News Source: SPC
Top Farmer Midday Update 9-17-18
CORN: Corn futures are trading 2-1/2 cents lower this morning with Dec contracts trading at 3.49-1/4, Mar at 3.61-1/4 and May at 3.69-3/4. Corn markets made new lows today with the Dec contract reaching as low as 3.48-1/2, one tick lower than the previous low set on 9/13. The funds are holding nowhere near an extreme short position; selling interest may dry up soon as corn stocks will be much tighter this year than in past years. This week's USDA Grain Inspections report was delayed.
SOYBEANS: Soybean futures are lower this morning, with Nov down 3-3/4 cents to 8.26-3/4. Jan is down 3-3/4 cents to 8.40-1/2, and Mar is down 3-1/4 cents to 8.54. Trade rumors have been the main sources of information flow for today's session. The U.S. is expected to roll out another round of tariffs early this week, and there is speculation that China could reject the latest offer for trade negotiations. These are rumors, and without concrete information, the state of the U.S./China trade war is unclear. Meanwhile, soybean stocks are inflating as a big crop appears to be getting bigger. Export inspections data is delayed and will be reported when released.
WHEAT: Wheat futures are mixed this morning with Dec Chi contracts down 3/4 cent to 10-3/4. Dec KC is down 1 cent to 5.15-1/4, and Dec Mpls is up 3-3/4 cents to 5.76. On last Friday's Commitment of Traders report, data indicated that speculative fund traders liquidated over 24,000 long positions. While funds historically prefer to be short wheat markets, and they are currently nowhere near an extreme short position, selling interest may be drying up in the face of much lower world wheat production expected for this year. Futures contracts are likely oversold on a short term basis, which could draw some buyers.
CATTLE: Cattle futures are mixed to lower this morning, as futures try to collect themselves from last Friday's huge strength. The nearby Oct live cattle contract is down 7 cents to 113.72, Dec is up 7 cents to 118.12 and Feb is up 12 cents to 122.02. Feeders are down slightly, with Sep down 37 cents to 157.05 and Oct down 32 cents to 158.55. Cash trade reached as high as 109 to 110 late Friday afternoon. Questions about future pork availability due to hurricane disruptions and the potential for spreading African swine fever in China are helping beef prices. Technical indicators are giving overbought readings, which could produce some pressure today or early this week. However, Friday's surge out of recent ranges is a positive development.
HOGS: Hog futures are mixed this morning, as speculators continue to drive price movement in the wake of Hurricane Florence disruptions and the African swine fever outbreak in China. Oct hogs are up 15 cents to 56.37, Dec hogs are down 1.77 to 54.87 and Feb hogs are down 1.32 to 64.35. Price action so far today has been interesting, particularly for the Oct contract. Oct futures posted declines as much as 2.02 but have since rallied back. Deferred contracts, though down hard, are still holding some significant moving average support levels as prices stabilized within new trading ranges.
Top Farmer Closing Commentary 9-14-18
CORN HIGHLIGHTS: Corn futures saw quiet trading, and contracts finished with small gains. Dec corn were 1-1/4 higher to 3.51-3/4, and Mar was 1 cent higher to 3.63-3/4. Today was the last trading day for Sep futures, which finished at 3.37, up 3/4 cent from yesterday. For the week, Dec corn futures posted a contract low close and was down 15-1/4 cents on the week. Friday saw a small trading range from intraday high to low. Strength in wheat futures helped bring some carryover support into the corn market, but as the market still digests Wednesday's large jump in potential yield, any rallies would stay limited. Early harvest should begin soon across the southern Grain Belt and make progress into the weekend, as weather forecasts stay favorable. This could act as selling pressure over the market with some hedging pressure from new crop harvested corn. Technically, corn futures pushed to a new contract low this week, though trading back above the 3.50 level, leaving the short term downside available.
