Stewart-Peterson Market Commentary

Closing Commentary - June 17, 2019
Top Farmer Closing Commentary 6-17-19

CORN HIGHLIGHTS: Corn futures finished 1 to 6 cents higher today as the front month Jul contract was 1-3/4 higher to 4.54-3/4, while Dec corn gained 5 cents to 4.68-1/2. The front month Jul contract saw some reversals off of spreads aggressively bought last week as the dry contracts surged over 37 cents in last week's trade. As we move towards the end of the month, it's very likely that producers may be moving grain into this market, or the possibility of first notice day in approximately 10 days causing some exits on long hedge positions given the recent strength. Otherwise, corn contracts stayed supported as wet weather moved across potions of the eastern Corn Belt this weekend, likely bringing a halt to any anticipated corn planting in those regions. Though late in the game, some producers were struggling to get additional acreage in, and those wet conditions likely brought that to a halt. Weekly crop progress numbers are expecting corn planting to be in near the 90% complete point, but with such difficult weather this season, it's hard to gauge what that 90% number will actually entail. With the strength last week, corn futures continued to climb to their highest price points since 2014 as the possibility of lost acreage and yield tightens the overall supply pile. Weekly export inspections were less than stellar at 25.7 mil bu for last week, well below the 40.7 mil bu needed to meet USDA's export inspections. With prices charging higher over the last few weeks, demand obviously is an area that is starting to fall behind.

SOYBEAN HIGHLIGHTS: Soybean futures were the strength of the grain markets again today as contracts pushed 12 to 16 cents higher. Front month Jul beans gained 16 cents to 9.12-3/4, while Nov beans were 16 cents higher today to 9.39-1/2. Heavy rains across the eastern Corn Belt had traders concerned regarding potential acreage for soybeans to be planted here this spring. Crop expectations are for 80% of this year's bean crop to be underground as of last week, which still leaves a large portion unplanted as we move later into the month of June. Forecasts are staying wet across those regions again this week, which will limit planting progress, as well as maybe effecting crop quality. The USDA has not made any adjustments on the soybean crop as of the last set of Supply and Demand reports with likely reductions for acreage, as well as potentially yield occurring as we move into the Jul numbers. With the soybean market still holding large on managed money short positions, those short sellers are moving to the sidelines and covering those positions with the anticipation this year's bean crop being smaller. Weekly soybean inspections were 24.8 mil bu, this was below the expected pace needed to reach USDA's export estimates for the year. With prices surging, demand continues to be an area effected overall.

WHEAT HIGHLIGHTS: Chi wheat futures finished slightly higher today as contracts saw mild gains. The front month Jul contract was up 1 cent to 5.39-1/2, while Sep Chi was up 3/4 of a cent to 5.42. Weakness was seen across the other classes of wheat as the Jul KC hard red winter wheat contract was down 3/4 of a cent to 4.75-1/2, and hard red spring wheat in Jul was down 3 cents to 5.60-1/4. Chi wheat futures likely were tied to other cash grains as prices surged higher and those markets brought Chi wheat futures a long width for mild gains. KC contracts are likely seeing pressure as winter wheat harvest is starting to wrap up across the southern Plains, despite forecasts for heavy rains across the northern eastern parts of that belt. Otherwise, harvest should be progressing relatively well in those areas despite maturity also lacking overall. While concerns regarding the winter Wheat Belt with heavy rains, beneficial grains may be moving across spring wheat areas, which are likely to show steady to strong conditions continuing for that spring wheat crop. Weekly USDA export inspections were softer at 13.8 mil bu of wheat scheduled for shipment during the week of June 13. This is below the necessary pace to reach USDA's export estimates for the 2019/20 crop year. Current overall inspection pace for 2019/20 is staying neutral, and the wheat market will likely stay as a follower of other grains as harvest continues to ramp up.

CATTLE HIGHLIGHTS: Cattle futures made a nice bounce today, though were unable to take out nearby resistance. Jun lives were up 67 cents to 109.45, Aug lives were up 1.35 to 105.62, and Oct lives were up 1.22 to 106.70. Aug feeders were up 1.40 to 136.92, and Sep feeders were up 1.37 to 137.17. Choice beef values were closed $0.13 higher on Friday afternoon to $222.23 and were up another $0.42 this morning to $222.65. Cash trade seen on Friday was negative, with trading KS at 110, trading NE at 112 to 113, and trading TX at 110 to 112. Slaughter last week was 2.6% higher than this same week last year, and beef production was 1.5% higher than this same week last year. A setback early in the session in the corn markets was positive for cattle today. Feeders caught a bounce on cheaper feed, which also allowed the live cattle markets to creep higher. The best traded Aug live cattle contract traded up to its 20-day moving average level, but was unable to close above it. Oct live cattle made a bullish outside day, closing above its 20-day moving average level. Aug feeders made a bullish outside day as well, but were unable to break through their 10-day moving average support levels.

LEAN HOG HIGHLIGHTS: Hog markets made triple digit advances today, with Jul up 1.70 to 83.05, Aug was up 1.62 to 82.25, and Oct hogs were up 1.67 to 76.77. The CME lean hog index was down 11 cents to 79.46. Carcass cutout values were up 20 cents on Friday afternoon to 83.21, but were down 43 cents this morning to 82.78. Hog slaughter last week totaled 2.431 mil head, up 9.9% from this same week last year. Due to heavy weights, pork production for the week was up 12.3% from the same week last year. Overnight, China's national spot pig price was up 2.57% from Friday. For the month, China pig prices are up 6.65%, up 20.13% year to date, and up 40.6% from a year ago. Despite the triple digit gains today, today's session did not bring about any reversals. Trade today took place within Friday's range and the trend is still lower. Futures are still oversold at this time.


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