Stewart-Peterson Market Commentary

Closing Commentary - December 17, 2018

Top Farmer Midday Update 12-17-18

Corn: Corn futures are slightly lower this morning, with Mar futures down 1-1/4 cents to 3.83-1/2, May down a penny to 3.91-1/4, and Jul is down 1-1/4 cents to 3.97-1/2. Corn futures are still trading within their recent trading ranges but have fallen below their 10-day moving average support levels. Prices have not made closes below the 10-day moving average levels since November 27. China is expected to buy at least 3 million metric tons of corn starting in January, but until evidence of these purchases show up, there isn't much reason to push corn above its recent highs. On this morning's export inspections report, a total of 885,000 tons of corn were reported shipped for the week ending last Thursday. This beat last week's total of 876,000 tons and the same week last year's total of 637,000 tons. Corn shipments are running over 6 million metric tons ahead of last year's pace. During Friday's session, funds bought 4,000 contracts of corn and are thought to be long about 102,000 contracts.

Soybeans: Soybean futures are gravitating higher this morning, with Jan up 6-1/4 cents to 9.06-3/4, Mar is up 6 cents to 9.19-3/4, and May is up 6-1/4 cents to 9.33-1/4. After making closes below their 10-day moving average levels on Thursday and Friday of last week, soybeans are trying to make a retest of that overhead resistance today. Last week's China purchases of U.S. beans of 1.43 million metric tons disappointed many, but the market is still hoping for more in the near term. The U.S. shipped a total of 975,000 tons of beans for the week ending December 13. Last week, the U.S. shipped 927,000 tons and 1.796 million metric tons were shipped the same week last year. Funds sold about 6,000 contracts of beans on Friday and are thought to be short about 17,000 contracts.

Wheat: Wheat markets are higher this morning, gaining traction from higher Russian prices and potential crop issues in Brazil. Mar Chi wheat is up 4 cents to 5.34, Mar KC wheat is up 2-3/4 cents to 5.21, and Mar Mpls wheat is up 1/4 cent to 5.84-1/4. Russian wheat prices gained 4.4% just last week and are now at the highest levels since December 2014. This is adding to speculation that the upcoming meeting between the Russian Ag Ministry and wheat traders may result in export curbs. Lower-than-expected yields in northern Brazil have been reported recently, along with some rain and hail damage decreasing harvestable area in some of the southern regions of Brazil. The U.S. shipped 682,000 tons of wheat last week vs 449,000 tons the previous week, and 625,000 tons the same week last year. Shipments are still running just over 2 million tons behind last year's pace. Funds sold about 4,000 contracts of wheat on Friday and are thought to be short about 26,000 contracts.

Cattle: Cattle futures are making moderate to sharp losses so far today, with Dec lives down 82 cents to 118.75, Feb lives are down 1.15 to 121.25, and Apr lives are down 92 cents to 123.57. Jan feeders are down 2.00 to 145.57 and Mar feeders are down 2.30 to 143.47. Cash trade on late Friday afternoon was reported between $118-$119, steady to slightly lower than the previous week. Forecasts for the next 4-5 days looks warm and dry in the Plains, and cattle should have no problem gaining weight. Beef prices have been sliding recently and technicals looked oversold coming into today's session.

Hogs: Hog markets are putting in moderate losses this morning, with Feb down 1.15 to 63.35, Apr down 1.17 to 68.87, and Jun down 97 cents to 82.20. Prices have fallen below nearby moving average support and out of their recent trading ranges. The Feb contract has not traded at prices this low since November 15. Retail pork values have been slipping and even though China reported two more ASF cases over the weekend, the market will need to see evidence that China will be buying large portions of U.S. pork to move prices higher.

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