Stewart-Peterson Market Commentary

Closing Commentary - October 17, 2018

Top Farmer Midday Update 10-17-18

CORN: Corn futures are down 1-1/4 cents this morning, with Dec trading at 3.74 and Mar trading at 3.86. Despite yesterday's lower close and more pressure today, futures remain above the 100-day support level. Reports of variable corn yields continue to support the market as farmers are able to get back in the fields. Despite the friendly tilt to the current fundamentals, futures are likely overbought at this point. As of yesterday's close, corn has picked up almost 13 cents since last week's report. Stochastics are currently giving an overbought reading and prices will need some time to collect themselves in the near term. Farmer selling is likely to increase as futures gravitate higher.

SOYBEANS: Soybean futures are down just slightly this morning, with Nov trading 3/4 of a cent lower to 8.84 and Jan trading a penny lower to 8.98-1/4. The Nov futures contract has traded in a very tight range so far today, and is currently below its 100-day moving average level. Strong energy prices should keep soybean oil prices supported, especially when crush numbers are increasing and soy oil stocks are shrinking. The two cargoes of U.S. beans that went to China earlier this week were reportedly purchased before tariffs were enacted, and this was seen as putting somewhat of a damper on the bean market.

WHEAT: Wheat futures are moderately lower this morning, with Dec Chi contracts down 5-3/4 cents to 5.17-3/4, Dec KC futures down 6-1/4 cents to 5.21-3/4, and Dec Mpls wheat down a nickel to 5.91-1/4. Winter wheat futures continue to bounce around in their recent trading range, trapped between heavy U.S. stocks and shrinking world stocks. Money flow has been contradictory as well. So far today, Chi futures have held their 10 and 20-day moving average support levels.

CATTLE: Cattle futures are very slightly lower this morning, with Oct lives down 2 cents to 112.62 and Dec lives down 57 cents to 117.20. Oct feeders are down 57 cents to 153.45 and Nov feeders are down 87 cents to 153.35. Some traders are growing worried that the current premium of futures to cash could incentivize over feeding and increased weights. So far this morning, the Dec live cattle contract has fallen below its 10-day moving average support level but has not made much progress selling off. Nov feeders have fallen below their 50-day moving average for the first time since September 7. While stochastics are reading oversold, this could open up some additional downside for the feeder markets.

HOGS: Hog futures are down this morning, with Dec trading 1.55 lower to 55.32, Feb down 1.05 to 63.20, and Apr down 47 cents to 69.00. Hog prices put in very poor closes yesterday considering the day's price action, and are likely finding some increased selling activity on the negative tone. There is still enough long-term uncertainty to hold prices within their recent ranges, and major support levels are still holding at this time.

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