Stewart-Peterson Market Commentary

Closing Commentary - August 19, 2019

Top Farmer Midday Update 8-19-19

CORN: Corn futures are moderately lower in early trade today, unable to follow through on Friday's surge so far. Sep corn is down 5-1/4 to 3.65-3/4, Dec corn is down 5 to 3.75-3/4, and Mar corn is down 4-1/4 to 3.88-1/2. The market seems to have shrugged off DTN Grow Intelligence Digital Crop Tour national yield estimate of 163.2 bu per acre. This is 6.3 bu an acre lower than the current USDA estimate, but widespread rains in IL and IN over the weekend are acting as a wet rag this morning. Dec corn traded within Friday's range so far today. Momentum indicators are oversold, but are pointing sideways. The U.S. shipped 703,000 tons of corn last week vs 646,000 tons last week, and 1.27 mil tons the same week last year. Cumulative shipments are running about 8 mil tons behind last year's pace. Speculative funds bought about 12,000 contracts of corn on Friday.

SOYBEANS: Soybean markets are lower in early trade with Sep beans down 7 cents to 8.60-1/4, Nov beans are down 6-3/4 to 8.73, and Jan beans are down 6-1/2 to 8.87. DTN grow intelligence pegged the U.S. national soybean yield at 44.2 bu per acre on Friday afternoon. The USDA is currently at 48.5 bu per acre, and given current demand, DTN's yield would drop ending stocks from the USDA's estimate of 755 mil bu to 326 mil bu. Still, rains over the weekend and non-threatening forecasts are keeping buyers on the sidelines. Nov beans traded up to their 10-day moving average this morning at 8.77-3/4, but were met with sellers and prices pushed back to their recent consolidation lows around 8.70. Momentum indicators are pointing mostly sideways. The U.S. shipped about 944,000 tons of beans last week vs 1.03 mil tons the previous week and 582,000 tons the same week last year. Cumulative shipments are running about 11 mil tons behind last year's pace. Speculative funds were thought to have bought about 4,000 contracts of soybeans on Friday.

WHEAT: Wheat markets are slightly lower in early trade today, with Sep Chi wheat down 2 cents to 4.68-3/4, Sep KC wheat is down 3-3/4 to 3.90-1/2, and Sep spring wheat is down a penny to 5.05-1/4. Much of the selling action today is in sympathy with the other grain markets, though foreign wheat futures continue to sink. The USDA's Canadian division pegged Canadian wheat production at 32.6 mmt vs the official USDA estimate at 31.8 mmt. The U.S. dollar is continuing its uptrend today keeping wheat traders on the defensive. Sep Chi wheat traded at its lowest level this morning since May 16 as the downtrend continues. Sep KC wheat and Sep spring wheat are both trading near the lows of the day. The U.S. shipped 689,000 tons of wheat last week vs 416,000 tons of wheat the previous week and 487,000 tons the same week last year. Cumulative shipments for the marketing year are running about 1.1 mil tons ahead of last year's pace.

CATTLE: Cattle markets are higher this morning as prices attempt to stabilize near the recent lows. Aug lives are up 1.32 to 101.25, Oct lives are up 1.50 to 99.55, and Dec lives are up 1.32 to 104.85. Aug feed3ers are up 1.77 to 136.35, and Sep feeders are up 1.67 to 134.05. Beef values are at their highest priced levels in over two years, while the cash markets have fallen sharply. Beef production last week was actually higher than the week before the Tyson plant in KS burned down, so it is clear other packers can make up the difference. This should keep cash trade supported and cattle relatively current. Oct lives traded as high as 99.92 this morning, though the gap from 100.92 to 103.75, and the other gap from 103.75 to 106.42 are still open. Sep feeders again tested their 10-day moving average resistance level, but have fallen lower since.

HOGS: Hog markets are higher this morning as prices hold near recent lows. Oct hogs are up 1.62 to 63.62, Dec hogs are up 1.30 to 62.07, and Feb hogs are up 72 cents to 68.75. China's spot pig prices continue to rally, while U.S. hog and pork prices slip due to oversupply., the market is concerned about high inventory since the fall, but China should begin to import bigger quantities of pork soon. Oct hogs have traded inside of Friday's range so far. The 10-day moving average 65.50 is the next point of resistance while the low was made on August 5 at 61.50 is the next level of support.

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