the supply picture much more manageable in the months ahead. After a week technical close on Friday, today’s price action was supportive on the long-term charts, but front month were in consolidation. Feeder cattle also fought for higher gains, as March feeders gain .200 to 137.925 and April was up .325 to 141.075. The strength in deferred live cattle contracts and a weak to steady grain market helped support the feeders today.

LEAN HOG HIGHLIGHTS: Hog futures finished mixed on Monday, with weakness in the front-end contracts. February hogs lost 0.250 to 69.550, and April hogs dropped 1.150 to 75.500. Strength was seen in the summer months as July on had gains in today’s trade in a bear spread market. April hogs saw some profit taking, follow through after Friday’s weak close. Despite finishing higher on Friday, April hogs traded towards the bottom of the trading range for the day. The April contract broke and is testing the 10-day moving average and support at the $75 level. Overall, the market is still in an uptrend, so this move may be limited. The key will be the fundamentals this week. Pork production last week is starting to trend lower at 587.1 million pounds, down 2.4% from last week and 1% under last year. This will be key going forward, given the strong demand. Slaughter is starting to turn lower, estimated today at 481,000. The cash market will stay key for the Feb contract. The lean hog index gained 0.11 to 67.40 but is still at a 2.15 discount to the futures, limiting gains. Retail carcass values have trended higher and that maintained today. At midday, pork carcasses were 1.14 higher to 86.50 with 122 loads. The pork product index gained 0.32 to 82.38, reflecting the past 5 days of move in the product market. The expectation is for hog numbers to trend lower going forward, and the tighter supply picture is helping maintain those spring/summer hog prices. The technical picture stays supportive, and that should keep the hog market supported going into next week, but prices in the front months are testing support at the bottom of the range.

Top Farmer Midday Update 2-2-21

CORN

  1. March down 5 @ 5.44 & Dec down 1 @ 4.47
  2. Brazil’s 2020 production forecast at 109 million tonnes – 6 million above last yr
  3. Argentina’s 2020 production forecast at 46.5 million tonnes, 4.5 million less than last yr
  4. Argentina crop weather remains favorably rated especially for a La Nina year
  5. Daily export sale of 115K mt – delivery Mexico
  6. Bears pushing market lower as Brazil harvest nears
  7. Nebraska producers concerned that feeders cannot buy summer corn
  8. Corn export trade estimate for Thursday 1M-1.350M mt

SOYBEANS

  1. March down 10 @ 13.55 & Nov down 2 @ 11.52
  2. Brazil’s production for 2020 forecast at 133 million tones, 5 million above last yr
  3. Argentina’s 2020 production forecast at 48 million tonnes, 1.7 million less than last yr
  4. Brazil’s driest region remains in the northeast, rest of Brazil received adequate rains
  5. No new sales combined with S. American harvest pressure prices
  6. USDA says 194 million bu. of US soybeans crushed in December
  7. Soybean export trade estimate for Thursday 1.1M-2.125M mt

WHEAT

  1. March down 4 @ 6.47, March KC down 2 @ 6.23, March MNPLS down 1 @ 6.31
  2. Russia & Ukraine weather will be warmer than usual allowing for snow to melt
  3. US bracing for arctic surge to hit this weekend and early next week in Plains & Midwest
  4. Strength in US dollar pressuring prices alongside corn down today
  5. Wheat export trade estimates for Thursday – 350-550K mt

CATTLE

  1. Feb LC up .85 @ 115.72 & March FC up .87 @ 138.80
  2. In position to at least experience a technical correction
  3. Boxed beef cutout up at 235.68– choice/select 10.57
  4. Today’s slaughter est. at 119K head
  5. Cash trade last seen at 113 & @ 136.43 up .41 for 1/29 for FC cash index
  6. O/I: -2199contracts for Feb LC & O/I: -652 contracts for March FC

HOGS

  1. February Hogs up 1.25 @ 70.80 & Feb Pork Cutout up .50 @ 82.90
  2. Seems to be plenty of pork available if China imports slow
  3. April’s high of 77.60 holding key resistance
  4. Hog slaughter estimated at 495K head
  5. Cash lean index @ 68.27 up .86 for 1/29
  6. O/I: -1490 positions for hogs & pork cutout futures +80 positions

Top Farmer Closing Commentary 2-1-21

CORN HIGHLIGHTS: Corn futures finished firmer today in good price action, lifting off session lows into the close. March corn gained 2 1/4 to 5.49 1/4, and May corn was 1 cent higher to 5.48 1/2. The march contract has nearly a 17-cent trading range today, trading to a new contract high at 5.55 3/4 to a low of 5.39, before rallying into the close. The picture between demand and available supply is one of questions in the market, and the market is looking for more clarity going into the Feb 9 USDA report. Though China wasn’t reported in the market to start the week, the USDA announced two export sales this morning. Japan bought 110,000 mt and Mexico bought 125,730 MT of corn for the current marketing year, as some more traditional customers secured supplies. Weekly corn export inspections were announced today at 1.105 MMT, the lower end of expectation, but the USDA adjusted prior reports, tightening the supply picture. Pressuring the market is a weather forecast that overall friendly for South America, as the Argentina crop develops, and Brazil is harvesting soybean and moving to planting the second corn crop. The corn market looks strong, and the technical trend continues higher. With prices at these levels, the bulls will need demand news to keep buying active, so daily export announcement are keys. Even at these levels, the U.S. has the cheapest corn in the world for the export market, and that should stay active in the near-term.

SOYBEAN HIGHLIGHTS: Soybean futures at the beginning of the day looked to mark a nasty day in the soybean sector with early losses of 20 cents or better. However, March soybeans returned with minor losses with a close down 4 ¾ cents at 13.65 ¼. and November posting gains of 11 cents at 11.54. Weather has improved in South America, although now rains are continuing to keep harvest at bay, current harvest is reported under 1% complete, compared with the average of 4%. The trucker strike is still keeping uncertainty in whether shipments will make it to port on time, but currently this is more a speculative problem versus a reality. China continues to be an aggressive buyer, although no daily export sales were posted today. China’s soy equivalent is still close to $18.00 a strong indicator they won’t be abandoning US soybeans just yet, however worth noting US is close to 40 cents higher prices than South America, which would lead one to believe they might shift the aggressive buying there once shipments become available. It will be interesting to see if the USDA continues to trim ending stocks for the US, and if that number starts to encroach on 100 mb or less, it is hard to see why soybeans will not continue to rally looking for a price that finally pushes buyers away from the US.

WHEAT HIGHLIGHTS: Mar Chi wheat down 12 cents closing at 6.51 and May Chi down 10 3/4 cents closing at 6.51 3/4. Mar KC wheat down 12 3/4 cents closing at 6.25 1/4, while KC May closed down 13 cents at 6.28 1/2. Wheat market basically gave back Friday’s gains. Unlike corn which proceeded to fight its way out of the red and into positive gains today, wheat just had more fundamental pressure than corn and couldn’t push back to a positive close. Russian farmers are aggressively selling for a multitude of reasons. Feb 15 starts the beginning of their first export tax, only to be followed by a larger 50-Euro tax starting March 1. Aside from that, there is talk of Russia implementing a 70% wheat export tax on exports – which is not an entirely new idea but was speculated to implement July 1 – and now that date has been backed up to June 1. Russia of course is desperately trying to stabilize food prices, but if you are a wheat grower you are attempting to get anything to market asap ahead of these taxes, which of course puts pressure on all wheat markets, not just US. US hard red winter will lose snow cover this week and will need to receive more to protect against the cold front moving in across the plains later this week. Combine this with weekly export inspections only coming in at 397K mt versus 572K mt last week, and it certainly doesn’t paint a bullish day in the market for wheat futures.

CATTLE HIGHLIGHTS: The cattle market finished mixed to higher to start the week, as prices tried to recover after last week’s difficult close. Front month live cattle dealt with slight selling pressure, as February cattle lost 0.175 to 114.875, and April cattle finished 0.150 lower to 121.700. June cattle were 0.625 firmer to 118.225, as strength stayed in the deferred contracts. Front month cattle are still under the influence of large production and heavy slaughter. Last week, beef production was 550.1 million pounds, steady with last week, but 4.6% over last year. This was fueled by a jump higher in carcass weight, gaining 5 pounds over last week at 844 lbs. Last year, average carcass weight for the week were at 827 lbs. this heavy production keeps pressure on the cash market to perform. Cash trade was undeveloped today, but packer inquiry should be good this week. Strong retail carcass values have improved margins for the packer, and the demand has been good, helping chop into the supply picture. Carcasses maintained their upward trend at midday again today, with choice carcasses gaining 1.82 to 235.77, and select gaining 2.98 to 225.68. Demand at midday was light to moderate at 32 loads. The cash market will set the tone for the week but will likely take time to develop this week. The deferred contract saw a bid from Friday’s cattle inventory report. The report showed a clear top in cattle number and beef cattle inventory, keeping the supply picture much more manageable in the months ahead. After a week technical close on Friday, today’s price action was supportive on the long-term charts, but front month were in consolidation. Feeder cattle also fought for higher gains, as March feeders gain .200 to 137.925 and April was up .325 to 141.075. The strength in deferred live cattle contracts and a weak to steady grain market helped support the feeders today.

LEAN HOG HIGHLIGHTS: Hog futures finished mixed on Monday, with weakness in the front-end contracts. February hogs lost 0.250 to 69.550, and April hogs dropped 1.150 to 75.500. Strength was seen in the summer months as July on had gains in today’s trade in a bear spread market. April hogs saw some profit taking, follow through after Friday’s weak close. Despite finishing higher on Friday, April hogs traded towards the bottom of the trading range for the day. The April contract broke and is testing the 10-day moving average and support at the $75 level. Overall, the market is still in an uptrend, so this move may be limited. The key will be the fundamentals this week. Pork production last week is starting to trend lower at 587.1 million pounds, down 2.4% from last week and 1% under last year. This will be key going forward, given the strong demand. Slaughter is starting to turn lower, estimated today at 481,000. The cash market will stay key for the Feb contract. The lean hog index gained 0.11 to 67.40 but is still at a 2.15 discount to the futures, limiting gains. Retail carcass values have trended higher and that maintained today. At midday, pork carcasses were 1.14 higher to 86.50 with 122 loads. The pork product index gained 0.32 to 82.38, reflecting the past 5 days of move in the product market. The expectation is for hog numbers to trend lower going forward, and the tighter supply picture is helping maintain those spring/summer hog prices. The technical picture stays supportive, and that should keep the hog market supported going into next week, but prices in the front months are testing support at the bottom of the range.

