Stewart-Peterson Market Commentary

Closing Commentary - August 22, 2019

Top Farmer Midday Update 8-22-19

CORN: Corn prices have been choppy this morning, unable to put together much in the way of strong follow through buying from yesterday's hook reversal. Sep corn is up 1/4 of a cent to 3.62-3/4, Dec corn is up 1/4 of a cent to 3.70-1/2, and Mar corn is steady at 3.82-1/2. The Pro Farmer crop tour pegged the IL corn yield at 171.2 bu per acres vs 192.6 last year, and down from the 3-year average of 188.9. IA corn yields are coming in both above and below last year's district average numbers. IA has had some of the best conditions in the nation this year, so this is not much of a surprise. Ethanol production was down 2.1% vs last week, and down 4.7% vs this same week last year. Yesterday's flash sale of 328,000 tons of corn to Mexico was the largest single day sale announcement since February. Dec corn has traded as high this morning as 3.74-1/2 and as low as 3.68. Prices seem to be consolidating near the contract lows made in May at 3.63-3/4. Funds were thought to have bought about 7,000 contracts of corn yesterday.

SOYBEANS: Soybean futures are trading slightly higher this morning, with Sep up 2-1/2 cents to 8.63, Nov beans are up 2-1/2 to 8.75-1/2, and Jan beans are up 2-1/2 to 8.89-1/4. Average IL pod counts were down from last year and down from the average pod counts according to Pro Farmer. Pod counts in IA are coming in on both sides of last year's pod counts and the average pod counts. Some districts are seeing better results than usual and some are seeing worse. Traders are beginning to worry about forecasts showing below normal temperatures from August 27 to September 4. The soybean crop needs heat and sun to speed up maturity, which is far behind at this time. Nov beans traded above their 10 and 20-day moving average resistance levels earlier in the session, but have since backed off. A close above 8.79 would be a very positive technical development and would likely spur additional follow through buying. Momentum indicators are still pointing mostly higher. Speculative funds were thought to have bought about 3,000 contracts of beans yesterday.

WHEAT: Wheat markets are mixed to mostly higher this morning, with Sep Chi wheat up 4-1/2 cents to 4.67, Sep KC wheat is up 4 cents to 3.90-1/4, and Sep spring wheat is down 2-1/4 to 5.00. Chi wheat yesterday made a hook reversal and is finding follow through buying today. KC wheat is likely rallying in sympathy, and the Sep contract is currently trading just below its 10-day moving average resistance level. Spring wheat futures continue to drift into new lows. The U.S. dollar is slightly lower today which is somewhat supportive, but Ukraine crop estimates continue to grow. Speculative funds were thought to be net even during yesterday's session.

CATTLE: Cattle markets are making solid gains early today with Aug lives up 2.00 to 104.67, Oct is up 1.12 to 101.35, and Dec lives are up 1.07 to 106.37. Aug feeders are up 87 cents to 138.25 and Sep feeders are up 1.10 to 136.40. Beef values continue to rise and are at their highest levels since June 2017. The meat packers are making huge money right now which should keep slaughter moving at a good pace and demand for slaughter supplies high. Live cattle contracts are breaking through nearby resistance at the 10-day moving average levels and are making their way out of oversold levels. Strong closes today will likely spark impressive follow through buying. Feeder markets are testing overhead trendline resistance, though gains in feeders are more modest today than the live markets. Traders are expecting positive to neutral Cold Storage and Cattle on Feed reports.

HOGS: Hog markets are slightly lower this morning in early trade, with Oct down 25 cents to 63.05, Dec is down 50 cents to 62.17, and Feb hogs are down 60 cents to 69.22. Domestic cash fundamentals continue to weaken up and yesterday's technical selling was disappointing as well. Weak pork values indicate a lack of strong export activity. The best traded Oct contract has traded lower most of the day, and while sellers appear to be drying up at these levels, bargain buyers are not exactly stepping in either.

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