Stewart-Peterson Market Commentary

Closing Commentary - November 21, 2018

Top Farmer Midday Update 11-21-18

Corn: Corn futures have seen two-sided trade so far this morning, with prices currently trading approximately 1/2 cent higher. Dec contract was up 1/2 cent to 3.61-3/4, while Mar was up 1/4 cent to 3.72-1/2. It is another quiet news day as the market is working towards the Thanksgiving Day holiday and traders are possibly squaring positions since being softer for the past handful of days. In this morning's trade, strength in the soybean market is also providing some lift underneath the corn market. The corn market has failed to find traction so far this week being pressured by outside markets as the stock and crude oil markets have aggressively fallen off their most recent levels. Today, seeing some rebound in those outside markets may also be helping to provide some buying strength in corn futures. Demand will stay as the focus moving forward now that harvest is in its final 10%. Earlier this week, nearly an 8 million bushel cancellation of corn to unknown destinations brought some potential concerns into demand at this time. Friday, we will see weekly export sales which should stay as a supportive factor under the market.

Soybeans: Soybean futures are trading 4 to 6 cents higher with the Jan contract up 6-1/4 to 8.87-1/4, while Mar beans are up 6-1/2 to 9.01. Soybean futures have traded both sides of the range today, but some more positive news about Chinese/U.S. relations may be providing the support underneath the market. Late yesterday, U.S. National Economic Council Director, Larry Kudlow, stated that China would be looking at a settlement and expressed optimism that this could occur soon. That is also bringing some softening of short positions as we go into the holiday weekend. Friday will see another weekly export sales report, which are running well below expectations of USDA pace and could provide some selling pressure on Friday's market overall. In the short term, beans continue in a sideways choppy fashion that it's traded in for nearly two weeks.

Wheat: Wheat futures are currently trading softer with Chi contracts down 1 to 2 cents. The Dec Chi wheat contract is down 1-3/4 to 4.99, while Mar is down 2-1/2 to 5.06. We are seeing weakness in the KC hard red winter down 3-1/4 cents in Dec to 4.69-3/4, while Mpls spring wheat is seeing slight gains. Demand stays as the main concern overall in the wheat market, as supplies globally are currently staying ample at this window. Until we see further development of demand to U.S. shores, wheat prices will have a difficult time finding much traction into the upside. Friday's weekly export sales numbers will likely restate demand concerns which should keep prices in consolidation to a lower fashion here in the short term.

Cattle: Cattle futures are trading slightly firmer with contracts up 15 to 40 cents. Front month Dec cattle are 0.225 cents higher to 115.925, while Feb cattle are 0.30 cents higher to 122.005. Cattle futures are in choppy fashion as the market may be squaring positions going into the cattle on feed numbers that will be announced at 11:00 CT today. Expectations are for total cattle on feed to be approximately 104.5% over last year, which would be one of the largest supplies of cattle in the feed lots since 2011. October placements are expected to be in line or slightly below last year, as October is one of the heavier placement months. Cash trade has stayed relatively undeveloped again today, and softening of retail values at mid-week does have the market concerned regarding potential that retailers have met their holiday demands.

Hogs: Hog futures are trading with modest losses. Front month Dec contract is down 0.425 cents to 58.50, while Feb hogs are down 0.95 cents to 60.175. Hog futures is seeing some additional follow-through selling after yesterday's triple-digit push lower on front month contracts, as positions are squaring going into the Thanksgiving holiday. Cash trade is staying steady to lower for most regions, and the weakness seen in retail values has the market concerned regarding retail demand moving into the end of the year. Slaughter numbers are staying ample, which keeps pressure on the market overall. And with some turn in the market front month charts technically, we could see some additional long liquidation as we move through the Thanksgiving holiday.




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