Top Farmer Midday Update 3-20-19

Corn: Corn futures are low this morning, in very quiet trade within yesterday's ranges. May corn is down -1/2 cents to 3.69-3/4, Jul corn is down 1-1/2 cents to 3.79-1/4, and Dec corn is also down 1-1/2 cents to 3.93-3/4. Conflicting opinions about the current state of U.S./China trade negotiations should keep price action choppy. There were reports yesterday that China has been backing away from previously made concessions, while other sources were reporting that U.S./China negotiations were in their final stages. Nonetheless, USTR Lighthizer and Treasury Secretary Minuchin will be flying to Beijing for negotiations next week with negotiations in Washington coming the following week. Ethanol prices are near 7-month highs due to logistical issues created by flooding. Technical price action today has been very quiet with the Dec futures contract still holding support at the 24% retracement of its May highs to Sep lows. On Tuesday, funds sold about 7,000 contracts of corn, and their thought to be short about 236,000 contracts.

Soybeans: Soybean futures are slightly lower this morning, with May down 1-1/2 cents to 9.02-1/2, Jul is down 1-1/4 cents to 9.16-1/4, and Nov is down 3/4 of a cent to 9.37-1/2. Soybeans found sellers today after three unsuccessful tests in a row of their 20-day moving average resistance levels. Despite a negative opening, prices have been able to hold tight near their recent ranges. Flooding conditions in many parts of the country, along with forecasts for more rain over the next week or so is creating more concern that the anticipated acreage shift this year to corn may be somewhat restricted. This could add to an already bearish supply and demand setup. Speculative funds sold 4,000 of beans yesterday and our thought to be net short about 88,000 contracts.

Wheat: Wheat markets are moderately higher today, but tempting to push though some overhead technical resistance on positive fundamental developments. May Chi wheat is up 2-1/2 cents to 4.59, May KC wheat is up 3-1/4 cents to 4.39, and May Mpls wheat is up 2-1/4 cents to 5.67-1/2. Spring wheat continues to benefit from flooding conditions in North and South Dakota. Chances that Spring Wheat planting will be delayed is growing significantly. Winter wheat futures are up today as well, partly on crop condition concerns from possible damage done with storms last week. In addition, President Trump met with the Brazilian President Bolsonaro yesterday with agricultural trade a central issue. Brazil will now allow the U.S. to export 750,000 tons of U.S. wheat to Brazil with no tariffs. Brazil is the largest wheat importer in South America, so any business that the U.S. is able to earn would be very positive. During yesterday's session, funds sold about 2,000 contracts of wheat in Chi and are thought to be net short about 70,000 contracts. As of the most recent available data, funds are holding an all-time record net short position for combined wheat contracts.

Cattle: Cattle markets are mixed to mostly higher this morning, with Apr lives up 22 cents to 129.35, Jun lives up 15 cents to 122.87, and Aug lives up 17 cents to 118.90. Apr feeders are down 35 cents to 147.45, and May feeders are up 97 cents to 151.50. Weight and production continue to drop due to flooding conditions, particularly in NE. Flooding will also impact placements down the road as well. Beef values continue to rally, also providing demand side support. Aug lives are moving towards the higher end of their most recent trading ranges, Jun and Aug are moving steadily higher within yesterday's ranges, and the Oct and Dec live cattle contracts have made new highs yet again. Cattle prices are also drawing spillover support from the hog markets, up sharply again today.

Hogs: Hg futures are making triple digit gains again today, with APR up 1.72 to 72.55, Jun is up 1.62 to 88.87, and Jul hogs are up 1.87 to 195.00. Apr hogs are trading at their highest levels today since November 23, while Jun, Jul, and Aug contracts have pushed above Monday's range to make new contract highs. Retail pork values are quickly gaining value in production and IA and MN may be contracting due to logistical issues caused by flooding. Technically, futures are severely overbought, this does not necessarily mean prices are ready to turn around. There is plenty of uncertainty currently being traded due to African swine ever to keep the trend higher.

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