News Source: SPC
Top Farmer Closing Commentary 4-9-20
CORN HIGHLIGHTS: Corn futures finished quietly and with little change for the day or the week. May futures closed at 331-1/4, up 1 cent for the week. New crop December closed at 3.50-3/4, up 1-1/2 cents. Today’s Supply and Demand report increased carry out by 200 million bushels, as increases in feed were offset by a crop of 325 million bushels in ethanol usage. Stable energy prices helped provide support this week. Today’s OPEC meeting today had market watchers guessing that a rumored reduction of 10 to 20 million barrels per day of production from OPEC countries and Russia would help to stabilize energy prices. If there is light at the end of the tunnel for the impact of corona, strong demand may help energy. Until that happens, expect limited upside for energy and corn in the near term. Today’s export sales figure at 72 million was supportive.
SOYBEAN HIGHLIGHTS: Soybean futures finished firmer, gaining 9-1/4 cents in May and closing at 8.63-3/4. New crop November finished at 8.75-3/4, its highest close in six sessions. Today’s close was encouraging for those who are friendly, considering there really wasn’t much supportive news. The soybean/corn price ratio near 2.5 is suggesting there could be more soybean acres and less corn acres. The USDA Supply and Demand report increased carryout more than was expected with today’s figure at 480 million bushels, an increase from last month’s 435 million. Slow farmer selling and talk that China may be in the market provided support. Yet, a weak Brazilian Real will likely keep export expectations smaller. Today’s report dropped expected sales to 1.775 billion, down 50 million from a month ago. We are somewhat surprised, given the trade deal signed with China. We expect the USDA is anticipating more sales later in the year after the marketing year ends August 30. Weekly sales at 19.2 today were considered neutral.
WHEAT HIGHLIGHTS: May Chi wheat was up 8-1/4 cent today, closing at 5.56-1/2 and gaining 7-1/4 cent for the week’s trade. May KC wheat was strong today, up 14 cents closing at $4.92 and gaining 20 cents for the week. As with all weather, trying to figure out what the market should be paying the most attention to is tricky. All week we’ve heard rumors of dry weather or too wet here in the states, but the change in forecast to a “winter-like” April got the attention of traders. If this ends up coming through next week, there will certainly be reason to be concerned for any early planted row crop and certainly for the winter wheat crop. USDA increased U.S. ending stocks in wheat from 940 mb to 970 mb. USDA also increased world ending stocks from 287.14 mmt to 292.7 mmt. Exports were very weak today at 9.5 million bushels.
CATTLE HIGHLIGHTS: Cattle markets ended the day with mixed to mostly lower closes today, with April lives up 1.17 to 94.00, June lives down 2.30 to 84.37 and August lives down 1.45 to 90.75. May feeders were down 0.42 to 118.95 and August feeders were up 1.32 to 128.87. Choice beef values made their lowest close yesterday since March 13, down 5.54 to 222.34. Choice beef was bounced 1.31 higher this morning to 223.65. Cash markets were quiet today, but trade did slip a bit lower yesterday afternoon. Cattle traded in NE at 103.50-105.00, down from 105.00 earlier in the week. Still, given the sharp discount of April futures to cash, it was not exceptionally bearish. Reports of closing packing plants due to the spread of coronavirus are still growing, and though major disruptions are not currently a problem, the situation should be monitored. If closures continue, demand for slaughter supplies could pull back. The best traded June live cattle contract closed the gap created yesterday and was unable to push through nearby resistance at the 10-day moving average. Still, prices were able to stabilize in the afternoon and settled near the middle of the day’s range. Feeder contracts were able to check nearby support and hold current price levels.
LEAN HOG HIGHLIGHTS: Hog markets posted lower closes to end the week on follow-through from yesterday’s bearish key reversals. April was down 0.32 to 42.80, June was down 2.77 to 48.67 and July was down 2.10 to 54.75. The CME Lean Hog Index was down 2.55 to 52.97, its lowest value since March 13 of last year. Carcass cutouts closed 3.32 lower yesterday afternoon at 51.41, their lowest price since November 2002. Cutouts were up 0.91 this morning to 52.32. Fears of plant closures due to the spread of coronavirus continue to pressure hog markets. This morning, a Smithfield plant in South Dakota announced it would be closing for three days after 80 employees tested positive for the virus. Other plants have closed lately as well, and if these disruptions continue, they could stabilize pork values but will also force higher production in the future as animals back up in the country. Export sales for the week ending April 2 were reported today at 55,913 tonnes, the highest single week sales total since October. June hogs traded within a relatively quiet range today and closed just off the session lows. Stochastics are still deeply oversold.
