Stewart-Peterson Market Commentary

Closing Commentary - February 20, 2019

Top Farmer Midday Update 2-20-19

Corn: Corn futures down very slightly this morning, with Mar, May, and Jul all down 3/4 cent to 3.69, 3.77-1/4, and 3.85-1/4 respectively. New crop Dec corn is steady at 3.96-3/4. President Trump made comments yesterday afternoon indicating that U.S./China negotiations were going well so far this week, also alluding to China purchases of U.S. corn as a major part of the ongoing trade discussions. South American weather will be beneficial for second crop corn planting over the next two weeks, keeping some pressure on the corn prices. However, most of today's selling action has been spillover selling from the rest of the grain complex. Dec corn futures tested and failed to break through their 10-day moving average again today. Jul corn futures have matched yesterday's low but have not broken through it. Funds sold 20,000 contracts of corn yesterday and are thought to be short about 37,000 contracts.

Soybeans: Soybean futures are lower again in early trade this morning. Mar beans are down 6-3/4 cents to 8.94, May beans are down 7 cents to 9.07-1/2, and Jul beans are down 7 cents to 9.21. Nov beans are down 6-3/4 cents to 9.39. Yesterday's negative technical closes below the 100-day moving average levels in the nearby contracts made beans an easy sale this morning. The Nov contract held its 100-day moving average support yesterday but has pushed through it so far this morning. Today's negativity is somewhat disappointing after Chinese officials reaffirmed intentions to import more U.S. beans. Given estimates for soybean plantings this year though, the balance sheet can get very heavy very easily, and that may start to weigh on markets more. Funds sold 8,000 contracts of beans yesterday and are thought to be short about 2,000 contracts.

Wheat: Wheat markets are sharply lower again this morning. May Chi wheat is down 11-1/2 cents to 4.80-3/4, May KC wheat is down 9-3/4 cents to 4.58-1/2, and May Mpls wheat is down 5-1/4 cents to 5.50. Winter wheat contracts have made new lows multiple times on this recent selloff, and now, May spring wheat has done the same. Previously, the May spring wheat futures contract traded at a low of 5.50-1/2 on December 27, and today, May spring wheat has traded as low as 5.48-3/4. Funds sold about 11,000 contracts of wheat in Chi yesterday and are thought to be short about 35,000 contracts.

Cattle: Cattle futures are mixed this morning, lives higher and feeders mostly lower. Feb lives are up 27 cents to 128.15, Apr lives are up 37 cents to 128.82, and Jun lives are up 32 cents to 118.92. Mar feeders are steady at 143.75 and Apr feeders are down 2 cents to 145.97. Cold and snowy feed lot conditions this week continue to be supportive. It seems that just when the weather is forecast to take a turn for the better, more snow and more cold shows up to keep the cattle stressed. The Apr live cattle contract took out yesterday's highs by a nickel while the Jun contract has missed yesterday's highs by a nickel. Price action has been relatively quiet, especially with the volatility in other markets so far today. With beef values hanging strong, the cash outlook for this week looks to have remained at least steady.

Hogs: Hog markets are sharply lower today, but already off of the day's lows. Apr hogs are down 2.02 to 54.50, Jun hogs are down 5 cents to 73.67, and Jul hogs are down 47 cents to 76.55. Apr hogs traded as low today as 52.25, a loss on the session of over 4.00. Fast production pace, cheap pork values, and an enormous amount of uncertainty with foreign demand for U.S. pork are keeping traders on their toes and price action wild. Yesterday, carcass cutout values hit their lowest level since late November 2009. At some point, low pork values should be able to clear some of the excess domestic supplies, but it does not appear we are quite there yet.




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