SOYBEAN HIGHLIGHTS: Soybean futures finished 1-2 cents lower. Nov beans were down 2-3/4 to 8.30-1/2, while Jan beans were down 2-3/4 to 8.44-1/4. Sep soybean futures finished their trading life today, closing at 8.21-1/2, down 1-1/4 off of yesterday's trade. For the week, Nov beans posted its lowest close for the contract, down 13-1/2 cents this week. Soymeal markets and the overall stockpile of beans have provided selling pressure on the soybean market. Nov soybean futures tried to maintain support at the 8.30 level, which has been the bottom of consolidation for the past couple weeks. Oct soymeal futures fell 6.60 per ton, as charts look to take some profits and are turning negative after a decent rally higher. Seasonally, this is the time when soybeans and meal futures sell selling pressure. With the abundantly large supply, prices will have difficulty rallying. The last couple of days, the market has seen some support on potential reopening of talks with China regarding trade and tariffs. Late afternoon, President Trump instructed his aids to proceed with tariffs on an additional $200 billion more in terms of Chinese goods. This was negative to the market, but it was an anticipated move and did not bring much additional selling pressure.
WHEAT HIGHLIGHTS: Wheat futures were the strength of grain markets today, as Chi contracts were 10-14 cents higher. Dec wheat futures were up 14-1/2 cents to 5.11-1/2, while Mar wheat was up 12-1/2 cents to 5.30-1/4. Chi Sep wheat closed its final trading day at 4.80 even, up 8-1/4 cents on today's trade. Buying strength carried over into other contracts as KC Dec winter wheat was up 14-1/2 cents to 5.16-1/4, while Mpls Dec spring wheat was up 10-1/4 cents to 5.72-1/2. For the week, Chi Dec wheat rallied off its lows to finish 1/4 cent higher for the week. After strong selling pressure Wednesday on the USDA numbers, short covering was the theme of the day heading into the weekend. With the bump in global carryout projections, as well as Russian wheat, the US is struggling to secure business on the export front. While US wheat is running at a discount to European and Australian milling wheat prices, the most recent surge in Russian supplies keeps that country competitive against US exporters. Rather staying relatively favorable across the Midwest for development of next year's winter wheat crop, the focus will stay strictly on demand, as we know where the supply pile currently rates. Until we see additional exports move to our shores, wheat futures and its rallies may be limited.
CATTLE HIGHLIGHTS: Cattle futures closed sharply higher, with the nearby Oct live cattle contract closing limit higher, up 3.00 to 113.80, Dec up 2.65 to 118/05 and Feb up 2.00 to 121.90. Feeders were up sharply as well with Sep up 2.47 to 157.42, Oct up 3.47 to 158.87 and Nov up 3.35 to 158.42. Carcass cutout values were down 75 cents at yesterday's close to 204.04 and were down another 16 cents today to 203.88. Live cash trade was undeveloped at the time of this writing, but 500 head were sold in IA today at a dressed basis of 172. Cash cattle are expected to trade higher later today. Another case of African swine fever was reported in China, and two cases were reported in Belgium. Though this does not directly affect cattle markets, any concerns about pork availability may lend support to beef demand. Technically, today's price action was extremely impressive. The Oct live cattle contract put in its highest close today since 3/12. Nearby feeders made their highest close over their contract life. A front month continuous feeder cattle chart shows the highest weekly close since November of last year.
LEAN HOG HIGHLIGHTS: Hog futures closed moderately higher today, continuing to find buyer interest on African swine fever fears. The nearby Oct contract closed 55 cents higher to 56.22, Dec closed 72 cents higher to 56.65 and Feb closed 32 cents higher to 65.67. The CME lean hog index was up a whopping 1.59 to 50.08. This was the biggest one-day jump in the index since 1/16 and the second largest one-day large in 2018. Carcass cutout values were up 19 cents yesterday afternoon to 71.05 and jumped 2.28 today to 73.33. Loins were up 4.56 to 79.83, and bellies were up 7.63 to 104.95. Carcass values are increasing in value so quickly due to plant shut downs from Hurricane Florence. New cases of African swine fever in Asia and Belgium were reported today, adding to fears that pork supply could face a serious drawdown. Technical developments were light today for nearby hog markets, but the Feb contract put in its highest close since 4/20. This signals the potential longer term effects of swine fever issues.