Top Farmer Midday Update 2-1-21

CORN

  1. March down 4 @ 5.43 & Dec down 1 @ 4.44
  2. Weekly export inspections @ 1.104M mt versus 1.391M mt last week
  3. Daily export sales 125K mt to Mexico & 110K mt to Japan
  4. China buying US corn continue to tighten balance sheets and push prices higher
  5. US farmers may plants 94 million acres vs 91 million acres last year
  6. Argentina weather will favor net drying conditions over next 10 days for most areas

SOYBEANS

  1. March down 14 @ 13.55 & Nov up 2 @ 11.45
  2. Weekly export inspections @ 1.792M mt versus 1.978M mt last week
  3. Daily export sale of 133K mt to Philippines
  4. Brazil weather looks closer to normal over next 14 days
  5. Brazil crop still estimated to be 133 million tons
  6. US farmers may plant 91 million acres vs 83 million acres last year

WHEAT

  1. March down 15 @ 6.48, KC March down 19 @ 6.19, MNPLS March down 13 @ 6.29
  2. Weekly export inspections at 396.8K mt versus 523.9K mt last week
  3. Starting June 1st, Russia may have 70% wheat export tax on exports above $220 mt
  4. Restricted precip will occur in HRW wheat production areas in next 2 weeks
  5. US HRW will lose snow cover this week, will need more to protect from incoming cold front
  6. Wheat a follower of corn, Paris and Black Sea futures continue to set the trend as well

CATTLE

  1. Feb LC up .07 @ 115.12 & March FC up .32 @ 138.05
  2. Sweeping reversal from overbought condition
  3. Strong boxed beef prices & resilient pack margins help support prices
  4. Bullish Cattle Inventory on Friday
  5. Today’s slaughter est. at 116K head
  6. Cash trade last seen at 113 & @ 136.02 up .68 for 1/28 for FC cash index

HOGS

  1. February Hogs up .17 @ 69.97 & Feb Pork Cutout up .40 @ 92.85
  2. With large futures premium over cash; need strong exports this week
  3. If US dollar goes higher, puts pressure on futures in short-term
  4. Hog slaughter estimated at 481K head
  5. Cash lean index @ 67.41 up .12 for 1/28
  6. O/I: -2153 positions for hogs & pork cutout futures -16 positions

Top Farmer Closing Commentary 1-29-21

CORN HIGHLIGHTS: Corn futures firmed today finishing with sharp gains on the heels of another strong export announcement from China. Over 2,000,000 metric tons was announced this morning bringing weekly sale totals to over 225 million bushels to China. March corn finished the day 12-1/2 cents higher at 5.47. For the week, March corn finished 46.5 cents higher. New crop December gained 6-1/2 closing at 4.45-1/4. Weekly gains were substantial, yet keep in mind last Friday prices had a very difficult session finishing with sharp losses as March lost 23-1/2 cents. Nonetheless new contract highs were scored again this week as prices continued to march upward on good export sales activity and concern of tightening inventory. We also believe that farmers selling will be reluctant on price setbacks, especially at this time of year. The reality of a smaller than anticipated US corn crop as well as a smaller than expected China corn crop and the need to secure inventory whether it be for COVID-19 (food security) or future feed use has changed the view of the corn market from a just in time inventory management purchasing practice to one of just in case. Bottom line, there is little to no room for error in South America or the northern hemisphere in the year ahead. Crops need to be near ideal. We believe old crop can reach 6.00.

SOYBEAN HIGHLIGHTS: Soybean futures closed today with solid gains and well off the daily low price. March closed 16-3/4 cents firmer at 13.70 and finished the week at 58-1/4 cents higher. Today’s low was 13.35-1/2. New crop November closed 11-3/4 cents higher at 11.43, gaining 31 cents for the week. An announced sale of 132 thousand metric tons of new crop soybeans to China was viewed as supportive. With 95% of expected export sales on the books for the 2020/2021 marketing year, there is not much room left for additional exports. Rain delays in South America could mean even less beans available in the pipeline by late Feb and early March. Will this lead to more US export business? The reality is the US does not have a lot of beans to sell and if China or other countries need product US beans, for now, are still available. We do not believe the market has done a good job in recent weeks rationing inventory. It does make one wonder what happens if there is a weather issue in the US this season. Still, the southern hemisphere crop is improved over the last several weeks and this is likely what is keeping a cap on prices in the near term. Yet on the bigger picture perspective, supplies are critically tight, and we see no signal that a top is in place.

WHEAT HIGHLIGHTS: Mar Chi wheat up 13 cents closing at 6.63 and May Chi up 15 cents closing at 6.62 1/2. Mar KC wheat up 12 cents closing at 6.38, while KC May closed up 12 cents at 6.41. Wheat markets across the board rallied today, following the strong lead put in by the corn market. But there have been some supportive under tones for the wheat market as well this to keep prices supported. Argentina is debating whether rot raise export taxes from 8% to 20%, which would potentially change those exports numbers potentially to the US for some of that need. Russia confirmed their 50-Euro export tax on Monday as a done deal. Ukraine grain exports are sharply lower than last year. Although the US hasn’t seen it yet, all of these scenarios, combined with our USD being lower, “should” mean an increase in US exports in the next 90 days. Weather has been perceived as bearish this week, as the US Plains have received an ample amount of rain and snow. Bitter temps are expected to move in this weekend; however, snow coverage is expected to be ample to keep winter kill at bay. Next Monday’s crop condition report will be important to see what this week’s rains did for the crops, if anything.

CATTLE HIGHLIGHTS: The cattle market turned sharply lower during the trading session to finish with losses to end the week. February cattle dropped .950 to 115.050, and April cattle lost .850 to 121.850. For the week, April cattle gave up their gains today, losing .675 to end the week. Most disappointing was the weakened technical close, and reversal seen on multiple charts, that could set up additional profit taking on Monday. The turn in the market was profit taking being lead by a strong surge in grain markets this afternoon. In additional, the market was anticipating today USDA cattle Inventory report. The report was inline with expectations, and slightly above expectations. Total cattle inventory was steady with last year, on the 2020 calf crop was 99% of last year. Total beef cows were 99%of last year, showing the expected decline. The USDA did go back to previous reports and make adjustments lower in cattle numbers. With those revision, the report may have a more friendly tone for the market next week. Cash trade continued to develop on Friday, with most trade at $113, up $3.00 over last week. With the premium of the board in February, this added to selling pressure. The cash trend in the market will need to be maintained to support the market next week. At the $113, this is highest cash price paid since back to last June. Carcass values have been strong all week, and Choice carcasses gained an additional 1.91 to 233.90 at midday, and Select added 1.55 to 222.43. At midday, Choice carcasses were $11+ higher than last Friday’s close. The surge in grains weighed on the feeder market, as the March feeders lost 2.075 to 137.725, and April dropped 1.925 to 140.750. Like live cattle, feeder post strong technical reversals that will make us cautious next week.

LEAN HOG HIGHLIGHTS: Hog futures finished mixed on Friday, as February hogs lost .150 to 69.800, but April hogs were firmer gaining .275 to 76.650. Strength was seen in the front months with some visible bull spreading during Friday trade. For the week, April hogs gained .500, but finished at their highest levels November of 2019. February hogs stayed pressured by the cash market and the value over the lean hog index. The lean hogs index gained .34 today to 67.29, but is still trading 2.510 under February, but the gap is narrowing. Retail values have stayed firm this week above the $80 levels. At middays, retail carcasses gained 2.11 to 85.60 on moderate demand of 148.80 loads. Pork carcasses gained nearly $3.50 from the start of the week, and the demand tone has stayed firm. The strong export sales numbers this week represent the strong demand in the hog market. This strength of demand maintains the support under the spring and summer contracts this week. Slaughter still stays heavy near 490,000 head. Estimates for the week are 2.4 million head, steady with last week, but trend 60,000 under last year. The tighter supply picture is helping maintain those spring/summer hog prices. The technical picture stays supportive, and that should keep the hog market supported going into next week.

Top Farmer Midday Update 01-29-2021

CORN

  1. Mar up 12 @ 5.46 & Dec up 6 @ 4.44
  2. Truck strikes in Argentina continue to slow shipments to ports
  3. Central Argentina received rains overnight
  4. Export daily sales of 2.108M mt of corn to China & another 132K mt to China
  5. Corn sales are up 126% from this time last year
  6. US farmers expected to increase acreage for 2022 due to high prices

SOYBEANS

  1. Mar up 8 @ 13.61 & Nov up 12 @ 11.43
  2. Still expecting truckers to strike starting on Monday
  3. Brazil still in good shape however rains continue to slow harvest
  4. In tighter years July meal has traded $100 premium Dec
  5. Soybean sales are up 83% from this time last year
  6. US farmers expected to increase acreage for 2022 due to high prices
  7. US crushings expected to rise to 193.9 mb up from the 191 mb processed in Nov

WHEAT

  1. Mar up 13 @ 6.59, KC Mar up 9 @ 6.35, & Mar MNPLS up 10 @ 6.38
  2. Bitter cold air will push into plains this weekend and will last for all next week
  3. Russia also expected to experience bitter cold temps, snow should protect crops
  4. Corn rally continues to pull wheat alongside Paris & EU prices on the rise
  5. Wheat sales are up 6% from this time last year

CATTLE

  1. Feb LC down 0.15 @ 115.82 & Mar FC down 0.45 @ 139.35
  2. Strong beef price uptrend but futures already at a big premium
  3. Cash buyers are confident – traders are sticking to the sidelines today
  4. Today’s slaughter est. at 118K head
  5. Cash developed around 115 for LC & @ 135.34, up 0.51 for 1/27 for FC cash index
  6. O/I: -3344 contracts for Feb LC & O/I: -243 contracts for Jan FC

HOGS

  1. Feb Hogs down 0.22 @ 69.72 & Apr Pork Cutout up 1.00 @ 84.80
  2. June key reversal but sales strong & pork values up
  3. Strong pork exports continue to underlie the overall support from pork demand
  4. Hog slaughter estimated at 488K head
  5. Cash lean index @ 67.29 for 1/27
  6. O/I: -1581 positions for hogs & pork cutout futures +627 positions

Top Farmer Closing Commentary 01-28-2021

CORN HIGHLIGHTS: Corn futures closed with a whimper after coming out of the 8:30 am pause session with a bang. Mar closed at 5.34-1/2, up 0-1/2 but well off the high of 5.50-1/2. Outstanding export sales news came in the form of a strong weekly sales figure at 72.8 million bushels. Additionally, an announced sale of 1.7 million metric tons (67 million bushels) from China had prices quickly higher during the morning session. Yet, the market faltered and ended mixed. Dec futures lost 3-3/4 cents closing at 439-3/4 after reaching a daily high of 4.49-1/4. Mar futures did post the new contract high today, but Dec continues to be a laggard as its contract high was established on January 13 at 4.69-1/4. Moderate to strong gains in the soybean and wheat markets also gave way to selling late in the session with both finishing with strong losses. Beans ended over 20 cents lower and wheat over 10 cents lower. The selloff in these two markets were likely responsible for corn prices sagging late in the session.

SOYBEAN HIGHLIGHTS: Soybean futures, despite a good weekly export sale figure at 17 million bushels, turned a positive morning into an ugly close losing more than 20 cents. Nearby Mar closed 21-1/2 cents weaker at 13.53-1/4. Mar reached a daily high price of 13.91-1/4 which was 16-1/2 cents higher. For the second day in a row, the 10-day moving average acted as overhead resistance. There was some thought that today’s downturn in soybeans along with corn and wheat was not so much a negative reaction to positive news of strong exports but in fact expectations for lower exports during the early part of February as the Chinese holiday begins. In other words, new buying may be on the sidelines. Our response is, we will see. The need for inventories is paramount and soybeans are cheaper now than they were a couple of weeks ago. Total export sales are now 2.125 billion, within 5% of the USDA projection of 2.230 billion. The marketing year runs through the end of August. We are not convinced the market is doing a great job of rationing and inventory. We continue to ask ourselves – what if exports exceed expectations?

WHEAT HIGHLIGHTS: Mar Chi wheat down 11 cents closing at 6.47 and May Chi down 10-1/4 cents closing at 6.47-1/2. Mar KC wheat down 10-3/4 cents closing at 6.26 while KC May closed down 10 cents at 6.29-1/2. Wheat is lower today as bearish weather hit the market with nothing to boost it back up for the day. Little to no crop damaged occurred from the bitter cold in Montana in the past week, despite being snow-free & temps near damage threshold. Snow is expected to fall this week in the central and northwestern Plains prior to another bitter cold front coming, which should prevent any damage to the current crop. Also, global prices didn’t help the situation today either as Paris Milling futures were down for the first time in 3 days. Russian farmers push wheat to market prior to the March 1 export tax, also putting pressure on the wheat market as a whole. Much needed snow/rain is in the forecast for the U.S. crop which will be more than welcomed and might create limited downside pressure but the long-term forecast is still expected to be too dry and not ease up until potentially the summer. Export sales were friendly enough, at 380,500 mt which was higher than last week. Not an overly bullish number but certainly neutral to slightly friendly.

