Stewart-Peterson Market Commentary

Closing Commentary - March 21, 2019

Top Famer Midday Update 3-21-19

Corn: Corn futures are slightly higher this morning in another quiet start to the session. May corn is up 1-1/4 cents to 3.72-3/4, Jul is up 1 cent to 3.82, and new crop Dec corn is up 3/4 of a cent to 3.96-1/4. The July contract has broken through its 20-day moving average resistance level after four unsuccessful tests in a row. A close above would be the first since February 6. Export sales data released this morning was supportive, with 856,000 tons of U.S. corn sold for the week ending March 14. This was near the high end of estimates and was sharply higher than last week's sales of 372,000 tons. The U.S. dollar is higher and wheat slightly lower, keeping buyers somewhat subdued, still the market is feeling somewhat optimistic about U.S./China trade negotiations and future Chinese demand for U.S. corn. During Wednesday's session, funds sold about 3,000 contracts of corn and are now thought to be net short about 239,000 contracts.

Soybeans: Soybean futures are retesting their 20-day moving average levels once again this morning. May beans are up 1-1/2 cents to 9.07-1/2, Jul soybeans are up 1-1/2 cents to 9.21, and Nov soybeans are up 1-1/2 cents to 9.41-3/4. South American weather has been mostly favorable for soybean crops, keeping production levels high. In addition, what looks to be a later spring has the potential to add to soybean planted acres and create an even more burdumsome supply than this year's record ending stocks and stocks to use ration. This morning's export sales data was disappointing, with just 400,000 mt of U.S. beans sold the week ending March 14. The market was expecting sales of at least 600,000 mt, and last week's total was over 1.9 mmt. Successful closes above the 20-day moving average levels would be impressive and may spark some short covering. Yesterday, funds bought 4,000 contracts of soybeans and are now thought to be net short about 84,000 contracts.

Wheat: Wheat markets are slightly lower in early trade today, with May Chi wheat down 2-3/4 cents to 4.62, May KC wheat down 1/4 of a cent to 4.43-3/4, and May Mpls wheat down 1-1/4 cents to 5.70-1/4. Despite lower trade so far, price action today has not been so bearish. Prices traded with sharper losses early on, testing nearby support and have since bounced back up. Traders continue to worry about damage done to the U.S. winter wheat crop due to recent storms, as well as what should be very late planting for the U.S. spring wheat crop. Funds are still holding wheat markets lower despite covering 5,000 contract in the Chi market yesterday. Funds are still short about 65,000 contracts of soft red winter wheat. The U.S. sold about 299,000 tons of wheat for the week ending March 14 vs expectations for sales of 200,000-450,000 mt.

Cattle: Cattle market are mixed this morning, with Apr lives down 17 cents to 129.40, Jun lives steady at 123.37, and Aug lives down 2 cents to 119.30. Apr feeders are up 80 cents to 149.12, and May feeders are up 97 cents to 153.10. Feedlot conditions are still very stressful for the cattle, and weather in the near term does not look to ease up either. Retail beef values have held strong, but technical momentum may be waning. We are still not seeing reversal signals, the fact that hogs are up sharply and cattle are not drawing spillover support may be somewhat concerning. With that said, prices are still holding nearby support levels and trade has been choppy.

Hogs: Hog markets are sharply higher again this morning, with Apr up 2.57 to 76.40, Jun up 3.22 to 93.47, and Jul hogs are up 3.77 to 96.85. The deferred contracts have pushed past their normal 3.00 limits today after another strong week of export sales. The U.S. sold just over 29,000 mt of pork for the week ending March 14, including almost 16,000 tons to Mexico despite tariffs, and 3,000 tons of China despite heavy tariffs. African swine fever shows no signs of being contained in China, and is now spreading quickly in Vietnam. Futures prices are currently trading over 1.00 off of the day's highs, but prices have not fallen much since rocketing higher on the open.

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