Top Farmer Midday Update 4-9-20
Corn markets are slightly lower in quiet trade ahead of the April Supply and Demand report. May, July and Dec are all down 0.005 to 3.295, 3.35 and 3.4875 respectively. Dry conditions in Brazil along with the strengthening Brazilian real are supportive, though corn is still in a downtrend due to dismal ethanol demand. Corn sales this week were strong, with 1.85mmt reported sold for the week ending April 2, a marketing year high. This was up 72% from last week and up 41% from the previous 4-week average. July corn is currently making its second consecutive inside session which could make corn more susceptible to a breakout soon. Stochastics are still oversold. Funds were thought to have sold about 4,000 contracts of corn yesterday.
Soybean prices are finding a bit of buying ahead of today’s WASDE report, with May up 0.07 to 8.615, July up 0.065 to 8.6825 and Nov up 0.04 to 8.72. Lower palm oil production in southeast Asia is increasing demand for soybean oil, and crushings in the US and China have kept demand high for raw beans as well. Export sales for the week ending April 2 came in at just 523,500 tonnes, down 45% from last week and down 25% from the previous 4-week average. July futures have punched through their 20-day moving average resistance levels after several tests lately. July is currently testing its 10-day moving average, and a close above both lines would be the first since March 31. Funds were thought to have sold about 1,000 contracts of soybeans yesterday.
Wheat markets are higher ahead of today’s Supply and Demand report, with May CHI wheat up 0.055 to 5.5375, May KC wheat is up 0.0925 to 4.8725 and May MPLS wheat is up 0.02 to 5.32. KC wheat producing areas of the US are forecast to see below normal temps for the next two weeks, and areas of Russia reportedly have about half of normal soil moisture levels. French production estimates are still falling as well. The higher Russian ruble is supportive. All three wheat markets have pushed above their 10-day moving average resistance levels for the first time since April 1. The US sold nearly 258,000 tonnes of wheat for the week ending April 2, up sharply from last week but down 36% from the previous 4-week average. Funds were thought to have sold about 1,000 contracts of Chi wheat yesterday.
Cattle markets are down today after unsuccessful tests of resistance yesterday. April lives are down 0.57 to 92.25 and June lives are down 2.57 to 84.10. May feeders are down 2.12 to 117.25 and August feeders are down 1.00 to 126.55. Beef values are still sliding lower, and some late afternoon cash trade in NE yesterday started to slide lower than 105. The stock market is higher which could mean traders are expecting things to return to normal sooner than initially expected, but heavy production lately is overwhelming the reduced demand. Live cattle futures are filling gaps made yesterday and are trading towards the middle of the day’s range so far.
Hog markets are down today following yesterday’s disappointing losses. April hogs are down 0.92 to 42.20 and June hogs are down 2.00 to 49.55. Pork and cash hog values are still moving lower and it is unclear how cheap pork will need to get to clear product. Reports of African Swine Fever in Poland and China are supportive, and news that hog weights are beginning to drop is also a positive surprise. June hogs, though showing triple digit losses, have traded within a very tight range today in a relatively quiet session. Technicals are still oversold and momentum indicators look mixed at best.
Top Farmer Closing Commentary 4-6-2020
CORN HIGHLIGHTS: Corn futures started this week where they left off last week, lower as traders continue to concern themselves about demand. A crash in energies, followed by a crash in livestock prices, suggests that demand revisions will be forthcoming, perhaps on this week’s Supply and Demand reports due out Thursday. May corn lost 3 cents, closing lower for the seventh consecutive session at 327-3/4. New crop December closed down 2-1/2 at 348-1/4. Corn export inspections at 50 million bushels was supportive, yet prices continued their decline. Worries that energy prices around the world will soon come under more pressure due to reserves filling up and lack of demand for fuel as consumers stay home continue to be reasons for weak corn prices. Not to mention, managed money has stayed on the short side now for more consecutive weeks than at any time since being tracked.