CATTLE HIGHLIGHTS: The cattle market was choppy and looking for direction overall on Thursday. Most contracts finished slightly lower, but the trading range from high to low was very narrow today. Feb cattle lost 0.450 to 116.00, but Apr cattle gained 0.075 to 122.700. Consolidation was the name of the game in the cattle market on Thursday. The news front was relatively quiet or at least figured in for the day. Cash trade stayed quiet with a few bids at $112 in Texas. Producers are asking $114-115, any additional trade this week will likely hold off until late tomorrow. The USDA Quarterly Cattle Inventory report will be released after the market closes tomorrow, and that may just keep the market in check until those numbers are known. Retail carcasses stay on their uptrend at midday as choice carcasses gained 0.98 to 230.94 and select was 2.39 higher on light to moderate demand. Weekly export numbers have stayed consistent over the past few weeks, and this morning’s report stayed in line with that trend. Export Net Sales were at 28,800 MT reported for 2021 for last week, and export shipments of 17,400 MT. In the feeder market, Jan Feeders finished trading today, closing at 135.700, but the remaining feeder contracts saw marginal losses. Mar feeders softened by 0.275 to 139.800, and Apr feeders dropped 0.400 to 142.675. Like the live cattle market, feeders were looking for direction and consolidated on Thursday. Technically, cattle markets are taking a pause after a good move higher over the past couple of weeks. The market may need some fresh news in order to push out higher in the near-term.

LEAN HOG HIGHLIGHTS: Hog futures finished mixed on Thursday as prices were choppy and two-sided during the session. Front-month Feb hogs lost 0.625 to 69.950 but Apr hogs gained 0.075 to 75.900. Summer month contracts also saw some weakness and profit-taking losing 0.400-0.575 during the day. Despite a strong week in export sales, the hog market failed to find any traction. Weekly export sales were a strong 52,900MT for last week, with Mexico and China as the top two buyers. Export shipments were at 39,600 mt with China the top destination at 12,500 MT. This provided early session strength, but for the second straight day, the livestock sector showed general weakness, and that kept the hog market quiet. Nearby fundamentals keep pressure on the Feb contract. Slaughter is estimated at 495,000 today, down 3,000 from last week, but up 4,000 from last year. The Lean Hog Index is trending higher, trying to close the gap on the front-month contract. The index gained 0.72 today to 66.95 but is still at a 3.00 discount to the Feb contract. Retail values were stronger at midday, as pork carcasses were 3.31 higher to 84.42 on moderate demand, but this failed to move the market this afternoon. The grain market saw a lot of fluctuation on Thursday with large trading ranges for both corn and soybeans. That lack of direction may have come into play in the lack of overall conviction in the hog market today.

Top Farmer Midday Update 01-28-2021

CORN

  1. Mar up 2 @ 5.36 Dec down 1 @ 4.41
  2. Central Argentina received significant rainfall last night
  3. Daily export sales of 1.7M mt of corn to delivery to China & 213K mt to unknown
  4. Argentina truck strike continues to slow supplies to the ports
  5. China import demand for corn & ethanol could tighten stocks more than expected
  6. Weekly export sales 1.850M up 29% from last week

SOYBEANS

  1. Mar down 16 @ 13.58 & Nov down 11 @ 11.38
  2. Weather continues to improve in Brazil – rains continue to slow harvest pace
  3. Brazilian truckers say they will go on strike as of Monday, Feb 1
  4. Weekly export sales of 466K mt – down 74% from last week
  5. A wave of profit-taking hit the soybean market mid-morning
  6. Weak export numbers may be weighing on prices today
  7. Aggressive price rationing will need to take place to keep ending stocks from complete depletion in US

WHEAT

  1. Mar down 6 @ 6.52KC Mar down 4 @ 6.32, & Mar MNPLS down 6 @ 6.35
  2. Sufficient snow/crop protection expected for US Plains prior to bitter cold next week
  3. Weekly export sales of 380.5K mt up 15% from last week
  4. Paris milling futures lower today pulling on US wheat prices – along with a decline in corn
  5. Russian export tax finalized in hopes of stabilizing record-high food prices

CATTLE

  1. Feb LC down 0.30 @ 116.15 March FC up 0.20 @ 140.27
  2. It will be harder to rationalize big premiums with production
  3. Net export sales 28,800 mt – increases primarily for Japan
  4. January feeder cattle last trading day today, Thursday 1/28
  5. Today’s slaughter est. at 119K head
  6. Cash developed around 113 for LC & @ 134.96, up 0.48 for 1/26 for FC cash index
  7. O/I: -1447 contracts for Feb LC & O/I: -439 contracts for Jan FC

HOGS

  1. Feb Hogs down 0.25 @ 70.32 & Feb Pork Cutout down 1.00 @ 82.45
  2. June hog key reversal – outside-day down bearish technical development
  3. Net export sales of 52,900 mt – increases primarily for Mexico & China 2nd
  4. Hog slaughter estimated at 494K head
  5. Cash lean index @ 66.23 up 0.35, for 1/26
  6. O/I: -2686 positions for hogs & pork cutout futures +6 positions

Top Farmer Closing Commentary 01-27-2021

CORN HIGHLIGHTS: Corn futures were off to a strong start this morning with new contract highs posted for the old crop when Mar breached the most recent high of 5.41-1/2 reaching 5.43-3/4. By the end of the day, however, prices gave back most of their gains with Mar gaining 1-3/4 cents closing at 5.34 and Dec losing 2 cents closing at 4.42-1/2. The inability to hold strong gains is somewhat concerning, yet in a highly volatile market environment, we are not going to lose sleep with prices still closing higher on old crop. Demand continues to underpin corn prices and it is sometime before copious supplies are available out of South America. In the meantime, we continue to see strong end-user buying, and while farmer selling has picked up, the floodgates have not opened. We are concerned that a lack of new positive news and poor ethanol margins could keep near term rally potential in check. We have also indicated that we believe the corn market will be pulled higher by increasing soybean prices. The soybean market looks somewhat tired. It could be that soybeans will run out of time to rally higher as the Southern Hemisphere crop becomes more readily available. Developments, whether it is exports or weather, will set the tone for price direction for the next month.

SOYBEAN HIGHLIGHTS: Soybean futures finished the day with small gains of 4-1/2 cents in Mar closing at 13.74-3/4 and Nov adding 0-3/4 cents to close at 11.49-1//4. Like the corn market, soybean futures finished well off their daily high. Mar reached 13.94-3/4, up 24-1/2 cents higher and new crop up 18-1/4 cents. Strong bull spreading was noted early. Continued talk of a trucker strike in Brazil, as well as reports that truckers in Argentina are blocking roads to ports, was viewed as supportive. On a more global scale, we continue to hear of end-users searching for supplies, in particular soybean crushers. What it boils down to is it doesn’t appear that the bean market is rationing supply, and this will only occur through higher prices. Therefore, the near-term argument is for continued strength. Yet, it may be a matter of time before more Southern Hemisphere beans are readily available. In general, however with crop conditions somewhat challenged and harvest likely later than normal, prices may hold or move higher.

WHEAT HIGHLIGHTS: Mar Chi wheat down 7 cents closing at 6.58-1/4 and May Chi down 6-1/2 cents closing at 6.57-3/4. Mar KC wheat down 4-1/4 cents closing at 6.36-3/4 while KC May closed down 4-3/4 cents at 6.39-1/2. Wheat was up nicely early this morning, prior to the pause from 7:45-8:30 a.m. CT as were corn and soybeans. Rumors of China coming back in and buying both corn & soybeans had the market excited but all that fuel quickly dissipated after the open at 8:30 this morning pulling wheat right along with it. The U.S. Plains are finally getting some benefit from this last snow system that pushed through and expected to get more rain/snow throughout the week. This might be enough for a day move, but unfortunately, this is not going to counter the months of drought much of the Plains have experienced. La Nina weather pattern is still expected to spread and push into a warm & dry summer for most of the U.S. this year. Next Monday’s Crop Condition report will be telling how much, if any, this weather helped the crop. Some Russian farmers are trying to push wheat prior to the March 1 export tax that will be in effect, which also pushed on prices today. Aside from our concerns and Russia’s weather concerns as well, U.S. ag attache forecasted the Australian wheat crop at 31 mmt which is 1 mmt more than USDA’s last forecast.

CATTLE HIGHLIGHTS: The cattle market finished lower on Wednesday as Feb cattle dropped 0.550 to 116.450, and Apr cattle lost 0.475 to 122.625. Weakness in equity markets and a risk-off mentality brought some long liquidation in the livestock sector on Wednesday. Prices traded back to support levels and held for today, tomorrow’s trade could be key for short-term price direction. Cash trade started to develop today with the Fed Cattle Exchange. Trade on the Exchange ranged from $112.75-113, which was $1-2 higher than last week. At $113, the cash market has a discount to the Feb futures contract, adding to the selling pressure. In the countryside, cash trade is still slow to develop, but started bids of $112 emerged this afternoon, those were countered with $115 asking prices. Additional cash trade will likely develop later in the week. Wholesale carcasses stayed supported at midday with choice carcasses gaining 0.73 to 229.79 and select gained 1.44 to 218.77 on moderated movement of 73 loads. Weekly export sales tomorrow could help provide some strength in the markets with favorable sales and the activity of China in the beef export market. The feeder cattle market saw a second day of decline and long liquidation. Overnight strength in the grain markets and the softer tone in the live cattle market weighed on feeders today. Jan feeders expire on Friday, and that may be bringing some pause in the feeder cattle market. Jan feeders lost 0.025 to 135.625, and Mar feeders dropped 1.400 to 140.075. Friday will bring the semi-annual USDA Cattle Inventory report, and the market will be looking at the beef cow numbers. Total beef cow inventory is expected to be down 1.3% from last year, and at its lowest numbers since 2017. This will likely see a tighter overall cattle supply into 2021 and beyond.

LEAN HOG HIGHLIGHTS: Hog futures finished mostly lower on some profit-taking, with the exception of the front-month Feb contract. Feb hogs gained 0.125 to 70.575, but Apr futures slipped 0.650 to 76.300. The Feb contract expires next Friday and is influenced by the Lean Hog Index. The Cash Index traded 0.35 higher today to 66.23 but is still at a 4.345 discount to the Feb. This will likely keep the Feb contract in check through next week. Deferred contracts saw some profit-taking influenced by the outside market and weakness in the livestock sector. Tomorrow’s trade action will be key going into the end of the week. The hog market has added some very good value recently and may be poised for further declines. Apr hogs are backtesting new support, which was the old resistance around the $75 area. This will be a key area to hold going into the end of the week, or the market may be open to further long liquidation. The pork carcass cutout value was higher at midday, gaining 2.70 to 83.63 on 177 loads. With pork carcasses around the $80 level, demand has been strong, represented in the Cold Storage report from earlier in the week. Weekly export sales look to stay supportive and could set the tone for Thursday. Last week saw a jump in sales and China active in the U.S. export market. With the Chinese Lunar New Year just around the corner, expectations for that type of activity to continue is high. Expected slaughter for today was at 492,000, down 6,000 from last week, and 3,000 from last year. A downward path in hog slaughter would be supportive of the market, especially with the given demand.

