Stewart-Peterson Market Commentary

Closing Commentary - October 23, 2018

Top Farmer Midday Update 10-23-18

CORN: Corn futures are slightly lower this morning with Dec down 1/4 cent to 3.69-1/4 and Mar down 1/2 cent at 3.81-1/4. Both Dec and Mar have tested resistance at the 100-day moving average levels, but outside market pressure has so far limited their advance. The U.S. corn harvest is running 49% complete, versus 37% a year ago and 47% on average. This week should have no major precipitation events, keeping harvest moving along and pressure on markets. Crude oil markets have broken some support levels this morning, keeping pressure on corn as well. During yesterday's session, funds bought 8,000 contracts of corn, leaving their net long position about 3,000 contracts.

SOYBEANS: Soybean futures are slightly lower this morning, with the Nov contract down 1-1/4 cents to 8.57-1/4 and Jan down 1-1/2 cents to 8.71. The Nov contract briefly fell below its 50-day moving average support but has since bounced back above. Clear weather this week and sluggish demand should limit any major bounces despite this week's solid export inspections total. Many are also expecting the USDA to lower the demand estimate next month. Funds bought an estimated 2,000 contracts of soybeans yesterday, leaving their net position short about 51,000 contracts.

WHEAT: Wheat futures are lower this morning, with Dec Chi down 1 to 5.07, KC down 1-3/4 to 5.06 and Dec Mpls down 2 to 5.83-1/2. So far this morning, the Chi Dec contract has held its nearby low from 10/2 at 5.05-1/4. This is also support at the lower Bollinger band. Today's weakness is also due to poor weekly export inspection data, and just recently, Ikar increased their Russia export estimate from 32.5 million tons to 33 million tons. Funds sold about 4,000 contracts of Chi wheat yesterday, leaving their net position somewhere around short 24,000 contracts.

CATTLE: Cattle futures are lower this morning with Oct lives down 57 cents to 112.22 and Dec lives down 1.12 to 116.95. Feeder cattle markets are lower as well. The best traded Dec live cattle contract has fallen below support at the 10 and 20-day moving average levels. Strong beef values and a somewhat supportive Cattle on Feed report are likely limiting losses, but the on feed supply reported last Friday was the largest ever for the month of October and is likely contributing to some selling action. At the time of this writing, the Dec e-mini Dow Jones futures contract is down about 350 points, or 1.39%. Stock market volatility does not inspire confidence in cattle traders and is likely responsible for most of the pressure today.

HOGS: Hog futures are making a solid move higher with Dec up 1.57 to 54.75 and Feb up 1.10 to 61.40. Both contracts have broken resistance at the 100-day moving average levels and are trading just off the highs of the day. Yesterday's bounce out of oversold territory may be seen as the market making a short term low, sparking some more short covering. Yesterday's Cold Storage report was bullish with just a 1.3% gain in pork inventory versus the average jump of 4.8%.

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