Top Farmer Closing Comments 1-28-19
Stewart-Peterson Commentary - SPC - Mon Jan 28, 3:15PM CST

CORN HIGHLIGHTS: Corn markets closed just narrowly lower today, with Mar and May corn down 1/2 cent to 3.79-3/4 and 3.88-1/4 respectively, while Jul was down just 1/4 cent to 3.96-1/4. Dec corn closed at 4.03. Crude oil and soybeans were both lower today, providing some outside market resistance. Weekly U.S. corn export inspections totaled near 35 million bushels versus 39 million bushels the same week last year. This leaves season-to-date exports around 846 million bushels versus 543 million last year. Still, export inspections are running 6.7% ahead of the average pace. This Thursday will bring the first Export Sales report since mid-December, with many traders anticipating bullish data. Technically, today was relatively quiet. The three nearby corn futures sold off at the beginning of the session to test some nearby moving average support levels, but ultimately held and were able to post decent closes relative to their day's trading range. Funds sold about 3,000 contracts midway through today's session, keeping corn in a holding pattern until U.S./China trade talks later this week.

SOYBEAN HIGHLIGHTS: Soybean futures closed slightly lower today, with Mar, May, and Jul all down 2 cents to 9.23-1/4, 9.37, and 9.49-3/4 respectively. Some early pressure this morning was noted due to potentially changing Brazilian and Argentina forecasts. Over the next 6-10 days, the dry areas of Brazil could see some much-needed rains while the wet areas of Argentina may begin to dry out. While improving weather will not be adding bushels, the crop stabilization is not positive either. At this point, most do not believe that production declines in Brazil and Argentina will be enough to significantly impact the world balance sheet. Weekly U.S. soybean inspections today were seen at 34 million bushels versus 41 million bushels for the same week last year. Season-to-date exports are about 750 million bushels versus 1.227 billion bushels last year. We have currently shipped about 39.6% of the current USDA estimate versus 64% on average for this time of year. While beans did close lower on the day, the price action is really not that negative looking. Mar, May, and Jul futures all closed above their 200-day moving average level for the second-consecutive session. Not one of those contracts has been able to make two-consecutive closes above that moving average level since the beginning of June. The 200-day moving average was a major resistance level, and two closes above should open up some topside if market perception can stay positive.

WHEAT HIGHLIGHTS: Wheat markets moved moderately lower today in choppy trade. The nearby Mar Chi contract closed 1-1/4 cents lower to 5.18-3/4, Mar KC wheat closed 2-3/4 cents lower to 5.06-3/4, and Mar Mpls wheat closed 3/4 cent lower to 5.74. Many of the fears about winter kill this week may be alleviated due to plentiful of snow coverage. Export developments out of Russia remain positive. The Russian ruble is trading at a two-month high versus the U.S. dollar. Russia's Ag Minister is now requiring ports to submit weekly reports on grain-handling operations to monitor export flow, and there is still talk that grain truckers in southern Russia may strike soon due to complaints of overloading trucks to cut costs. Next Friday, the USDA will release its 2019 winter wheat seedings report which is expected to show planting at a record low. Mar Chi wheat is still trapped between its 100-day moving average resistance level and its 10, 20, and 50-day moving average support levels. Mar KC wheat held its 10-day moving average support level and the Mar Mpls wheat contract did as well.

CATTLE HIGHLIGHTS: Cattle markets closed moderately higher today, finding buyer support on stressful weather in store for the rest of the week. The nearby Feb live cattle contract closed 35 cents higher to 126.40, Apr closed 52 cents higher to 127.37, and Jun closed 30 cents higher to 117.00. Jan feeders were up a dime to 143.47, Mar feeders were up 72 cents to 144.35, and Apr feeders were up 87 cents to 145.60. Choice beef values closed 74 cents lower on Friday afternoon to 217.01 and were up 59 cents this morning to 217.60. Beef values should have the opportunity to continue their move higher this week, with East Coast demand expected to remain strong. Extremely cold temperatures in the Plains this week will be stressful for cattle in feed lots which will keep futures prices supported. Cash cattle traded last week as high as $123, $1 lower than the previous week. Cold temperatures this week could slow the marketing pace and rally cash values. Technically, price action today was strong, though not necessarily groundbreaking. Feb live cattle closed above their 10-day moving average for the first time since January 18. Apr cattle closed steady with January 18 close and Jun closed steady with last Thursday's prices. Both the Apr and Jun contracts are now back above their 10 and 20-day moving average levels.

LEAN HOG HIGHLIGHTS: Hog markets put in mixed to mostly lower closes today, unable to find substantial speculative buying without much new information at this point. Feb hogs were down 40 cents to 57.97, Apr hogs were up 20 cents to 62.32, and Jun hogs were down 42 cents to 76.72. The CME Lean Hog Index was steady today at 58.50 and extremely cold temperatures should help slow the marketing pace and support cash values. Because slaughter has been running at such a speedy pace over the past few weeks, weight gain on slower marketings should not be too much of an issue. Carcass cutout values were up 40 cents on Friday afternoon to 67.67 and were up another 1.98 this morning to 69.65. All primal cuts were higher at midday, with butts up 2.90 to 73.45, picnics up 1.54 to 39.79, hams up 2,90 to 50.24, and bellies up 2.26 to 121.48. There should be plenty of new information regarding China trade this week. Thursday's Export Sales report will be first in weeks and could show sizeable sales of U.S. pork to China. In addition, trade talks between the U.S. and China are restarting on Wednesday and Thursday, possibly opening the door for further purchases. Given the oversold futures prices, and mixed to positive fundamentals, downside in the near term looks limited for the hog markets. Much of the speculative stagnant length has likely been flushed out at this point keeping selling interest somewhat limited.




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