Top Farmer Midday Update 01-27-2021

CORN

  1. Mar down 1 @ 5.32 & Dec down 2 @ 4.41
  2. Ethanol production for last week average 933K barrels – down 9.33% from last yr
  3. Argentina weather over next 10 days – opportunities for rain in most of the nation
  4. Daily export sale of 680K mt of corn to China
  5. Sharp a.m. rally attributed to China demand/buying
  6. Truckers in Argentina are still blocking roads into the ports

SOYBEANS

  1. Mar up 3 @ 13.73 & Nov up 1 @ 11.50
  2. US soybean crushers buy up extra beans as supply scramble looms
  3. China soybean imports may hit new record 110M tonnes in 2021/22
  4. Crops in Brazil will remain favorable – northeast Brazil still too dry
  5. Daily export sale of 132K mt to China & 126.5K to unknown destination
  6. Truckers in Brazil are threatening to strike due to low wages

WHEAT

  1. Mar down 11 @ 6.54KC Mar down 8 @ 6.32 & Mar MNPLS down 8 @ 6.39
  2. US HRW wheat areas benefited from this week’s snowstorm but need more moisture
  3. La Nina not slowing down – suggesting a warmer & dryer US summer
  4. A failed trade war, China now importing record amounts of wheat from Australia.
  5. Russia confirmed a 50-euro tax on wheat exports starting March 1
  6. Crop conditions report concerning as good/excellent ratings fall for most of HRW areas

CATTLE

  1. Feb LC down 0.80 @ 116.20 & Mar FC down 0.95 @ 143.32
  2. LC – Big premiums and overbought technically but no sign of topping out yet
  3. Corn market continues to pressure both cattle markets for the day
  4. January feeder cattle last trading day, Thursday 1/28
  5. Today’s slaughter est. at 119K head
  6. Cash developed around 113 for LC & @ 134.96, up 0.48 for 1/25 for FC cash index
  7. O/I: -4224 contracts for Feb LC & O/I: -248 contracts for Jan FC

HOGS

  1. Feb Hogs down 0.02 @ 70.45 Feb Pork Cutout up 0.15 @ 82.85
  2. Steep uptrend but overbought & holding large premium to cash
  3. Underlying tone of the market still friendly – corn prices pressure front months
  4. Hog slaughter estimated at 492K head
  5. Cash lean index @ 66.23 up 0.35, for 1/25
  6. O/I: -586 positions for hogs & pork cutout futures -4 positions

Top Farmer Closing Commentary 01-26-2021

CORN HIGHLIGHTS: Corn futures closed firmer with nearby Mar gaining 20-3/4 cents closing at 5.32-1/4 and Dec up 9-3/4 finishing at 4.44-1/2. A couple of announced sales of corn this morning help propel prices higher. A combination of a large sale to China and another smaller to unknown destinations for a total near 58 million was a supportive catalyst to today’s higher futures. Perhaps just as important, was yesterday’s bullish hook reversal on charts and follow-through buying which may have attracted speculative interest. Yesterday’s reversal in and of itself was supportive but the key is follow-through. Had prices stumbled or moved lower this morning, yesterday’s technical signal would not mean much. Once prices began to move, the market wasted little time finding buyers and likely short covering. Also providing underlying support was a firmer wheat market today. Uncertainty with feed supplies from Russia is providing underlying support for corn. Recently, it was noted that some feed users in China are mixing wheat in feed rations substituting for corn and soy meal. With China auctioning reserves of wheat recently, this would add validity to this story.

SOYBEAN HIGHLIGHTS: Soybean futures finished with strong gains of 18 to 26-3/4 cents with Mar leading today’s rally closing at 13.70-1/4. New crop Nov finished 18-1/4 cents firmer at 11.48-1/2. Short covering and traders who are viewing the sell-off from late last week as a buy opportunity jumped into the market today. Private forecasters are suggesting a small increase to the Southern Hemisphere crops due to better weather but not a significant turnaround in the overall supply. A return to drier conditions in some regions is forecasted for next week. We have concerned ourselves with recent African swine fever news from China, yet the market seems dismissive instead focusing on very tight carryout figures. We do wonder if soybeans may be at a pivot point near 14 dollars. The first breach over 14.00 suggested that prices could move to 15.00. Since then, additional rain in South America and now some concern over disease in the China hog herd could perceptively reduce buying enthusiasm at higher prices. Time will tell. Nervous longs might begin liquidation closing to 14.00.

WHEAT HIGHLIGHTS: Mar Chi wheat up 16-3/4 cents closing at 6.65-1/4 and May Chi up 15-1/4 cents closing at 6.64-1/4. Mar KC wheat up 13-3/4 cents closing at 6.41 while KC May closed up 13-1/4 cents at 6.44-1/4. Markets were up all around in the wheat sector today. Not only did wheat rally alongside fellow corn & soybean markets, but globally, wheat prices were up in Paris milling futures and Black Sea futures, which further added support to U.S. wheat today. It was reported today that China bought 600,000 mt of wheat from Australia in December. To be fair, this comes after months of China refusing to purchase from Australia but still a very impressive sale regardless of circumstances. Yesterday the USDA confirmed crop ratings dropping for much of the west wheat country – Kansas, Nebraska, South Dakota, and Colorado all dropped in good to excellent rating. Long-term demand looks strong even for wheat, although we have yet to see purchases for U.S. wheat to be anything like that for corn and soybeans.

CATTLE HIGHLIGHTS: Cattle futures finished mixed between groups on Tuesday, as live cattle held their recent strength, and feeders traded softer. First live cattle had modest gains, with Feb finishing 0.475 higher to 117.00, and Apr gaining 0.150 to 123.100. The technical strength in the live cattle market stays active as prices have built off the last few days of strong trade. This technical trade and money flow are moving prices higher, but to maintain the rally, the fundamental factors, mainly cash, need to support. The retail market has been extremely strong, and that trend continued today. At midday. choice carcasses gained 2.40 to 229.13 and select traded 0.65 higher to 216.86. In the past couple of weeks, choice carcasses have rallied near $30 since crossing back through the $200 barrier. Seasonally, retail value surges in this window but softens into later winter, but at this point, the trend continues. This is bringing cash optimism, which is still undeveloped this week. Asking prices are $114-115 with the strong futures market building feedlot resolves. Fed Cattle Exchange will trade tomorrow, and that will give a start to the cash trade, with the majority holding off to the end of the week. The most recent Cattle on Feed report showed more placements of heavier weight feeders, and that could limit some upside at the end of the first and early second quarter. Deferred contracts have been on a steady climb, showing good strength as prices push to new highs on a daily basis. This is supported by the projections for tighter cattle supplies, hopes of improved demand, and value being added by the pressure from higher feed costs. Feeder cattle futures saw some profit-taking on Tuesday. The heavier placement totals on the Cattle on Feed report make the feeder market more cautious about supplies, and the reawakening of the grain markets bring selling pressure. Regardless, charts still look supportive, and in today’s action was more of a consolidation trade action.

LEAN HOG HIGHLIGHTS: Hog futures finished mostly higher, with the exception of the Feb contract. Feb hogs lost 0.175 to 70.450, beyond that, hog futures saw modest gains. Apr hogs gained 0.325 to 76.950, and Jun hogs finished 0.425 higher to 87.925. With expiration moving closer, the premium of the Feb contract to the index limits upside potential. As the lean hog index traded 0.33 higher to 65.88, the premium from Feb is still at 4.570, limiting upside in the front-month contract. A strong technical picture and optimism regarding longer-term demand have supported hog futures. Summer hogs look to be testing the $90 level. The carcass value is trading back above the $80 level but traded softer at midday on Tuesday. Pork carcasses lost 1.20 to 80.93. The cold storage number from yesterday afternoon’s USDA Cold Storage report showed that frozen pork supplies were down 3% from the previous month and down 30% from last year. Stocks of pork bellies were up 32% from last month but down 54% from last year. Very much a reflection of the pork demand given the heavy production. This tight belly supply picture will keep support into the retail values, as the tighter supply will bring price competition. In addition, China will be offering an additional 30,000 Mt of frozen pork in storage on auction, and despite the herd improving from ASF levels, there is still a strong demand for pork products in China, and the U.S. has been a main beneficiary. This has helped build the strong move higher in the deferred contracts. The strong technical picture will keep buyers active, and with grain prices trying to regain their footing, hog prices look to be supported to encourage production in the face of demand.

Top Farmer Midday Update 01-26-2021

CORN

  1. Mar up 16 @ 5.28 & Dec up 9 @ 4.44
  2. Argentina, conditions will stay favorable for crops – some of the south will be too dry
  3. CME raises margin requirements for futures to $1,400
  4. USDA sees Argentina corn crop at 47.0 mln tonnes – 500K tons lower than USDA report
  5. Export demand & outlook for tighter ending stocks supports futures
  6. Daily export sales of 1.360M mt of corn sold to China & 102K mt to unknown

SOYBEANS

  1. Mar up 29 @ Nov up 19 @ 11.49
  2. Brazil, conditions will be good for most key production areas
  3. CME raises margin requirements for futures to $3,000
  4. Funds are buying again after liquidation last week
  5. Rains are slowing Brazilian harvest – only at 1% versus 4% this time last year
  6. EU continues Covid lockdown – could last until summer
  7. Demand expected to stay strong – China rumored to be buying this week – no confirmation yet

WHEAT

  1. Mar up 17 @ 6.65, KC Mar up 16 @ 6.43, & Mar MNPLS up 14 @ 6.48
  2. Japan seeks 60,715 tonnes of wheat from Australia
  3. US Plains wheat ratings decline in Kansas, Colorado, Nebraska & S. Dakota
  4. Shipments of Australian wheat to China surge after months of tensions & no trade
  5. Argentine wheat exports projected at 11.3 mt – 700K tons less than USDA report
  6. Russian government approved 50 Euro wheat export tax starting March 1

CATTLE

  1. Feb LC up 0.40 @ 116.92 Mar FC down 1.50 @ 142.35
  2. Cold Storage report: red meat supplies in freezers were up 1% from last month & lbs of beef in freezers were up 4% from last month
  3. Rally in corn and concerns over production costs pressure FC markets
  4. January feeder cattle last trading day, Thursday 1/28
  5. Today’s slaughter est. at 116K head
  6. Cash trade delayed due storms LC & @ 134.48, up 0.49 for 1/22 for FC cash index
  7. O/I: -2059 contracts for Feb LC & O/I: -102 contracts for Jan FC

HOGS

  1. Feb Hogs down 0.30 @ 70.32 & Feb Pork Cutout up 0.32 @ 83.20
  2. Cold storage report: Frozen pork supplies down 3% from last month & stocks of pork bellies were up 32% from last month
  3. Limited upside if China demand continues to slip
  4. Hog slaughter estimated at 476K head
  5. Cash lean index @ 65.88 up 0.33 @ 1/22
  6. O/I: -1865 positions for hogs & pork cutout futures -8 positions

Top Farmer Closing Commentary 01-25-2021

CORN HIGHLIGHTS: Corn futures finished firmer with gains of 4-1/2 cents in Dec to 11 cents in Mar closing at 5.11-1/2. Dec closed at 4.34-3/4. Last week’s technical sell-off may have scared the bulls. We expect farmer selling will be less aggressive this week. Export inspections at 54.8 million bushels were termed supportive. This brings year to date inspections to 738 million, up 84% compared to this same time last year. Inspections are at 28.9% of total sales expectations for 2020/2021. New news of consequence is lacking, and this is keeping prices in limbo for the near-term. On the one hand, exports have been very solid and with expected reductions to the Argentine crop and expectations that farmer selling in Argentina will remain light due to inflationary concerns, U.S. export activity should remain active in the months ahead. The next big fundamental story will be progress with the second crop corn for Brazil. Traditionally this is considered their export crop. Part of last week’s sell-off may have been on a concern that African swine fever is noted again in China.

SOYBEAN HIGHLIGHTS: Soybean futures finished with sharp gains of 18 to near 32 cents. Mar led today’s gains closing at 13.43-1/2 up 31-3/4 cents and new crop Nov up 18-1/4 to 11.30-1/4. Last week’s price slide occurred mainly on Friday and was technical in nature. Today’s positive news was in the form of export inspections at 72.7 million bushels along with some forecasters suggesting drier conditions after a current rain event in South America. Year to date export inspections have reached 74.6% of expected export sales of 2.230 billion. Today’s figure brings the year to date total to 1.664 billion inspected. Yet, overall news as of late was generally neutral to negative with improved crop conditions in South America and news of African swine fever in China. Yet, exports continue to run at a pace that seems to indicate the USDA may have to raise future estimates. There is not much room for carry out to decline any further. Therefore, demand will need to be reduced elsewhere or bean futures prices need to move higher in order to ration inventory.

