Stewart-Peterson Market Commentary

Closing Commentary - September 17, 2018
Top Farmer Midday Update 9-17-18

CORN: Corn futures are trading 2-1/2 cents lower this morning with Dec contracts trading at 3.49-1/4, Mar at 3.61-1/4 and May at 3.69-3/4. Corn markets made new lows today with the Dec contract reaching as low as 3.48-1/2, one tick lower than the previous low set on 9/13. The funds are holding nowhere near an extreme short position; selling interest may dry up soon as corn stocks will be much tighter this year than in past years. This week's USDA Grain Inspections report was delayed.

SOYBEANS: Soybean futures are lower this morning, with Nov down 3-3/4 cents to 8.26-3/4. Jan is down 3-3/4 cents to 8.40-1/2, and Mar is down 3-1/4 cents to 8.54. Trade rumors have been the main sources of information flow for today's session. The U.S. is expected to roll out another round of tariffs early this week, and there is speculation that China could reject the latest offer for trade negotiations. These are rumors, and without concrete information, the state of the U.S./China trade war is unclear. Meanwhile, soybean stocks are inflating as a big crop appears to be getting bigger. Export inspections data is delayed and will be reported when released.

WHEAT: Wheat futures are mixed this morning with Dec Chi contracts down 3/4 cent to 10-3/4. Dec KC is down 1 cent to 5.15-1/4, and Dec Mpls is up 3-3/4 cents to 5.76. On last Friday's Commitment of Traders report, data indicated that speculative fund traders liquidated over 24,000 long positions. While funds historically prefer to be short wheat markets, and they are currently nowhere near an extreme short position, selling interest may be drying up in the face of much lower world wheat production expected for this year. Futures contracts are likely oversold on a short term basis, which could draw some buyers.

CATTLE: Cattle futures are mixed to lower this morning, as futures try to collect themselves from last Friday's huge strength. The nearby Oct live cattle contract is down 7 cents to 113.72, Dec is up 7 cents to 118.12 and Feb is up 12 cents to 122.02. Feeders are down slightly, with Sep down 37 cents to 157.05 and Oct down 32 cents to 158.55. Cash trade reached as high as 109 to 110 late Friday afternoon. Questions about future pork availability due to hurricane disruptions and the potential for spreading African swine fever in China are helping beef prices. Technical indicators are giving overbought readings, which could produce some pressure today or early this week. However, Friday's surge out of recent ranges is a positive development.

HOGS: Hog futures are mixed this morning, as speculators continue to drive price movement in the wake of Hurricane Florence disruptions and the African swine fever outbreak in China. Oct hogs are up 15 cents to 56.37, Dec hogs are down 1.77 to 54.87 and Feb hogs are down 1.32 to 64.35. Price action so far today has been interesting, particularly for the Oct contract. Oct futures posted declines as much as 2.02 but have since rallied back. Deferred contracts, though down hard, are still holding some significant moving average support levels as prices stabilized within new trading ranges.

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