Top Farmer Midday Update 4-15-19

Corn: Corn futures are slightly higher this morning, with May corn up 1-1/2 cents to 3.62-1/2, Jul corn is up 2 cents to 3.71-1/2, and Dec corn is up 1-1/2 cents to 3.90-1/2. Corn is likely finding some support this morning for forecasts of 1-1/2 to 2-1/2" of rain for pats of Iowa, Minnesota, Wisconsin, and Michigan. Heavy rains are also seen in Illinois, Indiana, and the Delta. The effects on planting pace though are still undetermined as 6-10 day forecasts do show above normal temperatures through the Corn Belt and mixed precipitation levels. Brazil and Argentina FOB corn offers are still cheaper than the U.S. keeping American exports moving at a slow pace. As of last Tuesday afternoon, speculative funds were short a record 271,746 contracts. During Friday's session, funds bought about 4,000 contracts of corn and are now thought to be net short about 268,000 contracts.

Soybeans: Soybean markets are moderately higher this morning, with May up 4-1/4 cents to 8.99-1/2, Jul beans are up 4-1/2 cents to 9.13, and Nov soybeans are up 3-3/4 cents to 9.31-1/2. U.S. Treasury Secretary Minuchin said on Saturday that the U.S. and China are getting close to the final round of concluding issues regarding a trade deal. However, news about China's pig herd in March was down 18.8% from last March raises questions about Chinese soybean demand, even after a deal is done. Argentina's soybean harvest is said to be about 17% complete, up 10.5% from a week earlier, but 6.7% behind last year's pace. The precipitation this week could further influence acreage decisions for this spring, but the actual effects of these rains are still unknown. Funds sold about 2,000 contracts of beans on Friday and are thought to be net short about 75,000 contracts.

Wheat: Wheat markets are soft this morning, with Jul Chi wheat down 4-3/4 cents to 4.63-3/4, Jul KC wheat is down 6-1/4 cents to 4.35, and Jul spring wheat is up 1/4 of a cent to 5.36-1/2. Egypt tendered for optional origin of wheat last week. While U.S. wheat was the cheapest, expect of freight costs caused the U.S. to lose out on the business. Spring wheat planting progress will continue to struggle due to the recent storm in the Dakota's and Minnesota. However, funds are still record short in the spring wheat market keeping a lid on any sharp rallies. Sovecon raises their Russian wheat production estimate to 83.4 mil tons vs. 71.7 mil tons for this past year. Funds bought about 4,000 contracts of wheat in Chi on Friday and are thought to be net short about 49,000 contracts.

Cattle: Cattle markets are missed this morning in choppy trade. Apr lives are down 25 cents to 126.30, Jun lives are up 2 cents to 121.47, and Aug lives are down 2 cents to 118.17. Apr feeders are down 12 cents to 145.30, and May feeders were down 22 cents to 150.22. Better than expected cash trade on Friday, along with steady beef prices, have kept the cattle prices supported. Last week's storms were difficult for cattle in feedlots, but forecasts look to benefit feedlot conditions over the next two weeks. Cattle markets, though not exactly flying higher this morning, are holding onto nearby support levels with some help from the hog markets and speculation that China could buy U.S. beef when a trade deal is worked out.

Hogs: Hog markets are slightly higher in choppy trade this morning, with Jun up 27 cents to 98.77, Jul up 42 cents to 101.77, and Aug up 52 cents to 101.90. China's pig herd in March was down 18.8% from last March, and China's sow herd in March was down 21% from last year. Expectations for China's drop in pork production are continuing to grow, with estimates as high as 30%. Pork prices continue to rally, and with the lean hog index sputtering recently, packer margins are beginning to firm up again. This should set up the hog markets for another leg higher at some point. Still, recent contract highs are holding as resistance and prices may need another spark to push through those levels. Meanwhile, traders will be watching headlines for U.S./China trade news very closely.

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