WHEAT HIGHLIGHTS: Mar Chi wheat up 14 cents closing at 6.48-1/2 and May Chi up 13 cents closing at 6.49. Mar KC wheat up 14 cents closing at 6.27-1/4 while KC May closed up 14 cents at 6.31. Wheat followed in corn & soybean’s path of giving some recovery to Friday’s extreme selloff in all grain markets. Also tugging on wheat prices today was Paris milling futures, which were up as well giving additional support to prices. This week’s U.S. weather map calls for snow, ice, and rain throughout much of wheat country, inclusive of Nebraska & Kansas. This will benefit spring wheat more than hard red winter wheat, but all moisture at this point will be appreciated. Although we have yet to receive bullish export numbers, last week’s export grain inspection numbers were promising at a little over 523,000, almost double of what we have typically been seeing week to week. Russia officially signed off on their export tax that will go into effect on March 15. It is thought that if the USD remains lower, exports could finally pick up for us here in the United States, if not before then.

CATTLE HIGHLIGHTS: Cattle futures finished mostly higher on Monday, with only the Feb contract showing weakness. Feb cattle were 0.200 lower to 116.525, but Apr cattle gained 0.425 to 122.950, and Jun cattle finished 0.025 higher to 118.825. The cattle market processed Friday’s cattle on feed numbers, which was neutral to slightly negative. The higher placement being mostly heavyweight cattle, up 17% from last December, kept pressure on the front of the market. Cattle supplies stay heavy, and that has been pressuring the nearby cash market. Estimated slaughter today was at 118,000, 6,000 over last week, but 4,000 under last year. Weights have stayed high, and that keeps weekly production heavy. The cash market was undeveloped on Monday, and will likely wait until later in the week. Anticipation is for higher cash trade, supported by a strong move in retail values recently, but the large slaughter supplies decrease the competition for the packers and their bids. Carcasses traded higher again at midday to start the week, with choice carcasses gaining 2.96 to 225.78 and select gaining 2.03 to 215.37. Apr cattle are trading to their highest levels since last February, and fill the price gap on the charts from that window last year. Good technical strength in the cattle market is bringing money flow across the livestock complex. Despite a push higher in grains, feeder cattle were mostly higher, with the exception of the front month. That was reflective of the heavier feeder placement numbers from the Cattle on Feed report. Jan feeders last trading day is 1/28/2021, and are holding a premium to the cash index. Jan feeders were 0.700 lower to 136.550, and Mar feeders dropped 0.300 to 143.800. The cash index is trading at 134.48 on Monday. Deferred contracts were higher, led by strong gains in the 3rd and 4th quarter feeder market.

LEAN HOG HIGHLIGHTS: Hog futures finished higher to start the week as money flow continues to move into the market. Feb hogs gained 0.700 to 70.625, and Apr hogs finished 0.475 higher to 76.625. While Feb hogs are staying choppy and overall in a sideways pattern, Apr hogs broke through the resistance barrier established in October, opening the upside on the chart to possibly challenge contract highs. Heavy slaughter supplies will limit the nearby with slaughter and pork production staying heavy. This limits the cash market. With less than a month left in the contract life, the premium in the Feb contract versus the index is at a 5.00 premium. The cash index did trade higher on Monday, gaining 0.15 to 65.55. Strong pork carcass values and the anticipation of prolonged Chinese demand into 2021 have helped support deferred futures. After a strong close on Friday, midday carcass values did soften on Monday. Carcasses dropped 0.37 to 82.46 on a moderate load count of 179 loads. Weekly export sales were strong last week, keeping the outlook for demand strong going into 2021. China had a recurrence of ASF in a key pork production province last week, though isolated is under the close eye of the market for possible impacts on U.S. export demand. The market is strong technically, and since last week, money flow has stepped into the livestock market looking at them as a value. The summer contract looks to be targeting the $90 level.

Top Farmer Midday Update 01-25-2021

CORN

  1. Mar up 10 @ 5.10 & Dec up 6 @ 4.35
  2. Weekly export inspections 1.391M mt versus last week’s 876K
  3. Argentina rainfall during weekend was minimal
  4. US corn demand unchanged – still cheapest globally through spring
  5. Ethanol production rose last week but still running 10% behind this time last year

SOYBEANS

  1. Mar up 33 @ 13.45 & Nov up 18 @ 11.30
  2. Weekly export inspections 1.978M mt versus last week’s 2.058M mt
  3. Brazil weather outlook for next 10 days still favorable
  4. Brazil farmers expected to collect record crop despite drought-driven planting delays
  5. Last Friday’s selloff still relatively unexplained – maybe fund liquidation
  6. Unwavering demand still looks to push US ending stocks to 100 mb or less

WHEAT

  1. Mar up 6 @ 6.41, KC Mar up 9 @ 6.22, & Mar MNPLS up 8 @ 6.30
  2. Weekly export inspections 523K mt versus last week’s 276K mt
  3. US hard red winter wheat areas began receiving rain/snow overnight
  4. Sovecon raises Russian 2021 wheat crop to 77.7 mt – still below record crop of 2020
  5. Russia finally signs the confirmation that an export tax will begin March 15
  6. Very strong export inspections may set stage for higher exports in coming weeks

CATTLE

  1. Feb LC down 0.27 @ 116.45 & Mar FC down 0.24 @ 143.87
  2. Bearish Cattle on Feed report from Friday, impacting prices
  3. Beef prices up 4.6% last week while beef production up 3.6^
  4. January feeder cattle last trading day, Thursday 1/28
  5. Today’s slaughter est. at 118K head
  6. Cash trade delayed due storms LC & @133.99 up 0.80 for 1/21 for FC cash index
  7. O/I: 3286 contracts for Feb LC & O/I: +661 contracts for Jan FC

HOGS

  1. Feb Hogs up 0.17 @ 70.10 & Feb Pork Cutout up 0.07 @ 81.90
  2. Despite the cattle market, seem to be carrying over gains from Friday’s close
  3. Pork cutout jumps 3.2% for week – pork production up 3.6%
  4. Hog slaughter estimated at 489K head
  5. Cash lean index @ 65.55 up 0.15 @ 1/21
  6. O/I: -1334 positions for hogs & pork cutout futures +47 positions

Top Farmer Closing Commentary 1-22-21

CORN HIGHLIGHTS: Corn futures plunged to limit lower (down 25 cents) near the noon hour and eventually finished 23-3/4 cents lower at 5.00-1/2 on March futures. December lost 18-1/2 cents closing at 4.30-1/4. Heavy liquidation was noted today presumably by managed money as well as small speculator. What may have led to today’s technical sell off is a concern that a new strain of African swine fever in China may be affecting the hog herd. It was said the fourth largest hog producer in China has over 1000 infected sows. Additionally, rain in South America was viewed as beneficial for both corn and soybeans. Today’s ethanol report indicated 95.474 mb were last week and this compares to 95.070 the week prior. Barrels of ethanol on hand were reported at 23.628 million, about the same as the week prior. Export sales were released today with 56.6 million bushels recorded for last week bringing the year-to-date total to 1.843 billion. Last year at this time 799.5 mb were sold. The expected yearly total is 2.550 bb which means sales are at 72.3% of yearly expectations.

SOYBEAN HIGHLIGHTS: Soybean futures finished with sharp losses as traders were either heading for the sidelines or were stopped out of longs or into short positions. This week private forecasters indicated a 1 to 2 million metric ton increase for the Brazilian bean crop. Additionally, demand concerns became paramount at the end of this week as a new strain of African swine fever has been reported in China. Concern that the covid-19 virus is on the rise have the markets concerned as well as talk of a world-world lock down gained traction. On a positive note, export sales were again excellent at 66.8 million bushels, bringing the yearly total to 2,108 bb, or 94.5% of the yearly total expected sales of 2.230 bb. It was a tough week technically for the market as front month March futures finished down $1.05. Many would argue the market was overdue for a correction and that from a technical perspective the downturn this week is nothing more than what has been anticipate it. The question now is whether the market has peaked for the year? At this time, we would say probably not. The weather in South America may be improving yet there is still likely to be a significant shortfall of exportable soybeans from the combined countries of Brazil, Argentina, and Paraguay.

WHEAT HIGHLIGHTS: Mar Chi wheat down 26 1/4 cents closing at 6.36 and May Chi down 23 3/4 cents closing at 6.24.  March KC wheat down 22 cents closing at 6.17 while KC May closed down 21 3/4 cents at 6.16 3/4. Nasty close for the wheat market, pressured by fellow corn & soybean liquidation. The week in review certainly doesn’t explain away today’s close. Paris milling futures were down today as well but were mildly supportive throughout the week. US wheat has become more competitive on a global scale this week, as can be seen by the daily sales of 138,000 sell of hard red winter wheat to Nigeria earlier in the week. Exports were strong this morning at 329,600 mt – one of the stronger export numbers in recent weeks. Russia’s crop expected to increase slightly to 77.7 mmt but still no where near last year’s record crop of 85.9 mmt. Drought still expanding and affecting 95% of the plains and not expected to ease well into April.

CATTLE HIGHLIGHTS: Strong move higher in the Cattle market as front-month contract saw triple digit gains. February cattle were 2.625 higher to 116.725, and April Cattle gained 2.575 to 122.525. This ended a strong week in the cattle market with February trading 3.950 higher and April was 4.325 for the week. Strength in the livestock market was fueled by technical buying and a strong sell-off in grain markets. Cattle prices pushed through nearby highs, and saw follow through selling after yesterday’s firm trade. February closed at it’s highest levels since last March. Beyond the money flow, the market may have been buying going into this afternoon’s cattle on feed report. The report came in slightly heavy with total cattle on feed at 100% of last year, placements at 101 percent of last year, and maketings at 101% of last year. The placement number was the heaviest, with expectations at 97%. This will likely pressure the trade to start the week, given the strength today. Retail carcasses had a strong week, and that continued at midday. Choice carcasses were 1.85 higher to 223.05, and Select gained 3.24 to 213.52. Demand was moderate at 85 loads. With the higher trade this week, Choice carcasses gain over $12 from last Friday’s Choice carcass close. This strength should improve packer margin and optimism for higher cash trade next week. Cash trade was quiet today with most business done earlier in the week. A cash range of $109-111 cover the majority of the trade for the week. Feeder cattle were the true strength in the market with strong gains on Friday. March feeders traded the $5000 limit higher to 144.150, and April feeders gained 4.250 to $146.125. The strength in the live market combined with the strong drop in grain prices fueled the feeder cattle market higher on Friday. Monday could see some selling pressure given the heavier placement numbers seen last month.

LEAN HOG HIGHLIGHTS: Hog futures finished with strong gains on Friday, as the February hogs were 1.825 higher to 69.925, and April hogs gained 2.250 to 76.150. A strong demand tone from weekly export sales, and a strong break in grain prices provided the buying support on Friday. Weekly export sales were at 42,500 MT for last week, and shipments at 40,800 MT. This was a strong improvement over last week, and China was back in the U.S export market buying 9,700 MT. Beyond the demand, news reports of an isolated breakout of AFS in China, may have helped the buying enthusiasm. This will be a headline that will need to be closely watch for a potential impact. Fundamentally, cash market stay weak, burden buy heavy supplies. The Lean Hog Index traded .27 lower to 65.41, and now has a 4.520 discount to the February contract. That could limit upside movement going forward.  Beyond February, hog prices saw strong technical moves, that broke out through resistance levels, and could lead to additional buying strength next week. Retail carcasses were up 3.64 to 83.90 at midday. Load count was moderate at 229 loads. Hog carcasses have trended higher most of the week, and are trading $5 higher on the week from Tuesday’s close. Next week could bring a lot of volatility, being lead by the grain markets, but the improved technical picture will likely stay supportive hogs.

