Stewart Peterson Midday Update 7-24-19

CORN: Corn futures are trading just slightly higher so far this morning, with Sep up a penny to 4.26-1/2, Dec is up 1-1/2 cents to 4.33, and Mar is up a penny to 4.41-1/2. Dec corn traded as high this morning as 4.36-3/4 on continued buyer interest from lower crop conditions, positive U.S./China trade news and weather forecasts beginning to lean on the hot and dry side again. None of those fundamentals were enough to push prices through nearby resistance, with all three nearby contracts unable to push through their overhead 50-day moving average levels for much time at all. Technical indicators are nearing oversold levels or still not proving outright buy signals. The Dec gap at 4.20 is still open and many are expecting a retest. Funds were thought to have about 7,000 contracts of corn yesterday.

SOYBEANS: Soybean futures are trading moderately higher today, with Aug up 7 cents to 8.92-3/4, Sep is up 6-1/2 cents to 8.98, and Nov beans are up 6-3/4 to 9.10-1/2. News yesterday that the U.S. is sending a team of negotiators to China next week was very positive, though soybeans were still unable to muster a positive close. Some traders are expecting goodwill purchases of 2 to 3 mil tons to show up soon. Five Chinese buyers are thought to be exempted from the tariffs in preparation for goodwill purchases. Nov beans are currently trading directly at their 10-day moving average resistance. Prices have already pushed through the 20 and 100-day moving average levels after a back test of the 50-day moving average support level. Funds were thought to have sold about 4,000 contracts of soybeans yesterday.

WHEAT: Wheat markets are higher this morning, with Sep Chi wheat up 9-1/4 to 4.96-1/2, Sep KC wheat is up 8-1/4 cents to 4.39-3/4, and Sep spring wheat is up 4 cents to 5.24-1/2. Sep Chi wheat has put in three consecutive successful tests of its 100-day moving average support level and has some sound buyer interest this morning. Momentum indicators are oversold and there could be some short covering action coming up soon. Egypt bought 300,000 tons of wheat this week from Ukraine, Romania, and Russia. U.S. wheat is still overpriced in the world markets, but rallying corn futures will drag wheat along for the ride. Spring wheat yield potential is up above last year's potential, but below average. The wheat quality council tour calculated an average yield of 43.1 bu per acre on the first of a three day crop tour. Funds sold 1,000 contracts of Chi wheat yesterday.

CATTLE: Cattle markets are very slightly higher this morning, with Aug lives up 12 cents to 109.17, Oct lives are up 20 cents to 110.07, and Dec lives are up 25 cents to 114.50. Aug feeders are up 40 cents to 142.60, and Sep feeders are up 27 cents to 142.72. Technical indicators are overbought in the cattle markets, but lower beef stocks on Monday's Cold Storage report was supportive, in addition to lower weights and expectations for beef values to rally. The best traded Oct contract traded within a nickel of the recent highs made on July 12. A break above 10.22 likely opens up another 1.00 of topside in the short term. Feeder markets retested their 10-day moving average support levels this morning and have so far held above.

HOGS: Hog markets are choppy this morning, with Aug up 10 cents to 86.27, Oct is down 80 cents to 81.00, and Dec is down 2 cents to 79.65. Yesterday's hog closes were very impressive with future breaking through resistance not tested since mid-June. Selling interest today is likely technical in nature as Chinese spot pig prices continue to rally along with domestic pork values. Monday's Cold Storage report was slightly negative.

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