Top Farmer Closing Commentary 8-29-18
CORN HIGHLIGHTS: Corn futures finished slightly higher with Sep and Dec up 1/4 to 3.41-1/4 and 3.56-1/2 respectively. The Mar contract closed 1/2 cent higher to 3.69-1/2. Buyers were active overnight and early in today's session, pushing the Dec contract to a high price of 3.59. However, as delayed pricing contracts pressured prices in typical late August to early September time frame, corn struggled to find anybody willing to own. Rains in the forecast and those recently in the Midwest are mostly a non-factor, as most believe the corn crop has already been made at this point. Sharply higher wheat futures, including the Chi contract closing 16-18 cents higher and KC contracts 21 cents higher, was not able to provide much support at all, which is disappointing. Today was quiet on the technical trading front, with futures finding only a slight correction on oversold indicators. The Dec contract is less than 6 cents away from its all-time low, and a retest looks imminent.
SOYBEAN HIGHLIGHTS: Soybean futures closed higher today, falling off of stronger gains earlier in the session to close 2-3 cents higher. Sep futures ended the day at 8.23-1/4, Nov at 8.36 and Jan at 8.49-1/4. Similar to the corn market, much of the early strength was likely due to short covering and profit taking due to futures drifting into oversold levels. Fundamentally, there is nothing much positive in the soybean market at this point. Recent rains have been beneficial to the soybean crop, and the month of August has been ideal for adding bushels onto an already thriving crop. China has begun to buy soybean oil from Argentina for the first time in three years, as the government's resolve to not purchase soybean products from the US strengthens. Talk that the US soybean yield could come in as high as 54 bushels per acre on the Sep Supply and Demand report was a negative factor today and will continue with forecasts for warm and wet weather for the next two weeks. The Nov contract traded as low as 8.32, less than 6 cents away from the contract low of 8.26-1/4. A retest of this level is not out of the question at all neither are even lower prices, depending on how yields come in later this fall.
WHEAT HIGHLIGHTS: Wheat futures closed sharply higher today, taking advantage of reports that Russia may limit wheat exports later this season. Chicago contracts were up 16-19 with Dec closing at 5.41-3/4. KC was up 20-21 with Dec at 5.49-1/4. Spring wheat futures were up 14-15 with Dec at 5.91-1/2. On Monday and Tuesday of this week, the Dec Chi contract was able to hold support at the 200-day moving average level. Finding buyers on that, wheat futures were trading just moderately higher early in the session before rumors of limited Russian exports caused a surge of buyers to enter the market. Limiting Russian wheat exports would tighten the exportable supply and could shift business to the US. Global wheat demand has been strong recently with Egypt, Iran, Tunisia and Jordan purchasing a total of 1.2 million metric tons over the past two to three weeks. Wheat supplies will be down sharply this year due to poor conditions in Europe, the Black Sea and Australia, so importers are snapping up supplies while they are still reasonably priced. Technically, the Chi Dec close at the 100-day moving average was very positive. KC and Mpls contracts broke through overhead resistance as well with wheat in all three markets beginning a rebound out of oversold levels. As of last Tuesday, traders were long just under 61,000 contracts and have more room to buy if supply worries build.
CATTLE HIGHLIGHTS: Cattle futures put in mixed closes today with lives up, and feeders lower. The nearby Aug live cattle contract closed 1.37 higher to 109.17, Oct closed 25 cents higher to 108.70 and Dec closed 10 cents higher to 112.70. Aug feeders were down 2 cents to 149.32, and Sep feeders were down 35 cents to 149.17. Today's online fed cattle exchange was uneventful with only 751 head offered and zero actual sales. A few bids in the country have surfaced today at 106 but no actual trades have been reported at this time. Beef prices were mixed for today's session with choice down 1.23 yesterday afternoon to 212.40 but up 56 cents this morning to 212.96. Despite a sharp jump in beef production this year, choice beef is running about 12.00 higher than the same time last year and 20.00 than the same time two years ago. This is indicative of very strong demand, both domestically and abroad. Technically, besides the Aug live cattle contract, today's session was not all that impressive. The best traded Oct live cattle contract was unable to break back into its trend channel, but it was able to hold its 100-day moving average support level. Feeders held their 200-day moving average support level, but similar to the live cattle contracts, they were unable to break back into their higher trading channels.
