Stewart-Peterson Market Commentary

Closing Commentary - April 24, 2019

Top Farmer Closing Commentary 4-24-19

CORN HIGHLIGHTS: Corn futures closed lower again for the third consecutive session, as prices lost anywhere from 2-3/4 cents on Jul 2020 to 4-1/2 cents on May closing at 3.46-3/4, another new contract low close. Dec new crop closed down 3-3/4 at 3.76. Wheat continues to lead the way weaker with losses of 5-1/2 to 6-1/2 cents and beans were also weaker closing 6 to 7 cents lower. The grain complex continues to be plagued by heavy liquidation, additional fund selling, and a U.S. dollar which reached its highest level for the year. While planting progress is delayed in areas, the market is not yet concerned that on April 24 there will be a significant amount of corn acreage pushed back to the point of either no plant or bunching all of the planting into one window. Yet, it is a major concern in areas that are saturated with moisture and it may be at least a week or more before these areas dry out. The 6-10 day forecast continues to suggest above normal precipitation for the entire Midwest. Yet, the market hasn't responded as in recent years when late planting corn occurred yield has been trendline or higher.

SOYBEAN HIGHLIGHTS: After a rough looking technical picture yesterday, soybeans followed through with weakness again today losing 6-3/4 in May closing at 8.55-1/4, to 7 lower in Jan closing at 8.99-3/4. New crop Nov closed at 8.89-1/2 down 3-3/4 and its lowest close since September. The technical picture looks soft and there is no bottoming signal in place. Near-term downward price projection on Nov beans is the low from September 18 and that is 8.79-1/4. If that level doesn't hold, look for retested contract lows established from July 13 and that is 8.64-3/4. A large increase of carryout from last year, technical weakness in the dollar reaching a new high, along with no advancement on tariff news all has weighed on markets as of late. While it is wet in parts of the Midwest and some corn acres could switch to beans, it's too early to draw conclusion to that yet.

WHEAT HIGHLIGHTS: Wheat futures continue to slide, losing anywhere from 6 to 10 cents as KC led today lower with May closing at 4.04-1/2, a new contract low. Today's negative activity negates positive hook reversals yesterday. A lack of favorable news and spillover weakness in corn and soybean prices likely weighed on wheat futures. A new high for the U.S. dollar and strong weekly crop ratings have also been negative factors the market has been battling. Bottom line there just isn't much friendly, and the market is reflecting this through additional new selling or liquidation of contracts in which traders are long. With the general forecast that suggests normal to above normal moisture throughout most of the Midwest, this would imply little or no concern of dry conditions. Could there be too much rain? This is a factor that could lead to disease issues, but as of April 24 we don't believe that's a factor and the market doesn't seem to be indicating that either. Spring wheat plantings are running behind schedule and a wet forecast could means some reduction in acres.

CATTLE HIGHLIGHTS: Cattle markets closed sharply lower today, falling victim to sellers driven by both technicals and fundamentals. Apr lives closed 1.55 lower to 126.77, Jun lives closed 2.77 lower to 118.35, and Aug lives closed 2.37 lower to 115.82. May feeders were down 3.10 to 146.52 and Aug feeders were down 2.97 to 156.72. Choice beef values closed 37 cents lower yesterday afternoon to 234.11 and were down another 40 cents to 233.71 this morning. The Plains region looks dry for the next five days which will not only help weight gain, but also keep the market focused on the fast placement pace in March and so far through the month of April. With the recent hiccup in fundamental strength, funds may be starting to exit some of their record net long position. Yesterday's Jun live cattle close below its 10-day moving average support level was a bearish development, especially after Monday's weakness. Sellers pushed the Jun live cattle through their 20 and 50-day moving average levels and settled directly on their 100-day moving average level. Today's Jun live cattle close is the lowest since February 15. A close below the 100-day moving average level would be the first since December 3. Aug feeder cattle fell sharply lower today as well, making their lowest close since April 3.

LEAN HOG HIGHLIGHTS: Hog markets found a moderate recovery today after two straight days of triple-digit losses. Jun hogs closed 40 cents higher to 92.77, Jul hogs closed 45 cents higher to 97.65, and Aug hogs closed 52 cents higher to 99.15. The CME Lean Hog Index was up 53 cents this morning to 82.07. Carcass cutout values closed 1.06 higher yesterday afternoon to 88.92, their highest value since August 23, 2017. Cutout values were up another 87 cents to 89.46. Packer margins turned higher again today, likely adding to some buyer support. Price action today was very quiet and choppy overall. The Jun contract fell just 17 cents below yesterday's lows and then crept higher into the close. Jul hogs made an inside session today and closed just 12 cents off of the day's highs. Aug hogs recovered today to close back above their 20-day moving average support level.

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