Top Farmer Midday Update 1-22-21

CORN

  1. March up 7 @ 5.16 & Dec down 8 @ 4.40
  2. Weekly export sales of 1.437M mt – unchanged from last week
  3. Argentine farmers have ramped up selling of corn ahead of possible export tax increase
  4. Weather in Argentina has improved – crop rated 28% good/excellent versus 19% last wk
  5. Demand stays strong yesterday’s daily export sale likely went to China
  6. Funds have liquidated some of their longs – still expected to be long 350K contracts
  7. Ethanol production for the week average 945K barrels per day – down 9.91% from last yr

SOYBEANS

  1. March down 20 @ 13.50 & Nov down 24 @ 11.44
  2. Daily export sales announced 136K mt for delivery to China
  3. Weekly export sales of 1.817M mt – up 50% from last week
  4. Soybean meal headed lower and pulling on soybean futures
  5. Rains have improved Brazilian crop to 21% good/excellent versus 10% last week
  6. US soybean carryout is likely headed to 100 mb or less
  7. Funds have liquidated some of their longs – still expected to be long 267K contracts

WHEAT

  1. March down 15 @ 6.45, KC Mar down 11 @ 6.24, & Mar MNPLS down 14 @ 6.30
  2. Weekly export sales of 329.6K mt – up 49% from last week
  3. Paris milling futures are down for the 3rd day in a row, pulling on US prices
  4. Corn & soybeans under pressure – bleeding into wheat market
  5. US prices more competitive after this week’s drop
  6. Russian ag agency increased 2021’s crop est. to 77.7 mmt from 76.8mmt in Dec
  7. Expanding and widespread drought still affecting 95% of the US plains

CATTLE

  1. Feb LC up 1.77  @ 115.87 & Jan FC up 1.52 @ 137.40
  2. Weekly export sales of 24,500 MT – increases were primarily for Japan
  3. Cattle on Feed Report due today at 2:00 p.m. – expected to be friendly
  4. Trade leery of higher grain prices affecting heavy weight cattle 
  5. Today’s slaughter est. at 118K head
  6. Cash trade around 110 for LC & @ 133.19, up .38 for 1/20 for FC cash index
  7. O/I: -2235 contracts for Feb LC & O/I: -310 contracts for Jan FC

HOGS

  1. February Hogs up 1.12 @ 69.22 & Feb Pork Cutouts up 1.47 @ 80.35
  2. Weekly export sales of 45,200 MT – increases primarily for Mexico
  3. Bullish technical moves; pork values/demand firm
  4. News cases of African swine fever in China hog for first time in 3 months
  5. Hog slaughter estimated at 489K, Saturday runs are projected at 324K head
  6. Cash lean index @ 65.40 down .27 for 1/20
  7. O/I: --1527 positions for hogs & pork cutout futures +104 positions

Top Farmer Closing Commentary 1-21-21

CORN HIGHLIGHTS: Corn futures Closed quietly but with bull spreading noted. March futures closed at 5.24-1/4 up2-1/4 and December futures up 1 at 4.72-3/4. New news was lacking today, and this allowed prices to drift lower after stronger overnight gains. There was some talk that recent selling in the futures market were Chinese speculators exiting. The bigger picture would suggest that tightening world inventories and weather will keep markets volatile. The market will also have to decide what impact the new administration will have as well. A private weather firm is suggesting the longer-term weather maps continue to argue for a strengthening La Nina pattern which means volatile weather with a bias for dryer in the US. A private firm issued their planting acres expectation for this year at 94 million which would compare to 90 million last year. At this point, given the drier weather across much of the Midwest it is only natural to expect more planted acres as prevent due to wet does not look likely. We do wonder if producers will be quick tear up wheat acres if it does not look good when it breaks dormancy. That could lead to more corn or beans acres. Time will tell.

SOYBEAN HIGHLIGHTS: Soybean futures ended quietly with March gaining 0-3/4 closing at 13.70-1/4 and November down 3-1/4 ending the session at 11.68-1/4. March futures did end a three-day losing streak but if you are bullish you are probably disappointed as today’s close was near $0.17 from today’s high. Private firms increased Brazilian crop expectation by 1 to 2 million metric tons. This reflects positive rain events over the last several of weeks. Yet, from a big picture perspective this really does not change much. Prices were off to a strong start from announced export sales of 11 million bushels, sales to China and Mexico. As we look ahead, we expect volatility to remain high but from a historical perspective the stocks to usage figures both domestically and worldwide suggest the continued uptrend for prices. What has recently been lost is the upward momentum which means prices are likely to be choppy in the immediate future as the market digests more news. Soybean oil found support today on continued strong demand and traders buying oil and selling meal.

WHEAT HIGHLIGHTS: Mar Chi wheat down 7 cents, closing at 6.60 3/4 and May Chi down 5 3/4 cents, closing at 6.62 1/4. Despite corn and soybeans trying to stay on the green side of the market, wheat for the most part stayed in the red, but still well above $6.00 which is still very unseasonably high for all wheat markets. USDA announced 138,000 mt of HRW wheat were sold to Nigeria on the daily export sales list.  Rare for wheat to be mentioned in the daily export announcements. Today’s US drought monitor showed little change from last week with extreme drought still present in the western edges of the HRW wheat region. Drought is expected to stay and possibly spread through April. Paris and EU prices were down for a close today, as Russian prices stay record high on tight supplies and high food prices. US dollar down today but still within recent trade channel, currently trading at 90.10 with a low of 90.04 today.

CATTLE HIGHLIGHTS: Cattle futures finished higher, being lead by strength in the front month contracts. February cattle gained .750 to 114.100, and April cattle led the market higher gaining 1.075 to 119.950. The April contract traded through the $120 level this afternoon and closed at its highest price point since last spring. Despite the cash market being disappointing, with most trade accomplished this week at $110, steady with last week, the strength in the cattle market is coming from technical buying and strong retail carcass values. Open interest has been growing in the cattle market, and compared to previous years looks to be at a value. With the Ag commodity sector showing strength overall, the livestock markets have been left behind with concern due to COVID restrictions and demand. The strong retail carcass value maintained its strength at midday again today. Choice carcasses gained 2.48 to 221.39, and Select carcasses were 3.01 higher to 210.29. The strong retail values have improved packer margins, and should to lead to improved cash markets in the weeks ahead. The live cattle market is pricing that optimism in. Friday bring the next round of Cattle on Feed numbers and expectation are for total cattle on feed to be at 99.5% of last year, as cattle number look to tighten into 2021. Placements should stay soft, expectations of 97.1% of last year, and marketing strong at 100.6% of last year. Overall, the view of the market is for cattle numbers to tighten. Placements have been restricted with rising corn prices, but a reflection of tighter cattle numbers. The feeder market stayed strong on Thursday with modest gains across the market. March feeders gained 1.625 to 139.150, and April feeders finished 1.250 higher to 141.875. A softening in corn prices and the strength in longer-term Live cattle contract support the feeder market. January feeders expire on January 28, and are trading at a premium to the Feeder cattle index, which limits gains.

LEAN HOG HIGHLIGHTS: Hog futures finished mostly higher, following through on yesterday’s strength. The only weakness on Thursday was the February contract, losing .325 to 68.100. April hogs lead the market higher, gaining .825 to 73.900, and June hogs gained .775 to 85.275. The weak cash market and heavy slaughter keeps the lid on the February contract. Slaughter is estimated at 498,000 head again today, and the large total keeps the cash market weak. The lean hog index traded softer today, dropping .25 to 65.67. With February expiration moving closer, the Feb contract is trading at a 2.43 premium to the index, limiting gains. Deferred contract saw some buying support on technical strength from yesterday’s close with money flow moving into the livestock markets. In addition, a news report stated that China on Thursday reported an outbreak of African swine fever in the southern province of Guangdong. This was the country’s first reported cases of the deadly disease in almost three months. Though it may be minor in terms of market impact, but may need to be watched in the future. Retail values were strong at midday, adding buyer support. Pork carcasses gained 4.96 to 83.98 at midday. Strong buying was seen in the pork belly and pork shoulder cuts. This may be a pre-cursor of export demand, with the Chinese Lunar Holiday approaching. Weekly export sales will be released tomorrow morning, and that could help give the market direction going into the weekend.

Top Farmer Midday Update 1-21-21

CORN

  1. March up 2 @ 5.24 & Dec up 1 @ 4.49
  2. Daily export sales announced 336.5K mt of corn – delivery unknown
  3. US corn continues to hold a sharp price advantage in world markets thru spring
  4. Weather in US is mostly dry with seasonal to warm temps
  5. Argentina’s weather turns dry again for the next 7-10 days
  6. Projected funds liquidated 70,000 positions – still net long around 350K
  7. Argentine truckers now on strike as well due to low wages

SOYBEANS

  1. March up 4 @ 13.73 & Nov down 1 @ 11.71
  2. Daily export sales announced 136K mt to China & 163.2K mt to Mexico
  3. Soybean oil had key reversal – giving support to soy complex early a.m.
  4. US soybean sales already nearly 93% of the USDA projection
  5. Chinese crush margins are stronger – implying more import need
  6. Argentine farmers have picked up sales ahead of possible export taxes
  7. Brazil’s soybean production projected record large 135.6 mmt vs USDA’s 133 mmt

WHEAT

  1. March down 7 @ 6.60, KC Mar down 2 @ 6.34, & Mar MNPLS down 2 @ 6.43
  2. Daily export sales announced 138K mt of HRW to Nigeria
  3. Paris milling futures back up slightly for the morning
  4. Rising Black Sea prices should keep support under US wheat as well
  5. US continues to become more competitive in global markets
  6. US Plains continues to be too dry as effects of La Nina spread as predicted

CATTLE

  1. Feb LC up .80 @ 114.15 & Jan FC up .35 @ 135.65
  2. Cattle on Feed report due tomorrow 2:00 p.m CT – trade expects friendly report
  3. Renewed daily strength in corn threatens FC market
  4. Today’s slaughter est. at 120K head
  5. Asking prices around 113 for LC & @ 132.81 down .09 for 1/19 for FC cash index
  6. O/I: -3700 contracts for Feb LC & O/I: --227 contracts for Jan FC

HOGS

  1. February Hogs down .25 @ 68.17 & Feb Pork Cutouts up .10 @ 78.87
  2. Wild moved in pork futures driven by extreme swings in Ham & Belly prices
  3. China reports first African swine fever outbreak in nearly 3 months
  4. Hog slaughter estimated at 497K, Saturday runs are projected at 321K head
  5. Cash lean index @ 65.67 down .25 for 1/19
  6. O/I: -2107 positions for hogs & pork cutout futures +10 positions

Top Farmer Midday Update 1-20-21

CORN

  1. March down 5 @ 5.20 & Dec down 8 @ 4.46
  2. Argentina dry yesterday & limited rainfall expected for the rest of the week
  3. Corn exports running 82% ahead a year ago
  4. Brazil corn exports expected to reach 2.398 mt in Jan versus 2.121 mt in previous forecast
  5. Funds taking profit, who are record long corn, adding pressure to prices
  6. Ukraine grain exporters are fighting proposed limit on corn exports

SOYBEANS

  1. March down 18 @ 13.67 & Nov down 18 @ 11.71
  2. Crop conditions in Brazil still rated favorable for most of the country.
  3. Palm oil prices down on shrinking Jan exports
  4. Soybean exports running 78% ahead a year ago
  5. CME raises margin requirements on futures from 2,750 to 2,950
  6. China’s soybean imports from the US in 2020 rose by 52.8% from last year

WHEAT

  1. March down 3 @ 6.68, KC Mar down 5 @ 6.38, MNPLS March down 6 @ 6.46
  2. Bitter cold in S. Russia induced no crop damage due to snow coverage
  3. Wheat exports running 3% behind a year ago
  4. Wheat following corn’s lead, down as much 15 cents, but fighting its way back
  5. US Hard winter wheat is now more competitive with EU wheat
  6. Once Russia tax is imposed starting Feb 15 – US exports could be on the rise

CATTLE

  1. Feb LC up .10 @ 113.52 & Jan FC up .55 @ 134.95
  2. Jump in beef may support more upward movement for Feb futures
  3. Cattle on feed out 2:00 p.m. CT on Friday – market looking for friendly report
  4. Today’s slaughter est. at 119K head
  5. Asking prices around 113 for LC & @ 133.43, down 1.55 for 1/18 for FC cash index
  6. O/I: -4312 contracts for Feb LC & O/I: -666 contracts for Jan FC

HOGS

  1. February Hogs up .92 @ 67.40 & Feb Pork Cutout up .97 @ 78.40
  2. Pork weakness is a bearish force & June breaks uptrend channel
  3. Fall in feed grains help support hog futures for the day
  4. Hog slaughter estimated at 496K
  5. Cash lean index @ 65.56, up .39 for 1/15
  6. O/I: +6790 positions for hogs & pork cutout futures unchanged

Top Farmer Closing Commnetary 1-19-21

CORN HIGHLIGHTS: Corn futures finished with losses of 5 to 7-3/4 cents as September lead today’s drop. March closed 5-1/2 lower at 5.26 and December 5 weaker at 4.55. Export inspections typically released on Monday were published this morning due to yesterday’s holiday. All other reports typically released during the week will be one day delayed. Export sales will be out on Friday. Today’s inspection figure came in at 34.5 million and was considered supportive for prices. So far in this marketing year, 680 mb of corn have been inspected, sharply higher than a year ago at this time by an increase of 82%. Exports are estimated at 2.550 bb. Last week the USDA lowered sales by 100 million bushels which has some scratching their head considering sales and inspections are well ahead of schedule and there are signs the rest of the world’s exporting countries may also have tight inventories. Nonetheless, it is early enough in the marketing year that high prices may likely slow demand and with the Brazilian second crop corn just being planted there is no feasible way to argue for a lower yield at this time.

