Stewart-Peterson Market Commentary

Closing Commentary - September 19, 2019

Top Farmer Closing Commentary 9-19-19

CORN HIGHLIGHTS: Corn futures finished with small gains of 1/4 to 1-1/2 cents as Dec led today’s stronger market closing at 3.72-3/4. Soybean futures helped provide support gaining 1 to 4 cents. Prices traded both sides of steady, but couldn’t find much in the form of news to provide direction. Some forecasters are suggesting a cool down toward the end of the month and a more normal type frost date expectation. That is providing some support, yet with temperatures continuing to run above normal, late planted corn has more time to mature and is probably doing better than most expect at this point. Export sales at 57.7 mil were termed supportive with one of the better numbers this past week than have been seen in several months. This reflects cheaper value for end users and was reflected in Mexico purchases last week as well. Year to date numbers for the new marketing year are still running behind USDA projections.

SOYBEAN HIGHLIGHTS: Soybean futures moved higher with gains of 1-1/2 to 4-1/4 cents as Nov led today’s gains closing at 8.93. The 100-day moving average acted as support for the second consecutive session. Export sales were supportive at 63.5 mil bu. Year to date sales are 411 mil, trailing last year which was 654 mil. Bear in mind last year end users were aggressively buying in mid to late summer. Today’s number, how matter how you cut it, was supportive. This was well above the weekly pace needed to meet USDA projections. Another round of wet weather is viewed as a mixed blessing. On the one hand, it could add weight to bean pods, yet where berans are drying down, saturated wet soils are not necessarily what farmers are asking for at this time. Nonetheless, it is September 19 and the bulk of harvest will likely be one to three weeks away. At present, we don’t see a threat of frost. Futures continue to show consolidation after good gains last week, but the failure to push through 9.00 Nov might be telling.

WHEAT HIGHLIGHTS: Wheat futures in Chi and KC finished with small losses of 1/4 to 1-1/2 cents, while Mpls gained 5-1/2 to 7 cents. All export sales at 10.5 mil bu were termed a disappointment. We’ve been encouraged with the way wheat futures have been holding together, yet at the same time, we’re beginning to wonder if the technical picture is beginning to hold prices back. The 50-day moving average acted as overhead resistance again today in both Dec and Chi Mar wheat. New crop July is running out of steam at 5.04 as well, today’s high in the 50-day moving average. Wet weather throughout much of the northern Midwest has kept winter wheat planting from aggressively occurring. We’re not sure if that’s a big deal yet or not. Wheat seedings could be up this year due to the amount of corn acres that were put in prevent plant that might go to winter wheat. That too remains to be quantified.

CATTLE HIGHLIGHTS: Cattle markets had a mixed session today in choppy trade ahead of tomorrow’s Cattle on Feed report. Oct lives were down 57 cents to 99.80, Dec lives were down 32 cents to 105.82, and Feb lives were up 15 cents to 112.52. Sep feeders were up 7 cents to 139.95, Oct feeders were up 52 cents to 138.92, and Nov feeders were up 95 cents to 137.25. Choice beef values closed 1.53 lower yesterday afternoon to 218.24, but were up 17 cents this morning to 218.41. For Friday’s Cattle on Feed report, figures are expecting placements to come in 5.9% lower than last year, marketings down 1.7%, and on feed down .7%. U.S. beef export sales for the week ending September 12 were reported this morning at 16,600 tons vs the previous 4-week average of 16,767 tons. This leaves cumulative sales for 2019 at 752,400 tons, 1.4% ahead of last year’s pace. The best traded Dec live cattle contract only traded as high today at 106.25, and as low as 105.32. Today’s settlement was right where the market opened. Oct feeders tested their 100-day moving average level for the first time since May 1 and a close above would be the first since April 29.

LEAN HOG HIGHLIGHTS: Hog markets had a choppy session today with Oct down 1.52 to 61.40, Dec hogs are up 15 cents to 67.95, and Feb hogs are up 22 cents to 75.05. The CME lean hog index was down 73 cents to 56.76. Carcass values were down 10 cents at yesterday’s close to 68.11, but were up 2 cents this morning to 68.13. U.S./China trade negotiations are apparently making progress which is supportive, especially given that trade issues have apparently been separated from the stickier national security issues. A trade deal with China has potnential to increase U.S. pork sales to China extremely quickly. U.S. pork export sales for the week ending September 12 were reported this morning at 14,200 tons vs the previous 4-week average of 21,598 tons. Cumulative sales for the year are up 14.8% from last year and are currently pegged at 1.12 mil tons. The best traded Dec lean hog contract briefly tested its 200-day moving average resistance level today, but was unable to close above it. Dec hogs were able to close above their 50-day moving average level for the fifth session in a row.

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