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Stewart-Peterson Market Commentary

Closing Commentary - January 28, 2019

 

Top Farmer Closing Commentary

CORN HIGHLIGHTS: Corn futures were the strength in the grain market today as contracts were 2 to 6 cents higher. The majority of the strength was in the front months with the Mar contract up 6 cents to 3.86-1/2, while May corn was up 5-1/4 cents to 3.92. We saw a round of short-covering in Tuesday’s trade as corn prices rallied to fill the price gap established on Sunday night’s breakdown in the front-month contracts. Corn futures held their gains despite weakness seen in the other grain markets, which was encouraging. U.S. corn prices have now become extremely competitive globally and may be at a level where we see an influx of demand. Again today, we saw a published corn sale for 124,000 metric tonnes of corn to Mexico for the 2019/20 marketing year. The lack of demand has been one of the limiting factors in the corn market this entire winter, and a fresh influx of demand could be key in maintaining price support at least in the short term.

SOYBEAN HIGHLIGHTS: Soybean futures saw mild selling pressure in Tuesday’s trade as contracts were 2 to 3 cents lower. Front-month Mar beans were down 2-1/4 cents to 8.95, while the May bean contract was down 2 cents to 9.09. Soybean futures challenged long-term trendline support on overnight trade but did at least hold that level this morning and finished 3 to 4 cents off of overnight lows. With that, the bean market is still susceptible to additional long liquidation, as well as growing a short position from speculative funds based on the technical weakness and the money flow that may be moving into that soybean market on the short side. This price level will be a key area of support to hold, or further correction may still be in front of the market. Globally, South American weather staying relatively favorable, and should keep harvest moving bringing fresh beans into the supply chain. U.S. competitiveness is still weak at this stage, given the strength in the U.S. dollar vs the Brazilian real which will keep demand concerns at the forefront of traders’ minds.

WHEAT HIGHLIGHTS: Wheat futures saw modest losses as Chi contracts were down 2 to 3 cents in Tuesday’s trade, with front-month Mar contract down 2-1/2 cents to 5.69-3/4, while the May contract was 2-3/4 cents to 5.68. Weakness was also noted in other classes of wheat as the Mar KC winter wheat contract was down 4-1/2 cents to 4.82 and the Mar spring wheat contract was down 5 cents to 5.42-1/4. Wheat futures moved into a consolidative range trade today, as prices stayed supported by the 20-day moving average in the Mar contract. Mar wheat has not closed under this moving average since early December, and this would be a key support level where we could see some additional long liquidation and price correction. The overall demand picture has stayed relatively supportive of wheat prices, and firm global prices have allowed for the rally in the wheat market since its September lows. But currently, strength in the U.S. dollar, as well as a disappointing round of export inspections in Monday’s report, are likely to slow short term rallies. The market posted some key resistance in the Mar contract around the 5.90 trade level last week, but yesterday rallied off of lows to develop a level of support. The wheat market may be poised for some headline reaction whether the Chinese steps into the U.S. wheat market or we continue to see global wheat prices rally bringing support.

CATTLE HIGHLIGHTS: Cattle markets made slightly lower closes today, just off the lows of the session continuing the recent selloff. Feb lives closed 10 cents lower to 122.15, Apr lives were down 60 cents to 120.70, and Jun lives were down 55 cents to 112.47. Mar feeders were up 22 cents to 135.40 and Apr feeders were down 22 cents to 137.77. Choice beef values closed 90 cents lower yesterday afternoon to 213.59 but were up 15 cents this morning to 213.74. Select beef was up 2.59 this morning to 213.09. The tight choice-select spread is indicative of an oversupply of high-quality beef due to heavy weights lately. Cash trade so far this week has been quiet and the slow down in restaurant business, as well as the slow down in travel in general, are bearish forces on the demand side. U.S. beef production is expected to increase by 420 million pounds from Q1 to Q2, the largest increase for that time period since 2008. The best traded Apr live cattle contract made its lowest close today since October 11. Next support comes in at 120.35, the 200-day moving average level. Apr lives have not closed below that level since September 27. Live cattle are oversold according to both Bollinger Band and Stochastics. Mar feeders made a positive close today but in the lower third of the day’s range. Mar feeders traded at their lowest level today since September 24 and are oversold.

LEAN HOG HIGHLIGHTS: Hog markets made moderately higher closes today in positive territory, though just off the lows for the session. Feb hogs were up 27 cents to 66.22, Apr hogs were up 85 cents to 71.30, and Jun hogs were up 47 cents to 83.97. The CME Lean Hog Index was up 61 cents today to 61.90, its highest value since November 4. Carcass cutouts were down 12 cents in yesterday’s close to 77.26 and were down another 12 cents this morning to 77.14. The market is still worried that the spread of coronavirus will negatively impact pork demand in China though prices were able to stabilize a bit today. Feb hogs closed their gap from yesterday but only closed 7 cents off of the day’s lows. Apr hogs traded into the gap created yesterday, but couldn’t reach 72.82 needed to close the gap. Jun hogs closed just a nickel off of the session lows, holding the Bollinger Band support level.

 

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

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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   

WEDNESDAY JANUARY 29TH

ADM  5am-8pm

INGREDION  WAXY

STARCH  7am-3pm

CARGILL BEANS  6am-NOON

 

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 

 

 

 

   

 

 

Market Snapshot
Quotes retrieved on January 29, 2020, 04:48:03 AM CST
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