SOYBEAN HIGHLIGHTS: Soybean futures with sharp losses as prices weakened throughout the session and into the close. Nearby March lost 31 cents closing at 13.85-3/4 and November down 9 at 11.88. Export inspections typically released on Monday were published this morning due to yesterday’s holiday. Today’s figure was 75.6 million, a supportive figure. Year to date inspections now total 1.578 bb, up 78% from last year at this same time and 70% of the expected yearly total sales of 2.230 bb. All other reports typically released during the week will be one day delayed which means export sales will be out on Friday. Improved crop prospects in South America from pesky dry conditions had soybeans on the defensive today as did stop orders being triggered under the daily lows from last Wednesday and Thursday. Yet big picture perspective continues to suggest strong demand could pull soybean prices to the 15.00 area. There was announced export sale to China of 132,000 mt, however this is for the 21/22 marketing year. So was today nothing more than a bullish market that needs a correction or is this the beginning of something more meaningful suggesting the top could be at hand. At this time will make the argument that tightening carry out and good demand support the fundamental argument for higher. With that being said, if behind on sales it is time to move. This rally has been stronger than expected and while we can argue there are likely crop condition issues in South America high prices do curb demand and if recent rains continue prospects for a good crop remain alive and well. Talk than an outbreak of covid-19 in China could curb demand was also sighted as a reason for today’s price drop.

WHEAT HIGHLIGHTS: Mar Chi wheat down 3 1/4 cents, closing at 6.72 1/4 and May Chi down 3 cents, closing at 6.73 1/2. March KC wheat up 1 cent, closing at 6.44, while KC May closed up 1 cent at 6.47. Wheat started off the morning with a strong start, being pulled by Paris milling futures gapping higher this morning as well, but as can be seen was pulled back down by the close. Overall, the case is relatively bullish for US wheat as prices rise not just in EU prices, but add counties like Russia, Ukraine, China and Argentina to the list as well. It’s been years since we’ve seen this level of bullish sentiment in wheat futures, which is shocking when you consider the global supply of wheat that is still projected to be on hand in 2021. The biggest thing our wheat market needs to see is the proof in the rumor that our exports are going to increase. This morning’s grain inspection report was hardly promising coming in t 276,8000 mt versus last week’s 279,300 mt. The USD has made a minor recovery but still low in the over all trade and still below the 100 and 50 day moving averages which “should” be supportive to exports. If US export sheets could turn more aggressive, wheat could potentially push to $7. However even without, as long as corn & soybeans continue to be demand driven, wheat has not even begun to act like it might wave a white flag anytime soon.

CATTLE HIGHLIGHTS: Cattle futures finished mixed on Tuesday with buying noticed in the front-month contracts. February cattle gained .550 to 113.325, while April hogs finished 1.150 higher to 119.350. Slight selling pressure was seen in the deferred contracts, dropping .150-.350 cents. The front end contract have been supported by good strength in the retail market. At midday, Choice carcasses gained 2.60 to 217.64, and Select were .12 higher to 205.96. This has kept the trend higher in the carcass values, maintaining last week’s strength. This should help optimism for the cash market this week, which was undeveloped on Tuesday. Fed Cattle exchange should help get a start to the cash market tomorrow, but the bulk of trade will likely hold off until the end of the week. Friday brings the January Cattle on Feed report. Expectations are for total cattle supplies to be even or lower than last year. The weakness in the grain market help push feeder cattle futures higher again on Tuesday. January was slightly lower down .175 to 134.400, but April feeders gained .975 to 136.800, and March feeders were 1.300 to 139.600. January feeders were under the influence of the Feeder Cattle index trading 1.04 lower to 134.45, keeping that contract in check. The cattle market looks to be trying to build some seasonal momentum, but may need a cash market to show strength to bring more buying into the market.

LEAN HOG HIGHLIGHTS: Hog futures strongly lower on Tuesday as most contracts posted triple digit losses. February hogs were down 1.450 to 66.475, and April hogs dropped 1.225 to 71.425. Hog futures quickly gave back some of Friday’s strength as concerns regarding the Chinese hog herd and weak cash markets weighed on futures. Deferred contracts saw some long liquidation after last weeks firmer tone. A Reuter’s article over the week discussed that the Chinese hog herd is nearly recovered from there ASF outbreak, with total production down only 3.3% from last year. This was faster than most analyst expected, and brings concern on longer-term demand. The hog market still has ample supplies of slaughter hogs available, and cash markets still reflect that. The lean hog index turned lower today, dropping .31 to 65.56. Keeping a close eye on demand, retail carcasses were quiet, but higher at midday today. Hog carcasses gained .07 to 78.59. Load count was moderate at 202 loads. Technically, today’s week close is concerning, and opens the door for additional long liquidation, especially if carcass values work lower.Top

Top Farmer Midday Update 1-19-21

CORN

  1. March down 6 @ 5.25 & Dec down 4 @ 4.56
  2. Export inspections 876.7K mt versus 1.130M mt last week
  3. Daily export sales of 128K mt to Japan & 100K mt to Israel
  4. Big demand from China may help support more buying
  5. Argentina’s rainfall last week helped but outlook to turn drier than expected
  6. Ukraine also contemplating corn export restrictions
  7. Argentine government weighs higher export taxes

SOYBEANS

  1. March down 24 @ 13..92 & Nov down 7 @ 11.90
  2. Export inspections 2.058M mt versus 1.778M mt last week
  3. Daily export sales of 132K mt to China
  4. Brazil weather improved but east-central & northeastern Brazil still too dry
  5. Soybeans fall on Pal oil futures collapsing – will bean oil right behind it
  6. NOPA crush at 183.2 mb under the expected 185 however still record high

WHEAT

  1. March down 3 @ 6.72, KC Mar down 1 @ 6.43, Mar MPNL down 1 @ 6.51
  2. Export inspections 276.8K mt versus 279.3K mt last week
  3. Russia tax supportive & China demand strong
  4. Bitter cold to hit Ukraine & N. Russia however little damage due to snow coverage
  5. Northwestern US Plains could potentially see damaging weather for winter wheat
  6. Paris milling futures gapped higher, pulling wheat with it, however trending lower

CATTLE

  1. Feb LC up .80 @ 113.50 & Jan FC up .10 @ 134.67
  2. Weights up and weather not as bad as feared
  3. Lack of consistent support in boxed beef & cash cattle is keeping upside limited
  4. Today’s slaughter est. at 118K head
  5. Cash trade quiet for LC & @ 134.05, down .18 for 1/15 for FC cash index
  6. O/I: -3801 contracts for Feb LC & O/I: -318 contracts for Jan FC

HOGS

  1. February Hogs down .95 @ 66.97 & Feb Pork Cutouts down .92 @ 77.92
  2. Technical action improves but upside appears limited
  3. Inability to stabilize pork cutout values led to aggressive wide price swings in market
  4. Hog slaughter estimated at 496K
  5. Cash lean index @ 65.56, up .39 for 1/15
  6. O/I: +6790 positions for hogs & pork cutout futures unchanged

Top Farmer Closing Commentary 1-15-21

CORN HIGHLIGHTS: Corn futures closed with small losses in the old crop contracts with March leading the decliners, closing 2-3/4 lower at 5.31-1/2. December gained 2-1/4 cents closing at 4.60. It has been quite a week for the corn market as front month futures registered a gain of 35-1/4 cents, pushing into new contract highs and the highest level in 7 years. Strong export sales, weather uncertainty in South America, a downtrend in the dollar and friendly USDA reports all provided underlying support. The big surprise for the week was the drawdown in production, where yield dropped from 175.8 bushels an acre to 172. On the surface, just as equally surprising was the 100 million bushel drop in exports. The implication may simply be that higher prices equal less quantity demand or a higher level of confidence that Brazil will have a strong second crop. Whatever the case, the market responded very positively to a drop of 150 million bushels in carryout. This figure is supportive, but the market was anticipating about a 100 million bushel drop so not that much of a surprise.

SOYBEAN HIGHLIGHTS: Soybean futures were the recipient of traders bear-spreading futures today, reversing bull spreads from earlier in the week. Nearby March futures lost 13-3/4 cents, closing at 14.16-3/4. November gained 1-1/4, closing at 11.97-1/4. For the week, front month March futures gained 42 cents. Supportive news came in the form of lower projected carryout on Tuesday’s Supply and Demand report. Yield was dropped 0.5 bushels an acre to 50.2. Today’s crush figure was also viewed as supportive at 183.59 million bushels for the month of December. Expectations were slightly higher at 185.7, yet today’s figure was still 4.8% above a year ago and a new record for December. Good export sales this week were notched as well placing doubt as to whether the USDA has raised the projected export figure enough. Additionally, one might ask if higher prices are curbing demand. Projected carry out at 140 million bushels confirmed tight supply and this had traders on the offensive aggressively buying after the USDA report.

WHEAT HIGHLIGHTS: Mar Chi wheat up 5 1/2 cents closing at 6.75 1/2 and May Chi up 5 1/2 cents closing at 6.76 1/2. March KC wheat up 6 1/2 cents closing at 6.46, while KC May closed up 6 cents at 6.46. From last week’s close to today’s Chi wheat gained 36 ¾ cents and KC wheat gained 48 ¼ cents. Prices were up early in the morning, fought out the negative, and once again closed positively for the day. A few things were pulling and pushing on wheat prices today. This morning Paris milling futures gapped higher again, and US wheat was pulled along as well. Also, Russia released today that they will be imposing a 50 euros export tax starting March 15, 2020 – up from the 25 euros that will be applied on Feb. 15, and 5 more euros than rumored 45 euros earlier in the week. However, corn and soybeans turned negative today which reluctantly pulled wheat back to the red midday today. However, between Russian production concerns, export concerns, and EU prices continuing to press higher, wheat came back toward the close. The EU ag resources reported, a much larger wheat harvest is expected than in 2020 and this rebound could outstrip the projected rises in human/industrial demand. The forecast for EU wheat 2021-22 production was revised up by 100,000 tons to 129.7 mt. The figure is substantially higher than the 119.3 mt produced by the 27 nations for the 2020-21 season.

CATTLE HIGHLIGHTS: Cattle futures finished the week with buying strength, as February cattle gained 0.700 to 112.775, and April cattle gained 0.975 to 118.200. The cattle market saw some short covering going into the three-day weekend with the market closed on Monday. For the week, February cattle still were 1.700 lower, and April dropped 1.100. The front month cattle have struggle with a large slaughter pace and lower cash market this week. Cash trade was quiet today, as most business was done earlier in the week. Trade this week was disappointing at $109-111, lower than last week. Estimated slaughter on Friday was 115,000, steady with last week and last year. This has kept pressure on the front of the cattle market, despite a strong move in carcass values. Choice carcasses were 0.25 high at midday to 213.62 and select gained 2.08 to 203.15. Choice carcasses have traded high this week, gaining over $6.00 from last Friday’s close. The strength in the retail market may led to some cash optimism to start next week. Today’s close improved the technical picture in front month cattle, and the market may be open for additional short covering next week. The strength in the market stays in the deferred contracts as these are trading at or near contract highs. The technical picture looks strong going into next week in the back end contracts and will likely keep their strength. Feeder market posted strong gains on Friday. January feeders gained 1.975 to 134.575, and March finished 2.450 higher to 135.825. The overall strength in the cattle market help led to short covering in the feeder complex as well. A quiet day in the corn market also helped bring buying support.

