Top Farmer Midday Update 5-16-19
Stewart-peterson Commentary - SPC - Thu May 16, 11:07AM CDT

Corn: Corn futures are trading moderately higher today, testing through resistance levels from yesterday. Jul corn is up 6-3/4 to 3.76-1/4, Sep corn is up 6-1/2 to 3.84-3/4, and new crop Dec corn is up 5-1/2 to 3.94-1/4. Rain is falling again today in many areas, slowing planting activities. Rain is seen this weekend into next week, exacerbating fears of lost acres or lost yield potential. With planting said to be 30% complete by last Sunday, many are already feeling that planting progress at 50% on next Monday's Crop Progress report could be a stretch. Dec corn is currently trading just above its 100-day moving average level. Prices tested their overhead 200-day moving average yesterday but were unable to break through. A close above the 100 or 200-day moving average level would be the first since March 26 and likely trigger more short covering. Funds bought about 18,000 contracts of corn yesterday and are thought to be net short about 256,000 contracts.

Soybeans: Soybean futures are only slightly higher, with Jul up 2 cents to 8.37-1/2, Aug up 2-1/4 cents to 8.44-1/4, and new crop Nov soybeans are up 2-1/2 to 8.62-1/4. Prices rallied this morning, testing their 20-day moving average resistance again and have since fallen off. At this point, corn planting delays could encourage more soybean acres, especially with the rally this week making bean prices more attractive. This, plus last Friday's bearish Supply and Demand report does not set soybeans up for a rally led by fundamentals, at least at this time. At this point, it appears that soybeans have followed corn higher mostly due to short covering. During Wednesday's session, funds bought back 5,000 contracts of beans and are thought to be net short about 160,000 contracts.

Wheat: Wheat markets are finding more buyers again today, with Jul Chi wheat up 12 cents to 4.60-3/4, Jul KC wheat is up 11-1/4 cents to 4.13-1/4, and Jul spring wheat is up 8-3/4 cents to 5.24. Jul Chi wheat is trading near the highs from yesterday but has still yet to attract much short covering. Jul KC wheat is trading above its 20-day moving average level for the third session in a row. Jul KC wheat closed above that level on Tuesday but failed to post a close above it yesterday. With excessive rains on tap for this weekend and later next week, there is growing concerns about damage and disease, especially considering that the wheat crop is so far behind in maturity. During yesterday's session, funds were net even in Chi wheat and are thought to be net short about 78,000 contracts. The open interest on the recent balance is encouraging as it suggests more bounce could be on the table if funds want out of short positions.

Cattle: Cattle markets are mixed this morning, with Jun lives down 5 cents to 109.62, Aug lives are up 25 cents to 107.22, and Oct lives are up 20 cents to 106.95. The Jun live cattle contract is extending the recent downtrend while the deferred live cattle contracts are in more of a consolidation phase. Most of the feeder cattle contracts have broken below recent lows. Cash trade so far this week has been $1 to $3 below the previous week and beef values keep sliding. This will keep production running at a good clip and will make it difficult for futures to rally. Technicals are still oversold and funds may be waiting to liquidate some more of their length.

Hogs: Hog markets are slightly lower early this session, with Jun down 50 cents to 91.32, Jul is down 37 cents to 91.55, and Aug hogs are down 7 cents to 92.55. Trading ranges today have been relatively tight and trade relatively uneventful. The best traded Jun contract fell lower early in the session to test its 10, 20, and 50-day moving average support levels but has since rallied back above. Jul futures showed similar price action, falling below their 10-day moving average support but have since climbed back above. Trade headlines are relatively quiet today and carcass values have been choppy keeping price direction mixed. Futures have bounced out of their recent oversold levels and could attract buyers on positive trade developments.

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