Top Farmer Closing Commentary 11-11-19

CORN HIGHLIGHTS: Despite friendly looking bullish key reversal on Friday, corn prices failed to find follow through reason to move higher, and consequently lost 4 to 4-3/4 cents. May led today’s drop, closing at 3.88-3/4. Nearby Dec lost 4, closing at 3.73-1/4, its lowest close since late September. New crop Dec lost 2-3/4, closing at 3.98-1/4. A lack of news, due to Veterans Day, left traders with somewhat of a void of reason to own corn. Harvest continues to chug along but at a slow pace due to less than ideal weather. Beans weighed on corn today, as they lost 11 to 14-1/2 cents, as trade tensions with China may have taken a turn in the wrong direction after Hong Kong police apparently shot an unarmed protester. Beans also have been pressured by improving weather in the southern Hemisphere.

SOYBEAN HIGHLIGHTS: Soybean futures were under pressure all day and lost 10-1/4 to 14-1/2 cents, as Nov led today’s drop, closing at 9.05, below the 50-day moving average for the first time since September 12 and its lowest close since September 30. There was a heightened sense of uncertainty with trade negotiations as it was indicated on Friday that President Trump had not necessarily agreed to tariff rollbacks, followed by a civilian protester who was shot in Hong Kong early today added tension to the market, and this was reflected in lower prices. Brazilian weather has improved from a month ago and is a non-factor. As we have stressed early on, it is too early to rely on South American weather to have much of a correlation with potential crop production. However, the market seemed to react in a positive fashion, and you should have either made sales, catch up sales or both.

WHEAT HIGHLIGHTS: Lack of positive news and weakness in corn and soybeans seemed to be enough to keep Chi and Mpls wheat on the defensive, each losing 3-1/4 to 4-1/2 cents. KC Dec closed 1-1/4 higher, while deferred contracts were generally 1-2 lower. News in the wheat market was lacking, and prices drifted. We have been encouraged that futures have held better than we may have thought for this time of year, in particular Chi wheat. That being said, we are lacking positive news, and Friday’s report basically confirmed adequate supplies with little change on world projected carry out, as well as domestic stocks. Expectations that world supplies could tighten if the Australian crop continues to struggle with dry weather is supportive; yet, the global market just doesn’t have much fire power underneath it, and we are airing on the side that, without positive news, prices drift lower easier than they move higher.

CATTLE HIGHLIGHTS: Cattle markets started the day with gains across the board, with Dec lives up 62 cents to 119.87. Feb lives were up 65 cents to 125.67, and Apr lives were up 85 cents to 126.95. Nov feeders were up 57 cents to 147.57, and Jan feeders were up 1.25 to 147.12. Choice beef values closed 83 cents higher on Friday afternoon to 239.12, their highest value since August 22. Choice beef was down 55 cents this morning to 238.57. Cash cattle traded in the country on Friday between 1.00 and 2.00 higher than the previous week. Slaughter last week was down 7,000 head from the previous week, though unusually high weights have kept production stabilized. Since the week ending September 24, speculative funds have bought over 66,000 contracts and are now holding a net long position of just under 61,000 contracts. This has come quickly, though is nowhere near close to the speculators’ record ownership position of nearly 153,000 contracts. Dec live cattle back tested their 10-day moving average support level for the second session in a row today and made their second highest close since April. Jan feeders made their highest close today since May 1 after breaking out of recent consolidation.

LEAN HOG HIGHLIGHTS: Hog markets had a mixed session today, with Dec down 82 to 63.30. Feb was down 17 cents to 73.72, and Apr hogs were up 32 to 80.65. The CME lean hog index was up 10 cents to 60.29, its second up day since turning lower on October 25. Carcass cutout values were up 73 cents at mid session to 83.40 and were up another 2.03 this afternoon to 82.67. The jump in pork values of over 15.00 since the September 18 low suggests strong export sales. China’s spot pig price index was down 6% overnight and is now down 8.6% for the month but still up 179.7% year to date. The best traded Dec lean hog contract broke below recent lows today, actually falling to its levels since September 11. Today’s close was the lowest since that day, and the Dec contract is drifting into oversold levels. Feb and Apr contracts fared better today, with Apr making its highest close since October 23, its first above its 50-day moving average resistance level since October 28.




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Stewart-Peterson
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