Top Farmer Midday Update 5-22-19

Corn: Corn futures are choppy in early trade so far this morning, with Jul down a penny to 3.93-1/4, Sep is down 3/4 cent to 4.02, and Dec corn is up 1/2 cent to 4.11. Much of the selling action overnight and early this morning is likely technical in nature. Dec corn is currently trading nearly 50 cents above the contract lows made last Monday morning. Still, rains seen for the next 7 days have gotten even more significant. 1-1/2 to 3 inches of rain are seen for parts of IL, 1-3/4 to 2-1/2 inches of rain for SD and MN, and up to 3 to 6 inches of rain could fall for parts of IA, MO, NE, and KS. The extended forecasts are still showing above-normal precipitation as well. Corn contracts traded moderately lower overnight to fill the gaps created yesterday but have since stabilized. Funds bought about 37,000 contracts of corn yesterday and are thought to be net short about 143,000 contracts.

Soybeans: Soybean futures are trading moderately higher after yesterday's late session selloff. Jul beans are up 8-1/4 cents to 8.30-1/4, Sep beans are up 8 cents to 8.43-1/2, and new crop Nov soybeans are up 8-1/4 cents to 8.56-3/4. There is a lot of uncertainty about the rumored 2.00 per bushel payout to soybean farmers as a trade aid stimulus. Details are very light and there is debate as to how that payment will be determined and if it could influence planting decisions. Weather forecasts are still looking as though some corn acres could move to beans. So far, today's soybean prices are putting in their sixth unsuccessful test of the 20-day moving average resistance levels. Prices yesterday were above that level for most of the session but quickly sold off once rumors of the soybean payout surfaced. Funds sold about 8,000 contracts of soybeans yesterday and are thought to be net short about 168,000 contracts.

Wheat: Wheat markets are moderately lower in early trade this morning, with Jul Chi wheat down 6 cents to 4.72-3/4, Jul KC wheat is down 4-3/4 cents to 4.31-1/4, and Jul spring wheat is down 4 cents to 5.39. TX, OK, and KS received 5 to 8 inches of rain recently, and KS has more rain on tap for this week. This will likely impact quality and could increase the risk of disease. ND and SD are still wet as well keeping spring wheat planting moving at a slow pace. Rumors circulated yesterday of a 63 cent per bushel wheat stimulus payment. If this payment influences planting decisions, we could see all of the intended spring wheat acres planted, and possibly even some intended corn acres move to spring wheat. Jul Chi wheat was unable to close above its 100-day moving average level yesterday. Prices so far today are facing a technical setback as the recent jump has left prices overbought. Funds bought about 1,000 contracts of wheat in Chi yesterday and are thought to be net short about 60,000 contracts.

Cattle: Cattle markets are mixed to mostly lower this morning, with Jun lives up 2 cents to 110.87, Aug lives down 10 cents to 108.17, and Oct lives down 22 cents to 108.07. May feeders are up 22 cents to 134.60 and Aug feeders are down 32 cents to 142.67. Cash trade has already begun to slip below last week's prices, and beef values are moving lower as well due to the poor forecasts for Memorial Day weekend. Live cattle markets made bearish outside days yesterday but were able to hold their 10-day moving average support levels. Prices have tested and held those levels so far today. Feeder markets have been unable to push back above their 10-day moving average level after yesterday's closes below.

Hogs: Hog markets are slightly higher this morning, with Jun up 2 cents to 90.12, Jul hogs are up 25 cents to 91.62, and Aug hogs are up 17 cents to 92.65. Technical momentum is mostly stagnant at this time, but pork values have been rallying both in the U.S. and in China. Cash hog prices have been mostly higher as well. Overhead technical resistance at the 20-day moving average level in the Jul contract has been very staunch, and a significant close above could attract some money flow. In the meantime, traders will be watching for new developments on the U.S./Mexico/Canada trade agreement.

Market Commentary provided by:

137 South Main Street, West Bend, WI 53095
Phone: 800-334-9779