Stewart-Peterson Market Commentary

Closing Commentary - February 15, 2019

Top Farmer Midday Update 2-15-19

Corn: Corn futures are steady to very slightly lower so far this morning, despite a positive start to the session. The nearby Mar contract is down 1/2 cent to 3.74-1/4, May is down 1/2 cent to 3.82-1/2, and Jul is down 1/4 cent to 3.90-1/2. New crop Dec corn is steady at 3.99-1/4. The USDA published a flash sale announcement this morning of 205,744 tons of corn for delivery to unknown destinations. The Rosario Grain Exchange raised their Argentina corn production estimate to 46.5 million metric tons versus 44 million metric tons previously and the current USDA estimate of 46 million metric tons. After a negative session yesterday, corn prices have traded up to test their 10-day moving average resistance levels but have since fallen back. During yesterday's session, funds sold 15,000 contracts of corn and are thought to be long about 11,000 contracts.

Soybeans: Soybean futures are trading with very slight gains after a solid start to the session, but then a retest of some nearby support. Mar and May soybeans are both a penny higher, to 9.04-1/2 and 9.18-3/4 respectively, and Jul beans are up 3/4 cent to 9.32. Nov beans are up 3/4 cent to 9.48-3/4. Questions about future Chinese demand have shaken markets a bit this morning. Recent cancellations are thought to be a sign of weaker-than-expected China demand for soybean meal due to a smaller hog herd. This has not been confirmed by China, but the market is a wash with speculation. News overnight that the U.S. and China will re-begin trade negotiations next week in Washington was supportive, but mid-morning, prices traded lower to test their nearby moving average support levels. Since then, prices have stabilized. Funds sold about 7,000 contracts of beans yesterday and are thought to be long about 2,000 contracts.

Wheat: Wheat markets are lower again today, extending yesterday's selloff. Mar Chi wheat is down 6 cents to 5.01, Mar KC wheat is down 8 cents to 4.73-1/2, and Mar Mpls wheat is down 3-3/4 cents to 5.71. Mar Chi wheat is trading at its lowest level since January 24, 2018, and the KC wheat contracts have made new lows for the second session in a row. Mpls wheat is finding support on nearby moving average levels. Much of the recent weakness in the wheat contracts has been due to currency moves. This week, the euro has been very weak versus the U.S. dollar, making French wheat much cheaper than U.S. wheat on the export markets. In addition, Russian wheat shipments have still been running ahead of schedule despite expectations for the opposite. Funds sold 12,000 contracts of wheat yesterday and are thought to be short about 11,000 contracts.

Cattle: Cattle markets are lower this morning, further correcting off of nearby highs. The nearby Feb live cattle contract is down 2 cents to 126.10, Apr is down 55 cents to 126.82, and Jun is down 47 cents to 117.80. Mar feeders are down 1.90 to 142.17 and Apr feeders are down 1.92 to 144.57. We are entering a time of year when beef demand typically tapers off. While temperatures in the Plains next week will be running over 20 degrees below normal temperatures, the lack of precipitation should limit stress. A break in beef for cash trade this week could signal speculative length to begin liquidation.

Hogs: Hog markets are lower this morning, with Apr down 2 cents to 58.67, Jun down 22 cents to 76.25, and Jul down 30 cents to 79.70. Very low pork prices are keeping pressure on at the moment, and without much news on the China trade front, speculators are still unwilling to take ownership. Technically, markets are attempting to confirm recent lows as a bottom for the move and dig in their heels in consolidation action.

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