Top Farmer Closing Commentary 11-18-19

CORN HIGHLIGHTS: Corn futures picked up where they left off at the end of last week finishing with losses today of 2-1/2 to 3-3/4 cents as Jul led today’s drop closing at 3.88-3/4. Nearby Dec closing at 3.67-3/4, down 3-1/2, closed at its lowest level since September 17, while Dec 2020 closed 2-1/4 lower at 3.93-1/2, a new contract low. Dec 2020 corn has now lost near 18 cents since mid-October. Improving basis, a slow pace for the remaining crop that needs to be harvested due to high moisture levels, and thoughts of being oversold may provide underlying support, but the overriding factor is that fund selling continues to merge and export business remains slow. Export inspections at 25 mil bu continue to reflect a slow sales pace as the market needs to see 40 mil bu on a weekly pace to meet the current USDA estimate of 1.850 bil bu expected to be sold in the 2019/20 marketing year. Disappointingly, the dollar which has traded lower for three consecutive sessions had failed to initiate and support for corn prices. Wheat prices moved higher today, and there too no spillover into the corn market. Coming into today, funds were estimated to be short 131,000 contracts of corn and likely added to that position.

SOYBEAN HIGHLIGHTS: The technical picture for beans continues to look weak with losses today of 6-1/2 to 8 cents as nearby Jan led today’s drop closing underneath the 100-day moving average for the first time since September 27. The head-and-shoulders formation that points to lower prices continues to loom larger as the market appears to be attempting to break to teh bottom side after a positive close on Thursday and Friday. Our calculations indicate the head-and-shoulders objective is 8.90 on Mar with today’s close at 9.10-1/4. Favorable conditions in South America and a lack of export news and continued concerns whether or not phase one of the deal with China will actually take place kept prices skittish. It is expected that 70% of the Brazilian bean crop is planted, and with the Brazilian real continuing to soften, there is concern the U.S. could miss out on export activity, especially if crop conditions continue to show improved potential.

WHEAT HIGHLIGHTS: Wheat futures finished mixed with Chi gaining 3-1/4 to 4-3/4 as Mar led today’s gains closing at 5.10-3/4. KC closed unchanged to 1-1/2 higher in Dec closing at 4.18-1/2, while Dec Mpls lost 1/2 closing at 5.03-1/4. Dec Chi wheat found support at the 100-day moving average posting a larger trading range than yesterday and finishing higher. A reversal was also noted in the Dec KC, however, Mpls finished at a level where there was not much technical support, especially finishing in the lower 1/3 of today’s trading range. A weaker U.S. dollar for the third consecutive session provided underlying support, as did export inspections at 16.5 mil. While this figure was still below the 18.2 mil needed on a weekly basis, it should be nonetheless viewed as supportive indicating wheat is being shipped. Year to date inspections are up over 20%.

CATTLE HIGHLIGHTS: The cattle market began the week off on a mixed to mostly higher note with Dec lives down 40 cents to 118.70, Feb lives were up 12 cents to 125.10, and Apr lives were up 32 cents to 126.40. Nov feeders were up 12 cents to 146.37, and Jan feeders were up 20 cents to 144.47. Cash cattle were trading with weekly gains of as much as 1.50 last Thursday afternoon, but those gains softened by Friday afternoon. Choice beef values closed 26 cents higher on Friday afternoon to 240.80 and were down another 1.81 this morning to 238.99. Slaughter last week was up 1.4%, and given the heavy weights lately, this meant production was heavy. Last week’s export sales total was the largest weekly total since April 11th and the second largest all year. Today’s price action was very quiet, though was mostly positive. Dec lives tested, but were unable to close above their 10-day moving average resistance level. Feb lives made a bullish outside day and Apr continued their rally after last week’s correction. Jan feeders held their 20-day moving average level, but could not close in the top half of the day’s range after an unsuccessful test of the 10-day moving average resistance level.

LEAN HOG HIGHLIGHTS: Hog markets put in a negative start to the week, with Dec down 45 cents to 62.75, Feb hogs were down 1.77 to 70.22, and Apr hogs were down 2.62 to 76.35. The CME lean index is up a penny to 59.51. The CME index has been within a range of less than 2.00 for nearly two weeks. China’s national average spot pig price was down 5.8% overnight and now down 18% for the month, but still up 142.8% year to date. The sharp slide lately in China pig values is likely a cause for much of the pressure lately. Carcass cutout values were up 1.09 Friday afternoon to 88.13 and were up another 1.88 this morning to 90.01. Slaughter last week was seen at 2.749 mil head, a new weekly record. Given near record hog weights, pork supplies are surging despite a solid week of export sales. Dec hogs put in a bearish outside day, making their lowest close since September 11th. Feb and Apr futures also made their lowest closes since September 11th though prices moved further below recent trading ranges instead of extending them lower as did Dec.




Market Commentary provided by:

Stewart-Peterson
137 South Main Street, West Bend, WI 53095
Phone: 800-334-9779
E-mail: rmainville@stewart-peterson.com
Web: www.stewart-peterson.com