Stewart-Peterson Market Commentary

Closing Commentary - August 20, 2019

Top Farmer Midday Update 8-20-19

CORN: Corn futures are trading moderately lower today, giving back some gains from the overnight session in a disappointing morning. Sep corn is down 3-3/4 cents to 3.61-1/4, Dec corn is down 4 cents to 3.70-1/2, and Mar is down 4 cents to 3.83. The Pro Farmer Tour pegged Ohio's corn yield yesterday at 154.4 bushels per acre vs last year's tour estimate of 179.6 bushels per acre and the USDA's current estimate of 160 bushels per acre. South Dakota's corn yield is said to be at 154.1 bushels per acre vs last year's tour average of 178 and the USDA's current estimate at 157. Despite expectations for lower corn production, the market is shrugging off these estimates as the Pro Farmer Tour has come in below the USDA's numbers in 14 of the last 18 years. In addition, wide-spread rains this morning across the hear of the Corn Belt are going to be a net benefit for the corn crop and stabilized conditions in some of the drier areas. Dec corn traded as high overnight as 3.79-3/4 but has since fallen below last Friday's lows. The corn market is currently putting in a bearish outside day. Speculative funds were thought to have sold about 9,000 contracts of corn yesterday.

SOYBEANS: Soybean markets are trading just slightly higher in early trade today, with Sep up 2 cents to 8.56, Nov is up 2-1/4 cents to 8.68-3/4, and Jan beans are up 2 cents to 8.82-1/2. Pro Farmer's Crop Tour has come up with some lower-than-expected pod counts in the state's surveyed so far. Ohio's soybean pod count in a 3x3 foot square average 764 pods vs last year's average pod count at 1,248.2. South Dakota's pod count in the 3x3 foot square was said to be 832.9 pods vs last year's average at 1,024.7 pods. The crop tour does not estimate final soybean yield, but it can at least serve as another piece of information in evaluating this year's crops. Rains across the country today should improve soybean crop conditions. The Nov contract made another unsuccessful test of its 10-day moving average resistance level yesterday. Prices have still held within yesterday's trading range though are drifting towards the low end throughout the morning. Speculative funds were thought to have sold about 6,000 contracts of soybeans yesterday.

WHEAT: Wheat futures are soft this morning, unable to find any support from the lower U.S. dollar. Sep Chi wheat is down 7 cents to 4.58-1/2, Sep KC wheat is down 6 cents to 3.85-1/4, and spring wheat is down 1-3/4 to 5.03-3/4. The Russian ruble pushed down to a new six-month low this morning, dragging German, French, and British wheat offers lower. The Sep Chi contract is trading at its lowest level today since May 16 as prices drift further and further into oversold territory. Sep KC wheat has turned lower after a brief rally last week and the winter wheat spreads are strengthening up again today by a penny or two. Spring wheat markets are trading in very tight ranges near the lows of the day. Speculative funds were thought to have sold about 4,000 contracts of Chi wheat yesterday.

CATTLE: Cattle markets are showing triple-digit gains early today, with Aug lives up 1.95 to 102.15, Oct lives are up 2.20 to 100.45, and Dec lives are up 1.65 to 105.37. Aug feeders are up 1.45 to 137.12 and Sep feeders are up 2.85 to 135.67. Beef prices are at their highest levels in over two years which is keeping the cash markets supported. Traders were also calmed by last week's slaughter actually coming in greater than the slaughter total from the week before the Tyson plant in Kansas burned down. This will also be beneficial in keeping cattle current and weights relatively low. Live cattle are trading up near the highs of the session with overhead gaps still open. Feeder markets are pushing through their nearby 10-day moving average resistance level after a number of unsuccessful tests lately. Closes above should attract additional buyers.

HOGS: Hog markets are finding solid follow-through buyers on yesterday's gains, with Oct up 1.15 to 65.17, Dec is up 1.80 to 64.65, and Feb is up 1.32 to 71.05. Choppy pork prices in the U.S. have kept buying somewhat limited lately, but the extreme rally in China pig prices should be an indicator that China will be an aggressive buyer of pork later in the year, likely from Europe and Canada. Prices have pushed through their nearby 10-day moving average resistance level which has been a major point of contention for the past two weeks. Prices are no longer oversold and strong closes should encourage more buyers to step in.

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