SOYBEAN HIGHLIGHTS: Soybean futures finished with small gains for the first time in four sessions. Nearby May closed at 855-1/2, up 1-1/4 and November up 3-3/4 at 865-1/4. Soymeal futures finished lower with both May and July closing under 300/ton. After racing more than 30/ton higher in recent week, futures have now given most of these gains back. A big drop in livestock prices and continued demand for soymeal elsewhere in the world is hurting prospects for soymeal demand. Export inspections at 11 million bushels were well below the 29 million needed on a weekly pace to meet USDA projections. The needed weekly amount is 28 million bushels. South American weather suggests a small downgrade to the crop and could be reflected on this week’s USDA report due for release on Thursday. The big picture perspective suggests, however, that beans are a good value, and if China steps up to buy, the big picture could look friendly. The price of new crop soybeans/new crop corn, however, suggests that at the current 2.8 ratio, farmers may plant more soybeans.
WHEAT HIGHLIGHTS: May Chi wheat up 6-1/2 cents today, closing at 5.55-3/4. KC wheat following suite, up 3-3/4 cents closing at 4.75-3/4. Wheat gained support today as dry weather reports out of Russia were released. Weather for wheat domestically is also experiencing some dry conditions in the southwestern Plains, but nothing significant to cause concern yet. Winter wheat crop conditions came in this week at 62% good/excellent. Wheat exports have slowed, and inspection numbers weren’t friendly either, coming in at 11.8 million bushels – that’s half of what is needed to stay on pace with USDA’s export estimate. Weather for wheat domestically is also experiencing some dry conditions in the southwestern plains, but nothing significant to cause concern yet. Winter wheat conditions came in this week at 62% good/excellent crop.
CATTLE HIGHLIGHTS: Cattle markets made mixed closes today, with pressure persisting in the near month live cattle. April lives were down 4.50 to 83.82, June lives were down 0.55 to 80.30 and August lives were up 0.52 to 84.82. May feeders were up 1.20 to 109.30, and August feeders were up 2.07. Choice beef values made their lowest close on Friday since March 16, down 2.20 to 230.44. Choice beef was down another 0.70 this morning to 229.74. Beef values have closed lower for nine straight sessions, but have only retaken a little more than half of the previous surge. Cash cattle traded as low as 105 on Friday afternoon vs 112-112 earlier in the week and 120-122 the previous week. Especially given the sharp selloff in April lives, futures are trading at a historic discount to the cash market. This does not necessarily telegraph a rally in futures. June live cattle opened sharply lower but quickly rallied into positive territory. June settled with slight losses, and though prices have returned to their Bollinger band range, stochastics are still oversold. May feeders showed similar price action, opening sharply lower and then rallying by mid-morning.
LEAN HOG HIGHLIGHTS: Hog markets made higher closes today, likely due to some technical buying after the recent sell-off. The CME Lean Hog Index was down 2.43 to 60.65. Carcass cutout values made their lowest close on Friday in more than a decade, down 1.84 to 57.37. Pork values bounced 2.01 this morning to 59.38. As of Friday afternoon. Pork values had fallen over 26.00 in just nine sessions. Slaughter last week was up 4.1% from the same week last year and total production was up 4.4%. The market is still very concerned that heavy production in April will continue to overwhelm seriously diminished pork demand. The best traded June contract made a sweeping bullish key reversal today, opening with limit-down prices but surging into positive territory in the late morning. Stochastics are still deeply oversold but today’s action may be signaling that prices are low enough to clear some inventory.
Top Farmer Closing Commentary 3-31-2-
CORN HIGHLIGHTS: Corn futures finished with small loses as May finished at 340-3/4 down 1/2 cent and December new crop down 2-1/4 at 357-1/2. Today was an interesting day as the much-anticipated quarterly Stocks and Acreage report had some surprises. Today’s acreage figure was bigger than expected at 97 million, yet quarterly stocks, about 200 million bushels less than anticipated. Pre-report numbers had acreage at 94.3 million and stocks at 8.162 billion. The effective yield for 2019 crop could be near 165.5 bushels an acre using harvested acres at 80 million and reducing overall production by 200 million, or about 2.5 bushels an acre. The market still has a negative tone to it. As we look ahead, energy will be the driving force as will weather. Firmer wheat prices might suggest corn could be searching for a bottom. In addition, a slow ethanol grind will likely reduce usage, yet feed users may purchase additional corn for feed.
