Stewart-Peterson Market Commentary

Closing Commentary - July 16, 2019

Top Farmer Midday Update 7-16-19

CORN: Corn futures are trading moderately lower in some follow through selling from yesterday's reversal type action. Sep corn is down 6-1/2 cents to 4.34-1/2, Dec corn is down 6-1/2 cents to 4.40-1/2, and Mar corn is down 6 cents to 4.47-3/4. Yesterday's Crop Conditions report was considered negative with 48% of the U.S. corn crop rated good to excellent vs 47% last week and expectations of near 46% good to excellent. 12% is still rated poor to very poor, steady with last week. Rain in the forecast for this week should benefit crops in southern IL, IN and OH, as well as MN and WI. Other areas of the Corn Belt, particularly IA and northern IL are showing moisture stress from a lack of rain the past two weeks. The best traded Dec corn contract never traded above its 20-day moving average resistance level and quickly fell below its 10-day moving average support level. Dec corn traded as low as 4.35-1/2, but has recovered a bit and has held near 4.41 for most of the morning. Funds were thought to have sold about 26,000 contracts of corn yesterday.

SOYBEANS: Soybean futures opened with a gap lower today and have held onto moderate losses through most of the morning. Aug beans are trading 8-1/2 lower to 8.93-1/2, Sep beans are 9-1/4 lower to 8.98-1/2, and Nov beans are down 9-3/4 cents to 9.10-1/4. Yesterday's Crop Progress report showed that 54% of the bean crop was rated good to excellent vs 53% last week and 69% last year. Emergence is still seen at just 95% and just 22% of the soybean crop has bloomed vs 62% last year. While conditions are improving, most would argue that the soybean crop is progressing at a much slower rate than the corn crop is. Nov beans only traded as high as 9.18-1/4 today and yesterday's low was 9.18-1/2. The Nov contract pushed as low as 9.03-1/2 earlier in the session, but has since rebounded to hold its 10 and 100-day moving average levels. Funds were thought to have sold about 7,000 contracts of beans during yesterday's session.

WHEAT: Wheat markets are down this morning, but showing the lightest losses of the grain complex. Sep Chi wheat is down 2 cents to 5.05-3/4, Sep KC wheat is down a penny to 4.48, and Sep spring wheat is down 1-1/4 cents to 5.31-1/4. Yesterday's Crop Progress report was considered supportive, with winter wheat harvest still running 14% behind average and the spring wheat crop losing 2% in the good to excellent category from last week. Yesterday's reversal type action was very bearish looking, though today's price action has been less so. Sep Chi wheat briefly tested its 50-day moving average support level, but has bounced back above it. Sep KC wheat briefly tested its 10-day moving average support, but bounced back above. Both winter wheat contracts are well off their lows, while the spring wheat contracts have drifted back towards the low end of the day's range. Speculative funds sold about 1,000 contracts of wheat in Chi yesterday.

CATTLE: Cattle markets are drifting lower today with Aug lives down 40 cents to 108.10, Oct lives are down 62 cents to 109.15, and Dec lives are down 57 cents to 113.52. Aug feeders are down 35 cents to 141.30, and Sep feeders are down 75 cents to 141.85. Live cattle have made an inside session today and are still waiting for retail beef values to confirm the anticipated strength. Technically, prices may be a bit overbought since the rally off the recent lows, but sellers have been few and far between. Any selling pressure has been met with buyers and prices have consistently held the previous session's lows.

HOGS: Hog markets are mixed to higher this morning with Aug hogs down 45 cents to 79.65, Oct is up 90 cents to 74.80, and Dec is up 1.10 to 72.90. The best traded Aug contract has essentially been range bound since last Wednesday with prices both holding support, but unable to push into a new lag higher. Oct hogs are showing their first significant trade above their 200-day moving average level since June 21, which is a positive development. Dec hogs are trading above their 20-day moving average level for the first time since April 26. Closes above these levels could spark some short covering. Still, the lack of ability for pork values to rally has been disappointing and has kept a lid on futures rallies despite sharp increases in pig values in China.

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