Top Farmer Closing Commentary 11-14-19
Stewart-peterson Commentary - SPC - Thu Nov 14, 4:06PM CST

CORN HIGHLIGHTS: Corn futures closed slightly higher today, with Dec up 1/2 cent to 3.75-3/4. Mar was up 3/4 cent to 3.84-3/4, and May was up 1 cent to 3.90-3/4. With talk of heavy cattle placements in October and November, as well as near record hog weights in the U.S. lately, some demand concerns have been alleviated. However, many are still expecting more demand reductions of 50 million bushels due to lower exports in future reports, quickly outweighing any increase in feed usage in the U.S. A trade group today estimated U.S. 2020 corn acreage near 94.4 million, versus 89.9 million this year. Assuming a yield near 178 bushels/acre, corn carryout could increase to greater than 2.7 billion bushels. Dec corn traded in a very tight range today of just 3 cents. Mar corn was within a range of 2-3/4 cents, and both months are still oversold.

SOYBEAN HIGHLIGHTS: Soybean futures posted mixed to mostly higher closes today, with Nov going off the board 2-1/4 cents lower at 9.00-1/4. Jan closed 1-1/2 higher to 9.16-3/4, and Mar closed 1 cent higher to 9.29-1/2. Buying support may have been a little lighter than otherwise expected today after the Wall Street Journal reported overnight that the U.S. and China trade negotiations have hit a bit of a roadblock. China appears unwilling at this point to commit to a certain dollar amount of U.S. ag purchases, contrary to what U.S. negotiators are pushing for. This is seen as delaying the ultimate signing of the document, as hopes for the deal get pushed later and later. Despite the slow down in negotiations, China did make a purchase today of 129,000 tons of U.S. soybeans. Some groups are still calling for lower U.S. soybean exports in future reports and are also calling for an increase in acreage next year of nearly 10 million. The best-traded Jan contract traded below its 100-day moving average support level today for the first time since September 30. However, buyers quickly jumped in and pushed Jan bean prices higher, albeit moderately so. The Jan contract closed just 3/4 cent off of the day’s highs. Mar beans back tested their 100 and 200-day moving average levels and closed above both. Both contracts are still oversold despite the stabilization today.

WHEAT HIGHLIGHTS: Wheat markets were soft again today, with Sep Chi down 1-1/4 to 5.07-3/4. Dec KC was down 2-1/2 to 4.22-1/4, and Dec spring wheat was down 2-1/2 cents to 5.12-3/4. This week’s buy the rumor and sell the news action was somewhat disappointing, as winter wheat conditions may be a problem moving forward, given current weather forecasts. Rain is seen for the western Plains, which could stabilize KC wheat conditions. Egypt is tendering for wheat today for Jan shipment, and offers are seen mostly steady with last week. Russian production estimates have begun to creep higher. Dec Chi wheat tested its 10-day moving average resistance level but was unable to break through it and closed near the low end of its recent consolidation range. Dec KC wheat fell back below its 10 and 20-day moving average support levels after two consecutive sessions above them. Dec spring wheat made new lows for the recent downtrend, trading at its lowest value since September 19.

CATTLE HIGHLIGHTS: Cattle markets put in a decent bounce today after yesterday’s weakness, with Dec lives up 97 cents to 119.07. Feb lives were up 82 cents to 124.92, and Apr lives were up 42 cents to 126.10. Nov feeders were up 1.05 to 146.62, and Jan feeders were up 1.22 to 144.05. Choice beef values closed 1.84 higher yesterday afternoon to 242.34, the highest choice value since June 22. Choice cuts were down 13 cents this morning to 242.21. A few dressed cattle were sold in Nebraska today at 182, though live trade so far has been quiet. Traders are beginning to worry about rising average weights, as well as talk of heavy placements in October and November. The best-traded Dec live cattle contract made an inside session today and was unable to break through its nearby 10-day moving average resistance level. Dec cattle have now been able to make a run at new highs in ten sessions, and given the extreme overbought condition and divergence in momentum indicators, it appears the trend may be turning lower. Jan feeders jumped back above their 20-day moving average resistance level today but have corrected from overbought levels.

LEAN HOG HIGHLIGHTS: Hog markets posted moderate losses today, with Dec down 37 cents to 62.75. Feb was down 1.17 to 73. 37, and Apr was down 1.45 to 80.30. The CME lean hog index was up 61 cents to 59.55, continuing its choppy trade. Carcass cutout values closed 1.51 lower yesterday afternoon to 87.02 and were off another 66 cents this morning to 86.36. There was some instability today due to uncertainties regarding U.S. / China trade negotiations. Reports overnight indicated that the phase 1 negotiations have hit a snag with China unwilling to commit to a certain dollar amount of U.S. ag purchases for the deal. China’s spot pig prices were down 1% overnight and are now down 10.1% for the week. The Dec contract is still holding a sharp premium to the cash index, which will limit gains in the short term. Deferred contracts should hold onto more support, with expectations for a China deal and/or a surge in export sales. Dec hogs made their lowest trades today since September 11 as prices move toward new lows in the recent trading range. Feb hogs fell back within their recent trading range and below the 10-day moving average support level, while the Apr contract has fallen back to the high end of the recent trading range.

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