Stewart-Peterson Market Commentary

Closing Commentary - March 18, 2019

Top Farmer Midday Update 3-18-19

Corn: Corn futures are slipping lower this morning, with May corn down 1-1/2 cents to 3.71-3/4, Jul corn down 1-1/4 cents to 3.81, and new crop Dec corn is down 1 cent to 3.95. Conflicting feelings about U.S./China trage negotiations are keeping corn trade quiet so far this morning. China has apparantly made substantial progess on intellectual properity rights and restricting force technology transfers, two major issues in the U.S./China negotiations. However, other Chinese newspapers are reporting that a deal may not be signed until June. Meanwhile, in the U.S., farmers' selling is slow due to low prices and heeavy precipitation which could lead to a late spring. For the week ending March 14, 795 tons of corn were reported shipped vs. 803,000 tons last week, and 1.44 mil tons the same week last year. Corn shipments are still running about 5.6 mmt ahead of last year's pace. Funds bought about 13,000 contracts on Friday and are thought to be net short about 220,000 contracts.

Soybeans: Soybean futures found sellers on overhead resistance this morning and are currently trading 3-4 cents lower. May beans are down 3-3/4 cents to 9.05-1/2, Jul beans are down 3-3/4 cents to 9.19-1/4, and new crop Nov soybeans are down 3-1/2 cents to 9.39. The Rosario Grains Exchange raised their latest estimate of the Arentine soybean crop this year to 54 mmt vs. a previous estimate of 52 mmt. Although not an emourmous increase, this does add to an already burdumsome world supply. Some are speculating that the cold and wet temperatures in the U.S. may lead to more soybean acres of corn planting gets too late. A total of 842,000 tons of soybeans were reported shipped the week ending March 14 vs. last week's total of 888,000 tons. Shipments for this week last year were recorded at 500,000 tons. Still, shipments for this marketing year are still running about 13 mmt behind last year's pace. Funds bought about 8,000 contracts of beans on Friday and are thought to be net short about 81,000 contracts.

Wheat: Wheat markets are mixed this morning, with winter wheat futures falling lower, while spring wheat futures are rallying. May Chi wheat is down 4 cents to 4.58-1/4, May KC wheat is down 5-1/2 cents to 4.32-1/2, and May Mpls wheat is up 5-1/4 cents to 5.60. Global wheat prices last week saw somewhat of a shakeup, with Russian prices down 1.3%, their lowest level since mid-November, French wheat up 2.4% for the wheat, and U.S. wheat futures were up over 10% due to fund short covering and extreme conditions in the Plains. July Chi wheat made its first weekly higher close last week since the first week of January. 354,000 tons of wheat were reported shipped last week vs. 612,000 tons the previous week, and 445,000 tons the same week last year. Currently, market year shipments to date are running about 11.8 mil tons behind last year's pace. Funds bought about 7,000 contracts of wheat in Chi on Friday and our now net short about 64,000 contracts.

Cattle: Cattle
are mixed this morning as short term supply tightness and negative feedlot conditions continue to clash with winning momentum higher. Apr lives are down 52 cents to 128.57, Jun lives are up 30 cents to 122.22, and Aug lives are up 17 cents to 117.90. Apr feeders are down 92 cents to 146.00, and May feeders are down 52 cents to 147.92. Extreme weather in the Plains last week and into the weekend was very stressful for cattle. High winds and snow in the North and rain in the South will have feedlots very muddy for the next week or so if dry forecasts are realized. Cash trade last week was about 1.00 lower than the previous week. Fund traders trimmed their large net long position by just a bit last week, and beef demand remains impressive. Jun and Aug live cattle contracts have made new highs again today, while the feeder contracts moved back towards the middle of their recent range.

Hogs: Hog markets are mixed this morning following high volatility at the open. Apr hogs are up 82 cents to 69.62, Jun hogs are down 47 cents to 86.05, and Jul hogs are down 50 cents to 88.87. Prices this morning gapped higher, but quickly fell lower to close the gaps. Hog futures are extremely overbought from a technical standpoint, but the large recent purchases of U.S. pork products by the Chinese may still justify a higher movement. Hog futures are still operating with expanded limits today due to limit higher closes in all contracts out to April 2020 on Friday.

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