Top Farmer Closing Commentary 9-10-19

CORN HIGHLIGHTS: Corn futures ended the day on a strong note gaining 6 to 7-3/4 cents as Sep led today's rally closing at 3.48-1/2. Dec futures closed 7-1/4 higher at 3.61-1/2, running into resistance at the 10-day moving average. Today's high was 3.62-1/2. This is the highest close in Dec corn in five sessions. Strength in agriculture commodities in general was noted today with beans up 12 to 14 cents, wheat up 8 to 10 in Chi, and livestock markets making a very strong reversal finishing with solid gains. As of this writing, the U.S. was trading with small gains. A drop in crop ratings of 3% in the good to excellent category, now 55%, and an increase in the poor to very poor category of 1% now 14%, seemed to be a catalyst to help give prices a boost. Some forecasters are starting to hint at cooler temperatures toward the end of the month, but looking that far out we wouldn't rely too much on any forecast. The short term forecast continues to suggest temperatures are likely to be normal to above normal over the next 10 days. 89% of the crop is in the dough stage vs a 5-year average of 97%. 55% dented compares to 77% on average. 11% mature compares to 24% on average. The general signal is that with bouts of rain in the northern Midwest and very gloomy, cloudy skies, the crop may need additional time to mature. This may have contributed to today's gains. Additionally, there was recent export activity with sales to Mexico in a more upbeat perspective that China could be a buyer of U.S. products as a good faith move.

SOYBEAN HIGHLIGHTS: Soybean futures had a strong session today gaining 9-1/4 cents on Nov 2020 to 14-1/4 cents on Nov 2019, which led today's rally closing at 8.72. Today was an impressive close and the highest in three sessions, with a solid close above the 21-day moving average. As Thursday approaches, look for volatility potentially to pick up. For now, the market remains somewhat quiet in a tight trading range as the trade tries to determine whether recent weather is beneficial and increases yield or subtracts from yield. Cash prices are not necessarily offering any strong directional bias. For the moment, we stay short, but as indicated in the past, we're not necessary married to this position. Keep a stop on your short positions. Likely some short covering was noted. Gains in meal of 4.00 and soybean oil gaining 8 to 12 cents also provided underlying support. It was a good day for agriculture products as a whole and this despite the U.S. trading steady to slightly higher.

WHEAT HIGHLIGHTS: Wheat futures had another up day with solid gains on all three exchanges. Wet conditions, particularly in the northern Plains continues to hamper harvest for spring wheat and this market finished anywhere from 7 higher in Dec to 10-1/4 higher in Sep. KC gained 2 to 5-3/4 and Chi 8-1/2 to 10 cents as Sep led today's gains. Chi Dec contract broke above channel line resistance yesterday with a solid close and again today. We're beginning to become impressed and technical objections would now suggest that a potential 1-2-3 bottom is in place, which provides topside objective near 5.00. If that were to occur, this would push prices through the 40, 50, and 100-day moving average and likely uncovering buy stops. A good export pace to date is also noted.

CATTLE HIGHLIGHTS: Cattle markets had a very strong day today finding sharp buyer interest midway through the session to stabilize after a few rough sessions. Oct lives closed 1.95 higher to 96.15, Dec lives were up 2.05 to 101.22, and Feb lives were up 2.35 to 108.42. Oct feeders were up 1.22 to 131.05 and Nov feeders were up 1.90 to 130.70. A few head of cattle traded yesterday at 97.00, 3.00 below last week's trade and a poor start to the week. The market may be beginning to become concerned about lower slaughter capacity in the near term, but packers are making huge profits right now and should keep the chain speed running accordingly. Choice beef closed 36 cents lower this afternoon to 226.95 and was down another 63 cents this morning to 226.32. The best traded Oct live cattle contract began the day with lower trade despite the oversold technical indicators. The surge higher later in the day has pulled stochastics out of oversold levels which can be considered a buy signal. Near term resistance should come around 98.00 or the 10-day moving average level. Oct feeders briefly tested their 10 and 20-day moving average resistance levels today, but were unable to close above them. This could slow down the momentum currently pointing higher, but nonetheless, today's session was impressive.

LEAN HOG HIGHLIGHTS: Hog markets made higher closes today after some sharply lower trade early in the session. Oct hogs closed 12 cents higher to 62.72, Dec hogs closed 1.82 higher to 61.77 and Feb hogs were up 87 cents to 69.15. China's national average spot pig price was unchanged overnight, but was still up 2.9% so far for the month of August and is up 107% year to date. The CME lean log index was down 94 cents today to 63.75 and carcass cutout values made their lowest close yesterday since July 12, down 1.86 to 70.72. ASF has continued to spread across Asia with Manila being the most recent of major cities to confirm its presents. However, today's bounce seems to be mostly technical in nature with the best traded Oct contract trading as low as 59.90, but then recovering into the later parts of the session. Oct futures briefly tested their overhead resistance at the 10 and 20-day moving average levels, but were unable to push through. Dec hogs made a bullish outside day, trading as low as 57.77 this morning and then closing nearly 2.00 higher. The Dec contract also appears to have a triple bottom formation.




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