Stewart-Peterson Market Commentary

Closing Commentary - May 21, 2019

Top Farmer Midday Update

Corn: Corn futures are trading sharply higher this morning gapping up to begin the overnight session. Jul corn is up 8-3/4 cents to 3.97-3/4, Sep corn is up 8-3/4 to 4.05-1/2, and new crop Dec corn is up 7-1/2 to 4.12. Yesterday's Crop Progress report was considered very supportive, with just 49% of the nation's corn planted vs 80% on average for this week. Corn emergence was said to be at just 19% vs 49% on average, a result of a very cold spring thus far. Forecasts are still showing heavy rains for many areas this week and for the next 8-14 days, above normal precipitation is seen most areas. The Jul corn contract made its third gap up open this week and is now trading at its highest value since January 8. New crop Dec corn made highs today so far at 4.13, the highest price since August 8. Funds bought about 30,000 contracts of corn yesterday and are thought to be net short about 180,000 contracts.

Soybeans: Soybean futures are trading with double-digit gains so far today, with Jul beans up 12-1/4 cents to 8.44, Sep beans are up 12-1/4 to 8.57-1/4, and new crop Nov soybeans are up 12-3/4 to 8.70-1/2. Prices traded down to their 20-day moving average support levels this morning but have held that level and rebounded so far. With extended forecasts showing above normal precipitation, some are starting to worry soybean yields may be down this year. Soybean plantings were said to be 19% complete as of Sunday vs 47% on average. Speculative funds bought about 8,000 contracts of soybeans yesterday and are thought to be net short about 160,000 contracts.

Wheat: Wheat markets are showing double-digit gains again today, with Jul Chi wheat up 11-1/2 cents to 4.89-3/4, Jul KC wheat is up 15 cents to 4.49-1/2, and Jul Mpls wheat is up 10 cents to 5.53-1/2. Jul Chi wheat is trading above its 100-day moving average for the first time since late August. Spring wheat contracts are trading above their 100-day moving average levels for the first time since October. Excessive rains lately and in forecasts should keep spring wheat plantings behind schedule and may cause stress for the winter wheat crop. Funds bought about 9,000 contracts of wheat in Chi yesterday and are thought to be net short about 61,000 contracts.

Cattle: Cattle markets are mixed this morning, with Jun lives up 5 cents to 111.40, Aug lives are up 27 cents to 108.77, and Oct lives are up 47 cents to 108.97. May feeders are up 15 cents to 134.30, Aug feeders are down 1.65 to 143.12, and Sep feeders are down 1.37 to 144.50. Live cattle prices have held in their recent ranges so far today while the feeder cattle contracts have moved back below their 10-day moving average support levels. Boxed beef values saw a decent jump yesterday, and recent news that Japan is lifting restrictions on U.S. beef is also supportive. However, Memorial Day weather across the country does not appear to be ideal for grilling season which may temper demand. Futures prices are technically oversold for the short term, but the market is still trying to factor in heavy supply fundamentals.

Hogs: Hog markets are moderately lower this morning, with Jun hogs down 95 cents to 90.80, Jul hogs are down 70 cents to 92.30, and Aug hogs are down 70 cents to 93.75. Without new developments on the China trade front, prices cannot seem to break out of their recent ranges and tangle of moving average support and resistance levels. Outlook prospects for Mexico are improving after the U.S. lifted tariffs on steel and aluminum. Cash hog prices in the U.S. have been rallying as of late and choppy in China, and pork prices have been rallying in the U.S.




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