Stewart-Peterson Market Commentary

Closing Commentary - December 11, 2018

Top Farmer Midday Update 12-11-18

Corn: Corn futures are mixed to lower this morning ahead of today's Supply and Demand report. Dec corn is up 3/4 cent to 3.75, Mar corn is down 3/4 cent to 3.83-1/4, and May is down 1/2 cent to 3.90-3/4. Prices are just off the lows today, but trading ranges have been restricted to less than 4 cents in most contracts. Today's USDA Supply and Demand report is not expected to show dramatic changes to the corn balance sheet, but still, markets are quiet at this point bracing for volatility. During yesterday's session, funds sold about 7,000 contracts of corn and are now long about 47,000 contracts.

Soybeans: Soybean markets are slightly higher this morning, with Jan, Mar, and May beans all up 3 cents to 9.12-3/4, 9.25-3/4, and 9.38-1/2 respectively. China and the U.S. are pushing ahead with trade talks despite rumors of recent tension. A phone conversation between the two sides today was said to push the time table forward and further developed a road map for the next stage of work. Details were scarce. Price action has been quiet but positive. Prices initially traded down to their 10-day moving average support levels and then rallied back up on the positive trade news. During yesterday's session, funds sold 5,000 contracts of beans and are now thought to be short about 20,000 contracts.

Wheat: Wheat markets are choppy this morning, with Mar Chi wheat down 1-3/4 to 5.23-1/2, Mar Mpls wheat down 1/2 cent to 5.09-3/4, and Mar Mpls wheat is up 1-3/4 cents to 5.77. Today's trade looks to be mostly technical in nature, after sharply higher closes on Friday afternoon left prices overbought in the short term. Winter wheat futures are holding nearby support at the 50-day in Chi and the 10-day in KC. Spring wheat futures fell lower yesterday afternoon but closed above support at the 10 and 20-day moving average levels. Prices have held those levels so far today but are 3 to 4 cents off the day's highs. Funds sold about 3,000 contracts of Chi wheat yesterday and are now short about 27,000 contracts.

Cattle: Cattle markets are slightly higher today, with the Dec lives up 35 cents to 117.92, Feb lives up 37 cents to 121.57, and Apr lives up 32 cents to 123.92. Feeder cattle are putting in a very nice session so far today, with Jan up 1.97 to 147.00 and Mar up 1.60 to 144.35. Live cattle prices initially sold off this morning to some moving level support levels. The best traded Feb contract surged lower down to its 20-day moving average and has since rallied back above its 10 and 50-day moving average levels. While lives are up less than 50 cents, price action is impressive. Feeder markets are surging higher, with the Mar contract trading above its 20-day moving average for the first time since November 29. Retail beef values have been strong recently, especially the higher quality cuts. In addition, there is growing talk that China could increase purchases of U.S. beef products.

Hogs: Hog markets are down today, with Dec down 30 cents to 54.42, Feb down 1.57 to 65.25, and Apr down 1.07 to 71.00. The Feb contract is trading below its 20-day moving average for the first time since November 28. A close below that would be the first since November 15. Pressure today is likely due to weakening carcass values the past few sessions. However, hogs are still well within their recent ranges in a textbook trader's market.

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