Top Farmer Closing Commentary 4-12-19

CORN HIGHLIGHTS: Corn futures ended quietly, but in positive territory with gains of 1/2 to 1 cent as May led today's quiet session, closing at 3.61. New crop Dec closed at 3.89, up 1/2 cent and down 2 cents for the week. Front month May lost 1-1/2 cents for the week. From a news perspective, this week didn't have much to offer. The Supply and Demand report released on Tuesday, April 9 was viewed as mostly neutral and prices reacted as such. Less than great export sales yesterday were negative for price, but uncertainty with weather as another round of cooler and above normal rain for next week is expected. Yet, with funds remaining so aggressively short, estimated at 250,000 contracts, it is apparent they're not betting on wet weather as a problem, at least not yet. Planting delays are likely one of the variables that the market has overcome due to increased machinery capacity and farmer ability to plant nearly around the clock. Nonetheless, conditions are not ideal.

SOYBEAN HIGHLIGHTS: Soybean futures ended about as quietly as you can with both front month May and Jul futures closing unchanged, while Sep lost 1/4 of a cent, and Nov down 1/2 at 9.27-3/4. For the week, May soybean futures lost 3-3/4 cents, and new crop Nov lost 5 cents for the week. Soybean meal finished with slight gains, while soybean oil established small losses. There wasn't a whole lot of new news to drive prices today. Support comes from a firmer stock market, as well as higher energy prices. A slightly weaker dollar today may have provided some additional support. In the southern hemisphere, the harvest in Brazil is wrapping up. Export out of Brazil, according to the International Grain Council, are expected to total 9 mmt, which would be down from last year's 10.3 mmt. We believe this is mostly due to less inputs from China as ASF continues to plague its hog herd. Cool and wet weather expected for the next week could manifest itself from the idea of some corn acres switching to beans. This too could be viewed as a negative.

WHEAT HIGHLIGHTS: Wheat futures rallied today in both KC and Chi, finishing anywhere from 2 to 4 cents higher as May Chi led today's gains, closing at 4.64-1/2. This compares to last week's close at 4.67-3/4. From a week to week perspective, the market just isn't making much of a move. Yet, the 40-day moving average continues to hold prices in check with May futures again running out of steam at this critical indicator. However, should prices move above the 4.65 level in May, then expect a retracement to near 4.88. Mpls was down a couple of cents by the close. We were a bit surprised considering heavy snow fell in parts of the Spring Wheat Belt and some of these acres may not likely get planted.

CATTLE HIGHLIGHTS: Cattle markets closed higher today, finding some late session buying on poor weather for feedlot performance. Apr lives closed 55 cents higher to 126.55, Jun lives closed 1.02 higher to 121.45, and Aug lives closed 82 cents higher to 118.20. Apr feeders were steady at 145.42, and may feeders were up 65 cents to 150.50. Choice beef was down 22 cents yesterday afternoon to 228.83, and down another 10 cents this morning to 228.73. Cash cattle traded in Nebraska today so far at 127.28, steady to 1.00 higher than last week. Winter storms into the weekend will keep cattle from gaining weight in the northern Plains, and forecasts still look cool and wet for the next 10 days. Today's price action was impressive, especially considering yesterday's disappointing finishes. The best traded Jun live cattle contract sold off into yesterday's close and toppy looking price action. Today though, prices held their 10-day moving average support leve and pushed through and closed above their 20-day moving average resistance level. May feeder cattle closed above their 20—day moving average support level after falling below it on April 10. Aug feeders again approaching contract highs.

LEAN HOG HIGHLIGHTS: Hog markets ended the week on a positive note after some early session pressure. Apr hogs went off the board 7 cents higher today to 79.30, Jun hogs closed 80 cents higher to 98.50, and Jul hogs closed 35 cents higher to 101.35. The CME lean hog index was up 7 cents today to 79.36. Carcass cutout values closed 49 cents higher yesterday afternoon to 84.33, their highest value since June 9. Carcass values were up another 2.25 this morning to 86.68. Pork values are being supported by enormous export sales reported yesterday. China accounted for 77,732 mt of the U.S. pork sales this week. This is 2-1/2 times bigger than China's previous weekly purchase record of just 31,200 mt in July 2014. Keep in mind that Chinese buyers are still paying a 62% tariff on all of its pork. Price action today was impressive, with futures finding sellers initially, falling down in nearby support at the 10-day moving average levels, and then springing back up to close moderately higher. Hog markets have been volatile this week, so the price action and positive closes today were goo to see.

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