SOYBEAN HIGHLIGHTS: Soybean futures finished with gains of 3 to 3-3/4 cents as May lead today’s positive futures market higher, closing at 886. New crop November closed at 877-1/2 gaining 3 cents on the day. The much-anticipated stocks and acreage report was released today and was term supportive on acres and neutral on stocks. Soybean expected plantings was 83.51 million acres compared to the pre-report estimate of 84.7. Last year’s figure was76.1 million, considerably lower due to wet weather. Quarterly stocks were estimated at 2.243 billion bushels and slightly above the pre-report estimate of 2.237. Last year was 2.727 million. Today’s figures lack any real punch. Bullish traders will suggest futures help together well despite continue weakness in energy prices and concern regarding corona virus. They will also point to more demand for soymeal as a tighter supply of DDG’s is likely due to less ethanol grind.
WHEAT HIGHLIGHTS: May Chi wheat closed down 3/4 of a cent today at 5.68-3/4, while May KC wheat ramped up another day, closing up 6-1/4 cents, closing at 4.93. Retail shelves are once again showing product, so some commercials may be easing up from previous weeks, however, it seems like wheat markets are getting more support from export news this week. Along with looking to cap exports from April-June, it was reported that Russia released 1 mmt of wheat from reserves to help ease their own increase of wheat prices on a domestic level. USDA Prospective Planting report said producers will plant 44.7 million acres of wheat in 2020, which was slightly lower than what was expected, but still a record low number if accurate. Stock numbers also came in lower at 1.412 billion bushels, down 1.593 billion bushels last year.
CATTLE HIGHLIGHTS:Cattle markets made an impressive late-session recovery today, posting triple digit gains after morning weakness. April lives closed 2.62 higher to 101.82, June lives were up the 3.00 limit to 92.07 and August lives were up 2.97 to 93.60. May feeders were up 2.00 to 122.90 and August feeders were up 1.97 to 128.90. Cash trade has been quiet so far this week, but even with the jump in April futures today, there is still a 20.00 discount between the cash market and futures going into delivery month. Choice beef values closed 1.87 lower yesterday afternoon to 250.97, a pullback of 6.35 in just five sessions. Choice cuts were down another 2.67 this morning to 248.30. Traders are still worried about the influx of fresh beef supplies during a time of significantly reduced demand. In addition, there is still a decent possibility that the spread of coronavirus could impact demand for slaughter supplies, thereby backing animals up in the country. The best-traded June live cattle contract made a very impressive close after a sluggish open. June made a nice push through the 10-day moving average resistance, potentially stemming downward momentum for the time being. May feeders made a bullish key reversal and punched through the 20-day moving average resistance level after a test of nearby support.
LEAN HOG HIGHLIGHTS: Hog markets made mixed to higher closes today, with April down 1.75 to 52.20, June was up 0.55 to 60.32 and July was up 1.65 to 64.72. The CME Lean Hog Index was down 0.90 to 65.56. The index made its first lower close today since March 3 and its largest single-day decline since February 11. Weights are increasing against the seasonal trend, and higher than normal production is overwhelming retail demand for pork products- grocery store space is mostly filled after the run on por over the past two weeks. Carcass cutout values closed 2.72 lower yesterday afternoon to 70.00 and closed 5.67 lower today to 65.04. This is a drop of over 18.00 in just six sessions. A large packing plant in Canada has closed for the next two weeks after nine employees tested positive for coronavirus. Fears of the same thing happening in the US are adding to concerns that animals will further back up in the country. The positive closes in deferred contracts was likely due to some short covering and technical correction from recent losses. June futures were able to hold their lower Bollinger band support level though are still oversold and the trend is still lower.
