Stewart-Peterson Market Commentary

Closing Commentary - December 19, 2018

Top Farmer Midday Update 12-19-18

Corn: Corn futures are down 1 to 2 cents this morning, with Mar down 1-3/4 to 3.83-3/4, May is down 1-3/4 cents to 3.91-3/4, and Jul is down 1-1/2 to 3.98-1/2. Prices have been within a range today of just 1-1/2 cents in extremely quiet trade. It is still unclear at this point if prices are coiling for a sharp move higher, or if upward momentum is waning leading the way for prices to start a drift lower. Ethanol margins are very tight, and many ethanol company stocks hit multi-year lows yesterday. During yesterday's session, funds bought 7,000 contracts of corn and are now thought to be long about 106,000 contracts.

Soybeans: Soybean futures are moderately lower after a reported sale to China was viewed as smaller than expected. Jan beans are down 5-1/2 cents to 9.02-1/4, Mar beans are down 6-1/4 cents to 9.14-1/2, and May beans are down 6-3/4 to 9.27-1/4. The USDA announced a sale of 1.199 million metric tons of soybeans for delivery to China this morning. While this is good news, the market was looking for more, hence the pressure so far this morning. The U.S. and China are holding talks in January to negotiate a broader trade truce. That, plus some dry weather concerns in Southern Brazil are keeping beans supportive of some technical moving average levels.

Wheat: Wheat futures are finding selling pressure this morning, with the Mar Chi contract down 8-3/4 cents to 5.24, Mar KC is down 6-3/4 cents to 5.10-1/2, and Mar Mpls wheat is down 4-1/2 cents to 5.72-1/4. Both winter wheat contracts have fallen below their 10-day moving average support levels this morning. Mexico has tripled their wheat purchases from China this year to 900,000 tons, and news broke this morning that Russia sent its first test cargo of wheat to Saudi Arabia. Russia is sending test shipments to Algeria and Saudi Arabia over the next few months with hopes of earning a portion of their business from Europe. During yesterday's session, funds sold 3,000 contracts of wheat and are now thought to be short about 26,000 contracts.

Cattle: Cattle markets are mixed this morning, with Dec lives down 2 cents to 119.75, Feb lives are down 30 cents to 122.27, and Apr lives are up 7 cents to 124.67. Jan feeders are up 15 cents to 146.35 and Mar feeders are down 12 cents to 144.22. There was some early weak cash trade yesterday afternoon at $118, steady to lower than last week. This is likely mooting some of the strength from yesterday's session. Packer demand is expected to be reduced over the next couple of weeks due to shortened kill schedules. Beef values have hung in there nicely and should keep some support below the cattle markets.

Hogs: Hog markets are slightly higher this morning, with Feb up 57 cents to 63.22, Apr hogs are up 40 cents to 68.22, and Jun hogs are up 45 cents to 81.92. China reported their 91st case of African swine fever last night, and even though China has yet to buy substantial amounts of U.S. pork, traders are still hopeful that these purchases will pick up once more progress is made on the U.S./China trade front. However, most of today's buying interest is likely technical in nature. Besides yet another ASF case, there is not much new fundamentally. Instead, prices were left oversold yesterday afternoon, attracting some short covering in value buying.

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