Stewart-Peterson Market Commentary

Closing Commentary - August 16, 2018

Top Farmer Midday Update 8-16-18

CORN: Corn futures are up 3 to 4 cents this morning, with Dec trading at 3.79-1/2. Export sales this week were a negative, with 339,000 metric tons of corn sold for 2017/18 marketing year, down 39% from last week and down 26% from the previous 4-week average. New crop sales of 1.22 million metric tons were down 15% from last week, and down 13% from the previous 4-week average. At this point, ideal forecasts and slow sales data is not enough to keep prices pressured, as news broke late last night that low level trade talks with China are scheduled to begin in late August. In addition, corn futures are finding spillover support from the wheat markets up over a dime.

SOYBEANS: Soybean futures are 22 to 23 cents higher this morning, with Nov trading at 8.91-3/4. Beans are finding strong buying support on headlines that trade talks with China should start in late August. In addition, cargos of U.S. origin soybeans have begun unloading at Chinese ports this week, adding to the positive tone. Export sales data released this morning was negative, with old crop sales of 133,400 metric tons sold last week, down 68% from the previous week and down 52% from the previous 4-week average. New crop sales totaled 586,600 metric tons, down 42% from the previous week and down 24% from the previous 4-week average. While forecasts look just about perfect for adding bushels onto the soybean crop, a positive tone to trade negotiations with China is just too much for the bean market to ignore.

WHEAT: Wheat futures are up sharply this morning, 10 to 11 higher in Chi, 9 to 11 higher in KC, and 8 to 9 higher in Mpls. Export sales data released this morning was very supportive. 803,000 metric tons of new crop wheat were reported sold this morning, up sharply from the previous week and the 4-week average, setting a marketing year high. Old crop sales of 461,600 metric tons were reported sold, up 34% from the previous week and 17% from the previous 4-week average. This total was also a marketing year high. The strength in export data pushed winter wheat futures above their 20-day moving average levels but have since fallen slightly back. Spring wheat futures are trying to stabilize after recent losses of over 40 cents.

CATTLE: Cattle futures are slightly higher this morning, trading in choppy ranges and currently putting in inside sessions. Oct live cattle are up 22 cents to 109.22 and Sep feeders are up 55 cents to 149.70. Oct live cattle futures briefly prodded below their 50-day moving average this morning but have since recovered and are trading right around the opening prices. Feeder cattle contracts are currently putting in a test of their 10-day moving average, which they have not been able to close above since before the current pennant consolidation formation began on October 6. There is still a negative looking head-and-shoulders formation on the feeder cattle charts and the trend is lower, but some technical advances higher may be in progress.

HOGS: Hog futures are up sharply this morning, gapping up and briefly touching limit-up gains. Oct hogs are up 2.70 to 55.17 and Dec hogs are up 2.85 to 52.30. Prices are trading above their 50-day moving average levels for the first time since the middle of June, and a close above would be significant and cause short covering action. Weights are shrinking, and slaughter is coming down as well, all supportive. However, fundamental support remains somewhat limited as pork cutout values reached their lowest price yesterday afternoon since April 27 and the CME Lean Hog Index was down sharply again today. Today's buying appears to be technical short covering.

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