Closing Commetary

 

 

 

 

 Market Commentary by Total Farm Marketing 

Closing Commentary - May 28, 2021

 

Top Farmer Closing Commentary

 

CORN HIGHLIGHTS: Corn futures end the day softer with July closing 7-3/4 cents lower at 6.56-3/4 and December 9-1/2 lower at 5.73-1/4.  For the week July closed 2-3.4 cents. This may be hard to believe when there were 2 daily limit moves. December added lost 1-0 cents to for the week. If just viewing weekly closes, it was a boring week of price consolidation. The range in July corn was a weekly high of 6.72-3/4 and low of 6.02-3/4. After Memorial Day weekend, the rubber hits the road. Weather becomes the dominate factor and will decide price direction. Price direction is a combination of fundamental factors (is the crop getting bigger or smaller or demand expanding or contracting), money flow, and technical signals (chart signals/indicators). If there are concerns this year, it will likely come in from of continued dry conditions that started last summer, especially in the Western Corn-Belt. We cannot make much of an argument during last week of May that the crop made or in peril. Yet, futures are at crossroads. We expect crop ratings next week to be good. Recent moisture and a fast-planting start suggest good emergence and if emerged crop is green in color, it will be rated as good or excellent. Cool temperatures may limit growth, but this will be temporary. Ethanol margins remain in the black with tight inventory and expected strong consumer gas usage this weekend and early summer as covid concerns lessen.

SOYBEAN HIGHLIGHTS: Soybean futures closed with moderate losses of 6-1/2 cents in July at 15.30-1/2 and 5-1/2 lower in November at 13.72-3/4. For the week, July gained 4-1/4 cents and November 12-1/4. November futures have closed 13 consecutive months higher. Historically tight carry out provides underlying support which implies weather conditions will need to be near ideal to provide enough inventory for the year ahead. In the very near term, we are seeing some basis decline which would imply that processors are likely more hand to mouth. This may imply they have enough perceived inventory purchased or that for the moment they are unwilling to pay high prices chasing bean prices higher which also makes sense considering the planting pace is above the five-year average. Soybean oil continues to support the bean complex as tight world vegetable oil supplies are supportive into the summer of 2021. Soybean meal however continues to trade in a consolidation mode near 400 per ton, where it has spent most of this year. There could be some frost concerns yet as of this writing, not likely on a large enough scale to affect futures prices. Markets are closed on Monday in observance of Memorial Day.

WHEAT HIGHLIGHTS: July Chi down 12 3/4 cents at 6.63 1/2 & Dec down 11 1/2 cents at 6.74 .3/4. July KC wheat down 13 cents at 6.13 1/4 & Dec down 13 cents at 6.32 1/4. For the week, July Chicago wheat & KC both lost 10 3/4 cents for the week. As we warned yesterday, today we saw traders playing it safe ahead of a 3-day holiday and profit-taking took place in wheat, 2900-3200 contracts were closed today. Black Sea research firm SovEcon cut its 2021 Russian wheat crop forecast from 81.7 mmt to 80.9 mmt – dry weather once again putting crop production in jeopardy. Russia’s winter crop has received plenty of moisture, but the spring wheat areas have not. Combine this with our own spring wheat concerns here in the US – that market should be closely monitored and could ultimately lend support other wheat futures by nothing more than association. Expanding drought & freeze concerns in the northern plains were not traded today but that doesn’t mean they aren’t there. We will see what Tuesday’s crop progress says, the outlook for the Dakotas is not expected to improve, with 31% of North Dakota crop only rated good/excellent. Next Wednesday, June 2nd – Russia will implement another higher export tax to continue to try and curb inflation costs.

