Top Farmer Midday Update 12-28-18
Stewart-Peterson Commentary - SPC - Fri Dec 28, 10:58AM CST

Corn: Corn futures are trading 2 to 3 cents higher this morning with front month Mar up 2-3/4 to 3.77-/14, while May is up 2-3/4 to 3.85. Corn futures are seeing some technical bounce after yesterday's trading session, holding key trendline support underneath the corn contracts. With the government shutdown, no information on weekly export sales was reported today, but today's move is more technical, based on strength seen on the downside markets, as well as across the entire grain complex. Markets are likely seeing some position squaring as we are moving into the end of the year, with an eye focusing on the next USDA report on January 11.

Soybeans: Soybean futures are trading strongly higher with contracts 12 to 15 cents higher today. Front month Jan beans are up 15-3/4 to 8.84-3/4, while Mar is up 15-1/2 to 8.98-1/4. The market is seeing some technical short covering as prices held key trendline resistance in yesterday's trade. In addition to the short covering move, the market is still digesting any potential trade news between the U.S. and China with the two scheduled to meet during the week of January 7. The South American crop continues to progress nicely but reports of dry areas in Brazil may have soybean production sliding lower by 2-3 million metric tons over previous forecasts. The calendar has the next 3-4 weeks as the key window for development of the Brazilian crop, and weather forecasts will be closely watched.

Wheat: Wheat futures are trading 1 to 2 higher today, with the Chi Mar contract up 2-1/4 to 5.12-3/4, while May is up 2 to 5.19. Wheat is seeing some strength, like the other grains, after holding key trendline support yesterday, as well as the overall strength in the grain markets helping to bring some short covering into the wheat market. Wheat futures may be limited in rally as U.S. demand has yet to improve to the level of expectations. Also, Russian Statistical Agency, Rosstat, said this year's wheat crop was 72.1 million metric tons versus the USDA at 70. Again, we continue to find ample supplies of grain to handle global demand at this stage, which will likely keep wheat futures rallies limited.

Cattle: Cattle futures are trading firmer with the Dec contract strongly higher at 124.47, 1.55 higher and Feb cattle is up 77 cents to 124.72. Strength continues throughout the entire cattle complex as we're seeing modest gains. Technical follow-through on yesterday's strong price action is providing some more movement of speculator money into the cattle market. A strong winter storm across the Midwest may be limiting weight gains, as well as movement of slaughter-ready cattle, bringing some strength into that market. The market is anticipating cash trade to be steady to higher, but at this stage it's still relatively undeveloped with starter bids at $117 and asking prices as high as $123. Cash trade will likely be developed after the trading session today and will be necessary to help maintain the strength seen in futures prices this week. Overall, retail demand has been favorable this week, helping to provide support to the futures market.

Hogs: Hog futures are trading mixed with front month Feb hogs 5 cents higher to 60.62, while Apr hogs are down 27 cents to 66.40. Deferred contracts in the summer months are seeing mild strength as contracts are 5 to 12 cents higher. Pressure on cash hog prices in this market still deals with large supplies of slaughter hogs keeping selling pressure on those front month contracts. In addition, Feb contracts are trading approximately a 6.50 premium over the index, which would limit any upside movement. Retail carcass values have been choppy this week and will likely stay in that pattern until the end of the year. Summer month contracts are still see buying support as development of ongoing concerns regarding African swine fever in China keep the potential for hog exports to that country improving with a forecast of a tighter supply picture for U.S. hogs as confirmed by the latest Quarterly Hogs and Pigs report.




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