Stewart-Peterson Market Commentary

Closing Commentary - January 22, 2019

Top Farmer Midday Update 1-22-19

Corn: Corn futures are under a bit of selling pressure to begin the short week, with Mar corn down 1-1/4 cents to 3.80-1/2, May corn down 1-1/4 cents to 3.88-3/4, and Jul corn down a penny to 3.96-1/4. While trade relations between the U.S. and China have thawed over the past week, reports surfaced this weekend that intellectual property issues were still sticking points in negotiations. Argentina weather was dry over the weekend, a beneficial development for what has been a soaked growing area this year. The four nearby corn contracts are trading inside of Friday's range, while Dec did move 1 tick below but has since recovered to trade back above its 200-day moving average support level. Funds are thought to be long about 126,000 contracts of corn as of Friday's close.

Soybeans: Soybean futures are very slightly lower this morning, with Mar down a penny to 9.15-3/4, May down a penny to 9.29, and Jul down 3/4 cent to 9.41-3/4. With most supportive trade developments with China known and priced in, prices are having a bit of difficulty rallying today. Brazil saw insignificant rains over the weekend and the hot and dry pattern is expected to continue into the end of the month. Bean futures are trading well inside of Friday's ranges and have been unable to selloff with rumors that China could import 1 trillion dollars of U.S. goods over the next six years. Funds bought 11,000 contracts of beans on Friday and are thought to be net short about 1,000 contracts.

Wheat: Wheat markets are making an impressive start to the week, with Mar Chi wheat up 4-1/4 cents to 5.22, Mar KC wheat is up 4-1/2 cents to 5.10-1/2, and Mar spring wheat is steady at 5.74-1/4. Extremely cold temperatures across the Midwest are supportive, with up to 30% of the soft red winter wheat crop at risk. Russian news flow is mixed, with the Russian Ag Minister indicating that they will regulate grain prices on the domestic market in the near term, likely by releasing government stocks. Mar Chi wheat tested but has so far failed to break through its 100-day moving average level. A close above that level would be the first since August 31. Funds bought 4,000 contracts of wheat on Friday and are thought to be short about 8,000 contracts.

Cattle: Cattle markets are moderately lower this morning, possibly signaling an end to the recent strength. Feb lives are down 97 cents to 125.55, Apr lives are down 70 cents to 126.67, and Jun lives are down 27 cents to 117.17. Jan feeders are down 37 cents to 141.07, and Mar and Apr feeders are both down 1.20 to 141.62 and 143.20 respectively. While cold temperatures in the Plains over the next week or so will cause some stress, a lack of precipitation should limit stress to a degree. However, winter storms over the weekend were supportive and beef values did jump on that development. However, technicals are overbought and funds are likely holding a fairly large net long position which could open the door for liquidation selling.

Hogs: Hog markets are mixed this morning, with Feb hogs up 45 cents to 61.67, Apr hogs are down 40 cents to 65.87, and Jun hogs are up 22 cents to 79.60. Pork production and slaughter pace have been up sharply from last year, but weather may support higher cash and product prices this week. Trade developments will be watched closely as China continues to battle with African swine fever.




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