CATTLE HIGHLIGHTS: Live cattle futures had a quiet session and prices in the front end of the market drifted lower into the close.  June cattle lost .475 to 115.875, and August were .825 lower to 118.600.  Cattle futures failed to find any footing this week, and June ended the week 1.800 lower, and August dropped 2.325 for the week.  The cattle market lacks bullish news over all, and today’s close is concerning.  August cattle drifted under key moving average support on the close, which may open the door for additional pressure to start next week.  Cash cattle trade was basically done for the week, with the exception of some clean up trade. This week trade has Southern live deals marked at $116 to $120, mostly $119 to $120, steady to $1 higher than last week’s weighted averages. Northern dressed deals have a range of $187 to $192, mostly $191, generally steady with last week.  June futures are trading at a discount to cash, and that should help support the futures prices.  Upward momentum in carcass values slowed at the end of the week, and prices were mixed at midday today. Choice carcass gained .06 to 330.04, but Select was 2.00 lower to 302.10.  Choice carcasses are generally higher on the week, but since Wednesday, prices traded relatively flat.  Slowing momentum in the retail prices could be concerning.  The retail market may be in a window from Memorial day to the 4th of July were prices could slip, adding pressure to the cash and futures market.  The biggest problem facing the cattle market is the slow processing speed and cattle supplies building.  This has kept the cash market mostly steady, and moved the futures market into a sideway overall trading range.  The concern is price may have to break lower before working high overall into the end of the year.  Feeder cattle futures were pressure by the lack luster cattle market and the premium of the front month over the cash index.  August feeders to over as the lead month today, losing 1.500 to 151.300, and September traded 1.300 lower to 153.525.  The cash index is trading at 136.12, a steep discount to the futures.  There is time to pair these two together, but that may make it difficult for feeder prices to push higher.

LEAN HOG HIGHLIGHTS: The hog market traded strongly higher to end the week, as front month prices pushed to new contract high and high closes on Friday.  June hogs gained 1.525 to 117.250, and July Hogs were 2.650 higher to 119.350.  On the close today, June through August contract finished with new contract highs.  For the week, June hogs gained 3.025 and July was 2.800 higher.  The push in the market started with the strong retail close yesterday afternoon, that brought buying optimism into the open as June hogs gapped higher on first trades. The retail strength held into the midday today, as pork carcasses gained 2.21 to 128.58.  Movement was moderate at 212 midday loads.  Carcass values were higher throughout the entire week, trading nearly $6.00 higher than Monday’s close at 122.21.  The demand for pork has stayed strong even at these high retail carcass prices.  The cash hog index traded .58 higher to 113.08, finishing the week with gains of 1.64, for the 16th consecutive week of higher trade.  The hog market may be concerned regard the court decision this week to slow slaughter chain speed in some packing plants.  In the short-term, a tighter product supply could help lift the carcass values with the given demand, but eventually could weigh on the cash market overall.  Keep an eye on the headlines for further details.  Technically, the hog market and product market are strong, and despite being over bought, are still looking for a top.

 

 

 

We are offering direct deposit payments and scale ticket grades via text message to ensure social distancing. Please call the Dysart office for informaiton and forms.  

 

Tama-Benton Cooperative Locations and Office Hours 

 

Dysart- 319-476-3666

Office Hours

Monday-Friday 8:00-4:30

 

Vinton 319-472-4791

Office Hours

Monday-Friday 8:00-4:30pm

 

Clutier 319-479-2242

Office Hours

Monday-Friday 8:00-4:30pm 

 

All Grain Settlements are now completed at the Dysart Office. For your convenience Grain Checks and Contracts may be printed at the Vinton or Clutier locations. 


 CR PROCESSOR HOURS   

SAT, SUN, & MON JUNE 12TH, 13TH, & 14TH

ADM  SAT:7am-3pm  SUN:7am-3pm  MON:5am-7pm

INGREDION  SAT&SUN:CLOSED  MON:7:30am-11am

STARCH  SAT&SUN:CLOSED  MON:7am-3pm

CARGILL BEANS  SAT&SUN:CLOSED  MON:BY APPOINTMENT 6am-5pm

 

THESE HOURS ARE POSTED FOR YOUR CONVENIENCE.SUBJECT TO CHANGE WITHOUT NOTICE.

BE PREPARED FOR EARLY CLOSING WITHOUT NOTICE DUE TO WEATHER, FLOODING, OR DOWNTIME.

Please report Direct Shipment Loads Promptly to the Dysart Office in Order to Maintain Delivery Schedules and to Final Price Contract Overfills and Underfills. Thank You 

 

 

 

   

 

 

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Quotes are delayed, as of June 12, 2021, 05:46:55 PM CDT or prior.
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