Top Farmer Midday Commentary 5-17-19

Corn: Corn futures are moderately higher early this morning, trading above resistance that has proven staunch through Wednesday and Thursday's sessions. Jul corn is up 3-3/4 cents to 3.82-3/4, Sep corn is up 3-1/2 to 3.90-1/2, and new crop Dec corn is up 2-3/4 to 3.99-1/4. Planting progress looks likely to come to a halt this weekend as many of the major corn growing states could receive between 3 to 5 inches of rain. Both the 6 to 10 and 8 to 14 day forecasts are also showing above normal precipitation. Many are expecting corn plantings to be 50% complete by Sunday, which would be nearly 35% behind the average pace. Today's session has been fairly quiet compared to previous days this week, but no less technically impressive. Dec corn never traded below yesterday's close, and even touched 4.00 overnight for the first time since March 26. Prices may be slightly overbought in the short term, but fundamentals are providing more than enough justification at this point. Funds bought back about 30,000 contracts of corn and are thought to be net short around 226,000 contracts.

Soybeans: Soybean futures are trading moderately lower today after testing and failing overhead resistance for the third day in a row. Jul beans are down 9-1/4 cents to 8.30-1/2, Aug beans are down 9-1/4 cents to 8.37-1/4, and new crop Nov soybeans are down 9-1/4 cents to 8.55-1/2. With a very heavy supply side of the balance sheet and the real potential for increased soybean acres this year due to late corn plantings, most fundamental indicators are not friendly at this point. U.S./China trade relations are still very shaky at best, and China's global soybean demand is decreasing quickly anyway due to the spread of ASF. Price charts do not look friendly either, with all 2019 contracts testing and failing to break through their 20-day moving average support levels for three sessions in a row. Soybeans appear to have caught some short covering bounce from the corn market, but the upward momentum may be waning. Funds bought 5,000 contracts of beans yesterday and are thought to be net short about 155,000 contracts.
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Wheat: Wheat markets are moderately higher again today, with Jul Chi wheat up 3 cents to 4.70, Jul KC wheat is up 4-1/2 cents to 4.21-1/4, and Jul spring wheat is up 5-1/4 to 5.32. Excess precipitation recently, and in extended forecast, continues to create concern for crop conditions. The wheat crop is much further behind in maturity than is usual, increasing its risk for disease and other problems. Chi wheat futures surged through their 50-day moving average levels yesterday, closing above them for the first time since early February. KC wheat futures are testing their 20-day moving average levels today. Spring wheat contracts briefly traded above theirs today for the first time since late March, but has since fallen back below. Funds bought an estimated 10,000 contracts of Chi wheat yesterday and are thought to be net short about 68,000 contracts.

Cattle: Cattle futures are higher this morning, with Jun lives up 62 cents to 111.10, Aug lives are up 77 cents to 108.72, and Oct lives are up 92 cents to 108.82. May feeders are up 25 cents to 134.47, and Aug feeders are up 1.70 to 145.02. Live cattle contracts opened up above their 10-day moving average resistance levels today, and a close above would be the first since the markets turned lower late last month. Cash trade yesterday was 3.00 to 5.00 lower than last week, and beef values continue to slide. The best traded Aug feeder cattle contract is also trading above its 10-day moving average resistance level for the first time in a week, and a close above would be the first since April 23. Live and feeder cattle futures are still oversold and may be finding some technical bounce.

Hogs: Hog markets are mixed in very quiet trade so far today. Jun hogs are down 20 cents to 92.02, Jul hogs are down 2 cents to 92.37, and Aug hog are up 32 cents to 93.62. The CME lean hog index has been building strength recently, along with the carcass cutout values. Reports surfaced earlier this morning that the U.S. may be lifting steel and aluminum tariffs on Canada and Mexico which could clear the way for U.S. MCA ratification. This could give pork exports to Mexico a jolt of energy. Still, some of the buying on these reports could be limited by China's cancelation of U.S. pork purchases from earlier this week.




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