Top Farmer Midday Update 5-20-19

Corn: Corn futures are trading 5-1/4 cents higher this morning, with Jul at 3.88-1/2, Dec at 3.95-3/4, and Dec at 4.03-1/2. Rain this weekend kept planting activities at a minimum in many areas, and this afternoon's Crop Progress report will probably not show more than a 20% advancement in planting progress. 7-day models are showing 1-1/2 to 5 inches for parts of KS< MO, NE, IA, MN, WI, ND, SD, and northern IL. 8 to 14 day forecasts are showing above normal precipitation as well. Jul corn gapped higher on the overnight session by a penny, and Dec corn futures never traded lower than Friday's close. Dec futures reached 4.05 this morning, their highest price since January 18. Corn prices may be slightly overbought in the short term, but fundamentals may still be pointing higher. The U.S. shipped just over 1 mil tons of corn for the week ending May 9 vs 977,000 tons the previous week and 1.6 mil tons this same week last year. Shipments are running nearly 2 mil tons ahead of last year's pace. Funds bought 25,000 contracts of corn on Friday and are thought to be net short about 210,000 contracts.

Soybeans: Soybean futures are showing double digit gains in early trade today. Jul beans are up 11-3/4 cents to 8.33-1/2, Sep beans are up 11-1/2 cents to 8.46-1/4, and new crop Nov soybeans are up 11-1/4 to 8.58-1/2. Much of the support today is due to the recent rally in Brazilian soybean prices. China purchased huge quantities of soybeans in Brazil last week pushing Brazilian export prices to a 25.00 premium to the U.S. export prices. The flurry of Chinese purchases from Brazil has been a negative consequence of the U.S./China trade negotiations dragging on much longer than initially expected. Many are worries that the U.S. could permanently lose some soybean export demand due to breakdown in relations. Soybean prices have again rallied up to, but not broken through, their 20-day moving average resistance levels. This is the fourth session in a row. The U.S. shipped 513,000 tons of beans for the week ending May 9 vs 603,000 tons the previous week, and 699,000 this same week last year. Cumulative shipments are running over 12 mil tons behind last year's pace. Funds sold about 9,000 contracts of beans on Friday and are thought to be net short about 168,000 contracts.

Wheat: Wheat markets are sharply higher this morning with Jul Chi wheat up 12-3/4 to 4.77-3/4, Jul KC wheat is up 14-1/2 to 4.34-3/4, and Jul spring wheat is up 9-3/4 to 5.37-1/2. Excessive rain totals will continue to impact different wheat varieties. Continued rains in the Dakota's and Minnesota will slow spring wheat planting and 5 to 8 inches of rain in TX, OK, and KS in the coming days will threaten quality and yield for the hard red winter wheat crop. Jul Chi futures have nearly reached their 100-day moving average resistance level, a moving average not tested since January and not closed above since August of last year. Jul KC wheat futures are trading above their 50-day moving average for the first time since February. The U.S. shipped about 842,000 tons of wheat the week ending May 9 vs 537,000 tons the previous week, and 467,000 tons this same week last year. Wheat shipments are running about 82,000 tons ahead of last year's pace. Funds sold about 1,000 contracts of wheat in Chi on Friday and are thought to be net short about 70,000 contracts.

Cattle: Cattle markets are mixed this morning, with Jun lives up 35 cents to 111.62, Aug lives up 2 cents to 108.95, and Oct lives up 2 cents to 108.92. May feeders are down 22 cents to 134.30, Aug feeders are down 1.00 to 144.50, and Sep feeders are down 95 cents to 145.75. Live cattle futures are so far trading within Friday's range and still above the 10-day moving average support level. Live cattle futures have not closed above their 10-day moving average levels for two sessions in a row since mid-April. Aug feeders are still holding their 10-day moving average as well. News on Friday that Japan is lifting restrictions on U.S. beef imports should be supportive going forward, and Friday's consumer confidence rating was the highest since 2004, which is a good indicator of beef demand. Still, cash trade last week was 3.00 to 5.00 lower than the previous week which may keep a lid on large rallies anytime soon.

Hogs: Hog markets are slightly lower in early and choppy trade today. Jun hogs are down 95 cents to 91.42, Jul hogs down 47 cents to 92.52, and Aug hogs are steady at 93.95. The U.S. lifted steel and aluminum tariffs on Mexico and Canada last week which may get the ball rolling again for USMCA ratification. Still, we have yet to hear that Mexican tariffs on U.S. pork products have come down. Trade today has been relatively uneventful as the best traded Jun contract briefly breaking through Friday's highs, but have since fallen back lower, just below the 50-day moving average support level. Most cash fundamentals have been relatively mixed recently keeping price direction higher, but only moderately so.

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