Top Farmer Closing Commentary 8-22-19

CORN HIGHLIGHTS: Corn futures ended quietly, but with gains of 1/2 to 3/4 of a cent as Sep led today's gains closing at 3.63-1/4. New crop Dec closed at 3.71, up 3/4. Export sales at 4.7 mil old crop and 11.9 mil were considered neutral to negative. Year to date sales are 1.972 bil bu, as compared to last year's 2.376 bil for this same time. Relatively benign weather and a firmer dollar in recent weeks weighed on futures, as did growing concern over long term demand due to ethanol waivers and prospects from the USDA that this year's crop is getting larger than just a month ago. Futures continue to hover near a double bottom on Dec corn near the May low of 3.63-3/4, and this week's low of 3.66-1/4. There will continue to be significant uncertainties surrounding the total production figure for the year ahead as a late crop in need of good weather between now and likely the first week of October remains paramount.

SOYBEAN HIGHLIGHTS: Beneficial rains and a lack of new positive news allowed bean prices to go from positive territory to negative and finishing the day with losses of 3 to 4-1/2 cents. Traders may have been moving out of beans and buying corn as the corn market seems to have found support near contract lows. Bean prices continue to hover in more of a sideways pattern finding support from continued reports of less than expected bean pods on the Pro Farmer tour. What has been termed a smaller plant size from many producers gives the longer term suggestion that bean yield numbers could move downward. Some private forecasters are estimating 3 to 4 bu per acre less than the current USDA estimate near 48.5 bu per acre. One thing that the market has to grapple with is just how many acres were planted late and perhaps planted to be eligible for crop insurance, as well as a market facilitation payment. These acres may be poor yield and bringing the national average down. Nothing new in the political front is keeping a cap on prices. There is some hope that news in China may be bargaining soon, but we've been down this road multiple times only to be disappointed.

WHEAT HIGHLIGHTS: Wheat futures edged higher in both KC and Chi with Sep Chi closing 4-3/4 higher at 4.67-1/4, closing at its highest level in four sessions. KC Sep closed 7 higher at 3.93-1/4, above the 10-day moving average for the first time since July 11. There hasn't been a whole lot of friendly news in wheat , but with the U.S. dollar losing some ground today and export sales at 21.8 mil bu, prices may be on the path to consolidation. Export sales at 21.8 mil were termed supportive today, with year to date sales at 383 mil bu vs 314.5 a year ago. With harvest pretty much behind the market except for some spring wheat acres, the idea of increased farmers' selling is not likely and this could lead to consolidation, if not a recovery.

CATTLE HIGHLIGHTS: Cattle markets closed higher today, pushing through some nearby resistance points that should spur some near term buying. Aug live cattle closed 2.30 higher to 104.97, Oct lives closed 87 cents higher to 101.10, and Dec lives closed 80 cents higher to 106.10. Aug feeders were up 1.02 to 138.40 and Sep feeders were up 1.12 to 136.42. Choice beef closed 4 cents higher yesterday afternoon to 241.74, but was down 2.39 this morning to 239.35. Cash trade in NE was seen today at 108 as prices regained some of the strength lost last week. With packing plants able to keep up with the same slaughter pace seen lately, demand for slaughter supplies should keep the cash markets supported. U.S. beef export sales for the week ending August 15 were reported this morning at 17,300 tons vs the previous 4-week average of 14,750 tons. Cumulative sales for 2019 have now reached 686,000 tons, 2.3% ahead of last year's pace. The best traded Oct live cattle contract punched through its 10-day moving average resistance level and closed above it for the first time since July 29. Prices are just starting to creep out of oversold levels. The close above resistance and stochastics crossover higher could spur buying into the weekend.

LEAN HOG HIGHLIGHTS: The hog market made triple digit losses today on follow through from weakness yesterday. Oct hogs closed 1.00 lower to 62.30, Dec hogs closed 1.12 lower to 61.55, and Feb hogs closed 1.25 lower to 68.57. The CME lean hog index was down 59 cents to 77.40. Carcass cutouts values closed 2.67 lower yesterday afternoon to 81.24 and were down another 1.13 to 80.11. Yesterday's pork close was the lowest since July 23. China pig prices are up 5.4% this week, up 29.5% for the month, and up 85.7% year to date. The rally in China pig values and relatively cheap domestic pork prices only led to a somewhat strong week of exports. U.S. beef export sales for the week ending August 15 were reported at 17,300 tons vs a previous 4-week average of 14,750 tons. Cumulative sales for the year have reached 686,000 tons, 2.3% ahead of last year's pace. The best traded Oct contract made its second lowest close today since August 2018. Prices seem to be drifting and drifting without much in the way of speculative buying. Technicals are pointing lower again and the 10-day moving average remains a staunch point of resistance.

Market Commentary provided by:

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