Top Farmer Closing Comments 3-25-20
CORN HIGHLIGHTS: Corn futures closed firmer for the second consecutive session in May and third in December. May gained 1-1/4 cents, closing at 3.48-1/2, while December closed 2 higher at 3.67-1/4. After yesterday’s reversal, today’s follow-through was encouraging. An agreement in congress lead to sharp gains in equities and helped to lift most all commodities higher. A small sale of corn was announced today with the destination of China. Strong gains in wheat were viewed as supportive. Despite crude oil trading in positive territory today and gaining nearly 4.00 since last week, we are still concerned the lower grind of corn for ethanol will outweigh the positive Chinese news. Basis levels continue to weaken. News from South America is mixed. Weather is suggesting small downgrades to Brazil and Argentina corn production. While this is supportive news, we are receiving mixed signals on whether or covid-19 will be a near term supportive factor.
SOYBEAN HIGHLIGHTS: May soybean futures closed mixed with front months May and July posting hook reversals after filling chart gaps earlier in the day. May posted a high of 8.97 before closing at 8.81-1/2, down 5-1/4 for the session. Its gap was filled at 8.88-1/2 left from March 6. New crop November closed 2-1/2 cents higher at 8.77-1/2, after reaching a high today of 8.85-1/2. Stable to firmer energy prices and an emergency relief passage agreement in Washington were supporting factors today. We also believe technical traders were moving out of long contracts, establishing short positions, or both when prices filled their gaps. South America weather and corona concerns are considered slightly positive for price. Because futures recovered enough to fill their gaps and then failed, we will recommend a cash sale today for old crop. We will also stay defensive new crop on concerns the near-term recovery in equities and energies could be short lived. Farmer selling will likely pick up after today.
WHEAT HIGHLIGHTS: Chicago May wheat closed up 18-1/4 at 5.80, with a high of 5.83-1/2. KC May wheat closed up 10-1/4 at 5.01 with a high of 5.05-3/4. Wheat markets gained support today as the coronavirus continues to cause countries across the globe to want to stock up on wheat products. However, issues in the EU are causing them to look elsewhere, such as the U.S. Global supplies are still record high, but the fact remains the U.S. supplies are still estimated at a seven-year low after last year’s crop, creating a bullish sentiment in Chicago wheat especially. Weather seems to be providing support for KC wheat especially, as the seven-day forecast for southwest Plains is calling to be optimal with temperatures potentially extending into the 90s. July wheat futures had a high of 5.71-1/2, which broke the previous high of 5.67 from February. Next target for sales will be 5.89, the high from January 22.
CATTLE HIGHLIGHTS: Cattle markets ended the day with mixed to mostly lower closes in very wide trading ranges. April lives were up 2.30 to 108.45, June lives were down 0.70 to 96.32 and August lives were up 1.07 to 97.17. April feeders were down 1.35 to 128.72, and May feeders were down 0.40 to 129.10. Choice beef prices made their first negative close in eight sessions yesterday, down 1.01 to 256.31. Choice beef was up 0.17 this morning to 256.48. While select beef prices have moved higher with the rally in choice, there is talk that the lower quality select cuts may see more demand if the economy stagnates coming out of the coronavirus crisis. Cash cattle trade in the country was reported today as high as 120. This is a sharp jump from last week’s trade at 105-112 and should be supportive especially once the calendar turns over to April. April is a delivery month for the live cattle, and we should see cash and futures make moves to converge by expiration. June live cattle opened higher this morning but quickly sold off to test limit-down prices. June was able to rally back above the 20-day moving average support level to limit losses. April feeders traded in a range of 9.32. Prices tested nearby support at the 20-day moving average and resistance at the 50-day moving average. Today’s settle was in the lower third of the day’s range.
LEAN HOG HIGHLIGHTS: Hog markets made moderately lower closes today, falling back with softer retail pork values. April hogs were down 0.57 to 65.85, June hogs were down 1.25 to 71.75 and July hogs were down 1.10 to 73.60. Carcass cutout values made their first lower close yesterday in 12 sessions, down 1.46 to 82.05. Pork values were down another 2.60 this morning to 79.45. The market is beginning to get the sense that the run on grocery stores may be over in the near term, and last week’s inventory building may have been overkill. Still, packer margins are very strong, which will help maintain demand for slaughter supplies. The CME Lean Hog index made its highest close today since October 25, up 0.80 to 63.98. Price action today was not impressive, even considering moderate losses. June hogs never traded above their opening prices and quickly fell below yesterday’s lows. June did test and hold nearby support at the 10-day moving average level, but prices also made a bearish key reversal.