Stewart-Peterson Market Commentary

Closing Commentary - May 23, 2018

Top Farmer Midday Update 5-23-18

CORN: Corn futures continue to show signs of working higher in the near-term, supported by new crop, as tightening corn supplies and weather uncertainty favor managed money, who are long an estimated 200,000 corn contracts coming into today’s trade. High heat is forecasted for the weekend, and there is talk of China taking their 8 mil metric ton corn import quota from the U.S. Old crop Jul corn is up 2 to 4.06-3/4, while facing stiff resistance at the 4.08-1/4 area. Dec corn is up 1-1/2 cents to 4.24-3/4 after making another new high in early action at 4.25-1/2. Today’s Weekly Ethanol statistics showed 107.11 mil bu of corn used in last week’s ethanol production, lessening the weekly total (102.365 mil bu) needed to meet USDA’s annual usage estimate. Weekly Export Sales will be out tomorrow. This morning, there was an export sale announced by USDA showing 140,000 tons of option-origin corn going to Saudi Arabia, half of the total is for the 2017-18 marketing year, half for 2018-19.

SOYBEANS: Soybean futures are hanging onto 6 to 7 cent gains at mid-session, underpinned by technical buying after gapping higher to start the week. We expect sustained support at this juncture due to looming questions over just what will happen with Ag trade with China. This morning, there was talk that overnight, China bought 4 to 6 U.S. soybean cargoes for August out of the Pacific Northwest, and have been asking for September prices. Jul beans are up 6-1/2 cents to 10.37; Nov up 6-3/4 cents to 10.45-3/4.

WHEAT: Wheat futures are firm, underpinned by weather, but tempered by new highs in the greenback. Jul CBOT wheat is up 2-1/4 cents to 5.23-3/4. Nearby KC wheat contracts are up 4-1/4 cents to 5.45. Sep MPLS wheat is up 5-1/2 cents to 6.44-1/4. In the southern Plains, a few showers and isolated thundershowers will be in the region during the next five days, but rainfall will not be sufficient to improve yield prospects for winter wheat. Later in the period, the pattern turns hotter and even drier for the southern part of the region.

CATTLE: Cattle futures are sharply higher despite few surprises in yesterday’s post-trade cold storage report. Beef stocks are not currently burdensome Exports have slipped a bit over past couple of months but are still rather strong. The kill rate is up over 2.5% year-to-date and carcasses are heavier, but only 2% more beef in coolers shows beef is still moving. On a positive note, reports show that packers have been forward contracting majority of beef and not putting into storage. We’ll get a Cattle on Feed report Friday afternoon. Jun cattle are up 1.050 to 105.950 with no cash trades in today’s weekly Fed Cattle Exchange. Aug cattle are up 2.000 to 102.650. May feeder contracts expire tomorrow and are lightly trading 0.500 higher to 134.450.

HOGS: Hog futures are sharply higher, regaining the last two days’ losses. Cash looks steady to $1.00/cwt higher for today. However, traders appear to be back to trading technicals, retaking this week’s losses. Jun hogs are up 1.950 to 75.075. Jul are up 1.800 to 76.925, and Aug hogs are up 1.150 to 75.500.

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