LEAN HOG HIGHLIGHTS: Hog futures were mixed today as volatility continues in the wake of the Mexico trade deal and swine fever outbreak in China. The nearby Oct contract closed 45 cents lower to 51.55, Dec closed 37 cents higher to 53.72 and Feb closed 5 cents higher to 63.12. The CME lean hog index was down 70 cents to 47.09. Carcass cutout values were down 9 cents yesterday afternoon to 64.90 and lost another 52 cents today to 64.38. Loins were down 2.35 to 71.19, and butts were down 4.54 to 89.47. Major buying support was lacking today from the Mexico trade deal, because traders have realized that it could be months before an actual deal is enacted. IN addition, traders are beginning ot speculate that the African swine fever outbreak in China is being contained much more effectively than was previously thought. The Oct contract had a fairly disappointing session today, rallying early in the day but retaking losses and closing below the 20-day moving average level. Dec futures held their 10-day moving average but were unable to break through their 100-day moving average resistance level. The Dec contract has tested that level four times over the past two weeks but has been unable to make any closes above it.
Top Farmer Midday Update 8-28-18
CORN: Corn futures are down 1 to 2 cents this morning, with Dec trading 1-1/2 cents lower to 3.60. Prices have so far put in an inside session, unable to find much new buying interest on the positive Mexico trade announcement from yesterday. In reality, rumors of said deal were swirling for weeks, and the positivity was likely priced in already. In addition, the deal is just a preliminary agreement in principle and an actual agreement could take six months to iron out and will need Congressional approval. Though corn futures may be slightly oversold on a short-term basis, contract lows are just a dime away and a retest is not impossible. The USDA announced details of the trade relief package, which for corn producers will pay out 1 cent per bushel on 50% of 2018 production.
SOYBEANS: Soybean futures are down 7 to 8 cents this morning with Nov trading at 8.40-1/2. So far today, though prices are down, yesterday's lows have been held. Next support comes in at the contract's low for Nov at 8.26-1/4. Fundamentally, improving crop conditions are weighing on prices, but an announced export sale of 198,862 metric tons of soybean cake and meal to Mexico was supportive.
WHEAT: Wheat futures are slightly higher this morning, trying to stabilize after sharp losses over the past two weeks. Chi contracts are up 2 to 4, KC up 2 to 3, and spring wheat futures are mixed to slightly lower. The Dec Chi contract is currently trading at 5.26-1/4, working to contradict yesterday's close below the 200-day moving average level at 5.23. U.S. wheat shipments are running 35% behind last year with the USDA currently forecasting a 14% increase. The Mexico trade deal is a positive for wheat markets, but buying interest is likely rooted in technical trading as futures are oversold after closing 43 cents lower last week.
CATTLE: Cattle futures are taking triple-digit losses so far today, with lives down 1.30 to 185.00 and feeders down over 2.00 in the heavily traded contracts. Prices thus far appear to be indicating that yesterday's jump was too much. The trade spat with Mexico has not affected beef sales, as they are up 8.7% year-to-date. The Oct live cattle contract is trading back below its 100-day moving average level and Sep feeders are currently holding onto their 200-day moving average support.
HOGS: Hog futures are lower this morning, unable to push through technical resistance and instead attracting sellers. The Oct contract is down 1.75 to 53.02 and Dec is down 77 cents to 53.45. The Oct contract opened above the 50-day moving average level but quickly fell back below and the Dec contract briefly tested its 100-day moving average resistance level and was met with sellers. Questions remain about the severity of the African Swine Fever situation in China, and it is unclear how much of an effect this outbreak will have on world pork supply.