Stewart-Peterson Market Commentary

Closing Commentary - November 20, 2018

Top Farmer Midday Update 11-20-18

Corn: Corn futures are trading mixed with the front month Dec contract unchanged at 3.62-1/4, while Mar is also unchanged at 3.73-1/4. Despite strength in bean and wheat markets, corn futures are failing to find any traction. The USDA put corn harvest at 90% complete versus a 5-year average of 93%. With the majority of weather forecasts looking favorable, harvest progress should continue through the Thanksgiving weekend. Corn futures also saw negative demand news, as unknown destinations cancelled a previous sale of 7.9 million bushels for the current marketing year. Corn futures are currently testing and holding key support levels, which may bring some technical buying if prices can maintain support and strength continues in other markets.

Soybeans: Soybean futures are trading 8-10 cents higher. The front month January contract is up 10 to 8.83-3/4, while Mar is up 9-1/2 to 8.97. With strength in soybean meal and oil products, soybean futures are gaining back half of what they lost in yesterday's trade. The market will likely stay choppy in the short term as the soybean market positions before next week's G20 economic summit and potential trade talks between the U.S. and China. The market saw selling pressure yesterday after current stances seemed to soften. The USDA put soybean harvest at 91% complete, down 5% from the 5-year average. This may be also providing strength with potential tightening of U.S. supplies moving toward the January final yield and production numbers.

Wheat: Wheat futures are currently trading firmer with the front month contract in Chi Dec up 3-1/2 cents to 5.02 and the Mar contract up 3 cents to 5.09-1/2. So far, wheat futures are holding above yesterday's lows and seeing some overall strength despite the current negative technical picture. The USDA put winter wheat planting at 93% complete, and condition scores improved to 56% on good to excellent, up 2% week over week. Despite 93% complete planting, the question of the amount of acreage planted may be supportive the market, as weather conditions this fall have made it difficult to get next year's crop planted.

Cattle: Cattle futures are trading lower, as the front month Dec contract is down 70 cents to 15.45, while Feb cattle are down 65 cents to 119.35. Feeder cattle markets are mixed. Weakness is seen in the front month contracts with Jan down 62-1/2 cents to 146.50. Pressure has been developing across that cattle complex, as prices have been hovering between 40 and 70 cents lower. With limited volume, prices will likely stay in a choppy pattern unless we see direction in cash trade or retail values.

Hogs: Hog futures are trading with moderate losses, as the front month Dec contract is down 1.42-1/2 to 59.60, and Feb hogs are down 1.32-1/2 to 67.70. After two strong days of upside movement, hog markets are seeing profit taking in today's trade, as contracts are back-testing support levels. Focus will stay on the retail values as well as cash trade, which is expected to be steady and supported on strength of retail values the past couple of days. Trade volume is expected to be light, and prices may be poised for long liquidation if news does not merit strength to the upside.

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