Stewart-Peterson Market Commentary

Closing Commentary - April 23, 2019

Top Farmer Midday Update 4-23-19

Corn: Corn futures have fallen to new lows again, with May down 3-3/4 cents to 3.51, Jul corn is down 3-1/2 cents to 3.60, and new crop Dec corn is down 3 cents to 3.79-1/2. Weather forecasts look warmer in the southern parts of the Corn Belt while the northern regions are still projected to see colder-than-normal temperatures. GFS models are showing wetter-than-normal weather over the next two weeks which is not ideal for planting. Still, fund traders continue to hammer grain markets. The U.S. farmers can plant up to 35% or 40% of the corn crop in a week's time, so planting delays are just not enough to stabilize markets in mid to late April. Tightening Chinese corn stocks and lower planted acreage should continue to boost Chinese demand. China imported 420,000 tons of corn during the month of March which pushed year-to-date Chinese corn imports up 76.2% from last year's pace. All 2019 corn futures contracts are making new lows today and corn, on a front month view, is trading at its lowest value since September. Funds sold an estimated 12,000 contracts of corn yesterday and are thought to be net short about 324,000 contracts.

Soybeans: Soybean markets are sharply lower this morning, with May down 8 cents to 8.69, Jul down 8-1/4 cents to 8.82-1/2, and new crop Nov soybeans are down 7-1/4 cents to 9.02-1/2. The U.S. dollar index is at its highest level since June 2017 as speculative fund traders continue to sell grains. The market is oversold technically, but yesterday's outside session lower along with bearish supply and demand fundamentals are still pointing lower. Chinese soybean imports during the month of March were reported at just under 5 million metric tonnes, pulling year-to-date imports down 14.4% from last year. China has also begun to shift some soybean demand to South America over the past week. New crop Nov soybeans are trading at their lowest levels since November 1 after yesterday's lowest close since October 31. Funds sold an estimated 4,000 contracts of soybeans yesterday and are thought to be net short about 99,000 contracts.

Wheat: Wheat markets are higher this morning in some short covering activity, with Jul Chi wheat up 2-3/4 cents to 4.44-1/2, Jul KC wheat is up 1 cent to 4.19-1/4, and Jul Mpls wheat is up 1-1/4 cents to 5.19-1/4. Crop conditions yesterday pegged 62% of the winter wheat crop at good to excellent vs 60% a week ago and 31% a year ago. Spring wheat plantings were 5% complete vs 2% a week ago, 3% a year ago, and 22% on average. Export inspections are running well behind USDA expectations, partly due to the rallying U.S. dollar index at its highest levels since June 2017. Jul KC wheat made new lows yet again today but is currently trading near the upper end of the day's range and in slightly positive territory. Spring wheat futures held yesterday's lows though have fallen sharply off of the session's highs. Speculative funds sold an estimated 5,000 contracts of wheat in Chi yesterday and are thought to be net short about 68,000 contracts.

Cattle: Cattle markets are slightly higher today after stabilizing yesterday afternoon above support levels into the close. Apr lives are up 20 cents to 128.70, Jun lives are up 42 cents to 122.00, and Aug lives are up 15 cents to 118.92. May feeders are down 32 cents to 150.47 and Aug feeders are up 42 cents to 160.05. Retail beef values are still providing major support, and yesterday's Cold Storage report showed lighter than normal beef stocks. This is also indicative of strong consumer demand. Jun live cattle tested their 10-day moving average support level today but are now trading just off of the day's highs. Feeder markets, while still choppy, are still within their recent trading ranges.

Hogs: Hog markets are taking losses again today, with Jun down 1.15 to 92.62, Jul down 1.52 to 96.45, and Aug is down 1.65 to 97.92. The best traded Jun contract closed near its lows yesterday afternoon and gapped lower on the open today. Buyers have since limited early session losses, but neither the gap below the market, made between April 2 and 3, nor the gap between today's session and yesterday's session have been closed. Yesterday's Cold Storage report showed pork stocks lower for the month, but the drops were not quite as large as usual. Both the Jun and Jul contracts are trading at their lowest levels in nearly two weeks.

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