LEAN HOG HIGHLIGHTS: Hog futures finished mixed on Friday, with buying strength in the front end. February hogs gained 1.625 to 67.925, and April was 0.575 higher to 72.650. For the week, February hogs dropped 00.775, and April was 0.175 lower. The hog market saw some short covering and profit taking going into the three-day weekend. Selling pressure has stayed in the front month hogs, as slaughter numbers have stayed heavy and production strong. The cash market has stayed quiet but may be poised to start working higher. The lean hog index has trended higher this week and gained another 0.39 today to 65.87. This may be reflective of an improving cash market. Pork carcasses have been choppy this week but saw strength at midday today, gaining 2.24 to 82.79. Moderate load count of 240 loads at that time frame. The product movement has been key given the record or near record weekly production. This will stay a key going well into 2021. Deferred contracts have shown good strength this week but were softer on Friday. Those contract have trended higher and show good technical strength. The number of hogs is expected to soften going into the second quarter of the year, and with feed prices trending higher, production may be more limited.

Top Farmer Midday Commentary 1-15-21

CORN

  1. March down 1 @ 5.32 & Dec up 1 @ 4.58
  2. US still cheapest corn globally out through May
  3. Farmers selling with prices being at prices not seen in 7 years
  4. Despite rains this week, Argentina looks to turn dry afterwards
  5. Crop expectations drop to 46 mmt compared to USDA’s 47.5 mmt
  6. Argentina’s crop conditions are 19% good/excellent vs 55% last year

SOYBEANS

  1. March down 7 @ 14.23 & Nov up 2 @ 11.98
  2. Palm oil futures falling are spilling over into soybeans today, cause of minor set back
  3. NOPA will reveal Dec. soy crush at 11:00 today
  4. S. American weather friendlier for Brazil as much needed rains continue to fall
  5. China raised soybean imports to a record large 100.3 mmt – 13% higher than last yr
  6. Funds remain long with roughly 225,000 contracts
  7. Jan. futures went off the board yesterday at 14.10 3/4

WHEAT

  1. March down 3 @ 6.66, KC wheat up 2 @ 6.38, and MNPLS up 1 @ 6.49
  2. Paris milling futures gapped higher again today, initially pulling wheat along
  3. Rumor that Russia could extent export tax into the next year to try and stabilize prices
  4. Ukraine’s grain exports are down 18%
  5. US needs to see export demand increase in following weeks to support bullish sentiments
  6. IGC reported world wheat stocks are projected to rise to a record high of 309 mt

CATTLE

  1. Feb LC up .90 @ 112.95 & Jan FC up 2.27 @ 134.87
  2. Traders look for potential supply tightness & continued active beef demand for spring
  3. Higher feed prices expected to lighten cattle weights
  4. Today’s slaughter est. at 115K head
  5. Cash trade still developing around 108/109 LC & @ 135.05, down .18 for 1/12 for FC cash index
  6. O/I: -4443 contracts for Feb LC & O/I: +109 contracts for Jan FC

HOGS

  1. February Hogs up 1.30 @ 67.60 & Feb Pork Cutout up 1.15 @ 78.65
  2. Trade prepares for 3 day weekend – limiting price movement today
  3. Increased open interest could spark longer term buyer support next week
  4. Hog slaughter estimated at 424K & Saturday runs are expected near 287K head
  5. O/I: -5992 positions for hogs & pork cutout futures -33 positions

Top Farmer Closing Commentary 1-14-21

CORN HIGHLIGHTS: Corn futures finished with gains of 4-1/2 in December to 10-1/2 higher in July, which closed at another new contract high of 5.34-3/4. After looking somewhat soft on yesterday’s finish, prices wasted little time moving higher today on the heels of a strong weekly export figure at 56.6 million bushels. That puts year to date sales at 1.787 bb, or 70% of the year USDA projection of 2.550 billion. At this same time last year, sales were at 760 mb. With a strong export pace and fund money chasing commodities, whether it be reflective of tight supplies or inflationary concerns, the market trend remains higher. We stay with our bias that, if beans reach 15, it is likely old crop corn prices trade between 5.50 and 6.00. If you are making cash sales, we encourage a seamless transition over to call options. You are reducing the risk of holding inventory and replacing with a known risk in call option premium. Yes, options will be more expensive than they are during quiet periods, but this is a natural reflection of high volatility in high opportunity. Rumors China is buying corn and soybeans were in the market today.

SOYBEAN HIGHLIGHTS: Soybean futures rallied sharply today, finishing with gains of 15 to 25-1/2 cents as January lead gainers, closing at 14.36-1/2. New high closes were established on most futures contracts today. New crop November closed 20-1/2 cents firmer at 11.96-1/2 after reaching a high of 11.99. A very strong weekly export sales figure at just over 33 million bushels and talk that China is in the market to buy more soybeans as well as corn had prices on the offensive. By our numbers, total sales to date are 2.045 billion. The USDA is currently expecting 2.230 billion bushels to be sold. Therefore 91.75% of expected sales are already on the books. Remember, there was a sale of 17 million bushels announced this week that will be reflected in next week’s report. Typically, in a strong export market one would anticipate that carryout would continue to decline. The problem, however, is that with 140 million bushels of projected carry out there isn’t much more that the USDA can reduce. In other words, the price of soybeans may need to move higher to ration inventory.

WHEAT HIGHLIGHTS: Mar Chi wheat up 9 1/2 cents closing at 6.70 and May Chi up 9 3/4 cents closing at 6.71. March KC wheat up 10 3/4 cents closing at 6.36 1/2, while KC May closed up 10 1/2 cents at 6.40. Another day of higher prices for wheat as once again Paris milling futures climb higher, pushing our wheat along for the day as well. Followed up by corn and soybeans continuing to push higher today as well. Dry weather continues to keep support under the market, as the drought monitor for another weeks shows plenty of drought hanging on in the western Plains with an expansion of dry conditions. Tonight’s snow will help some in the northern Plains but not nearly enough to counter the effects of the drought thus far. Export sales once again continued to falter despite the fact the US dollar remains low. USDA said 8.2 mb of wheat were sold for export last week. Although the fundamentals have yet to shift for the wheat market, prices continue to follow along the corn and soybean market, and weather concerns and low ending stocks keep support under the prices for now.

CATTLE HIGHLIGHTS: Cattle futures finished mixed on Thursday, as prices have continued their recent trends, weakness in the front months and strength in the deferred. February cattle lost 0.175 to 112.075, and April cattle slipped 0.250 to 117.225. Deferred contracts rallied again to establish new contract highs, as buyers have stayed active in those long-term positions. Strength returned to the grain markets today; that encourages the longer term buying in the front months. Weak cash markets and heavy supplies keep the sellers active. A moderate amount of cash trade occurred yesterday, but some follow through trade established today. Most trade was $109-111, steady with yesterday. Slaughter stays heavy, estimated at 120,000 head for the day, which is higher than last week, but 3,000 head under last year. The ample supplies keep the cash market pressured despite good strength on retail values. Boxed beef values maintain their uptrend. Choice carcasses gained 2.49 to 213.49, and select was 2.10 higher to 201.16. Carcasses have been trending higher since last week on moderate demand. Weekly export sales stayed firm at 16,800MT last week. The China demand stays in the U.S. beef market picking up 2,800 MT. Mexico was last week’s top buyer at 6,600 MT. the export demand will be a key to prices in 2021. Feeder cattle struggled with the higher grain market today. January feeders dropped .975 to 132.600, while the March contract slid 0.950 to 133.375. Countryside cash markets have been staying firm, and the feeder cattle index is trading at 135.49, which should help front month futures.

LEAN HOG HIGHLIGHTS: Hog futures finished softer on Thursday as the February hogs dropped 0.550 to 66.300, and April lost 0.875 to 72.075. The hog market saw selling pressure after weekly export sales set the tone for the morning. Overall sales were firm at 23,800 MT for last week, and Mexico was the top buyer at 6,600MT. Missing from the report was the lack of Chinese purchases for the week. This may have been only a one week miss, but the markets are still cautious with the improving Chinese hog herd. Export shipments were 30,000 MT, and China was the top destination for U.S. pork helped soften the blow. With heavy slaughter in front of the market, demand on the export side will still be the key for 2021. Cash market stays pressured, but the lean hog index has been trending higher, gaining 0.99 to 65.48. The index has closed the gap to the February board. Estimate slaughter today was 497,000 head, and with weights staying heavy, this keeps weekly production at or near record levels. Pork carcasses recovered off yesterday’s weakness, gaining 5.54 to 83.67. Product movement has been very good, 150 loads at midday today. Heavy supplies pressure the front of the market, but the strength has been in the deferred contracts. Despite today weakness, the back month contracts were in consolidation mode today, and remain technically strong. Higher grain prices are pushing the deferred futures on the prospects of tighter supplies due to higher feed costs.

Top Farmer Midday Update 1-14-2021

CORN

  1. Mar up 7 @ 5.31 & Dec up 3 @ 4.56
  2. Export net sales of 1.437M mt – up 92% from last week
  3. Argentina still looks okay for this week, but next week hotter weather is expected
  4. Funds net buyers of 20K contracts & O/I +16000 contracts
  5. Outlook for better demand & smaller production supports prices
  6. Argentine farmers finally end strike after gov’t lifted caps & bans

SOYBEANS

  1. Jan up 2 @ 11.13, Mar up 21 @ 14.27, Nov up 21 @ 11.96
  2. Most of Brazil’s most important grain areas will receive rain at one time or another this week
  3. Funds net sellers of 8K contracts & O/I +2500 contracts
  4. Export net sales of 908,00 MT
  5. Despite the palm oil futures gapping lower, soybeans & meal push back and rally through
  6. Brazil Ag agency puts Brazil’s crop at 133.7 mmt vs USDA’s 133 mmt

WHEAT

  1. Mar up 11 @ 6.72, Mar KC up 11 @ 6.36, Mar MNPLS up 11 @ 6.47
  2. Export net sales of 221,900 mt – down 19% from last week
  3. Winterkill is not much of a threat to the US for next 10 days & S. Russia getting snow/moisture
  4. Funds net sellers of 4K contracts SRW wheat & O/I +2700K contracts & HRW -1100 contracts
  5. Argentina raised wheat crop to 17 mmt – still 500K mt lower than USDA
  6. Paris Milling futures & EU prices continue to pull on US wheat prices

CATTLE

  1. Feb LC down 0.40 @ 111.85 & Jan FC down 0.92 @ 132.65
  2. Export net sales of 16,800 MT – primarily exported to Japan & S. Korea
  3. Markets down as traders continued concern over production costs, demand, cash values
  4. Today’s slaughter est. at 116K head
  5. Cash trade still developing around 108/109 LC & @ 135.05, down 0.18 for 1/12 for FC cash index
  6. O/I: -8817 contracts for Feb LC & O/I: -396 contracts for Jan FC

HOGS

  1. Feb Hogs down 0.10 @ 66.72 & Feb Pork Cutouts down 0.20 @ 77.60
  2. Export net sales of 23,800 MT – primarily to Mexico
  3. Futures continue to struggle as 15 per cwt loss saw in pork bellies yesterday
  4. Lack of strong export demand from China continues to pressure futures
  5. Hog slaughter estimated at 93K & Saturday runs are expected near 256K head
  6. Cash lean index @ 65.48, up 0.99 for 1/12
  7. O/I: -7195 positions for hogs & pork cutout futures -40 positions