Stewart-Peterson Market Commentary

Closing Commentary - August 21, 2018

Top Farmer Midday Update 8-21-18

CORN: Corn futures are slightly lower this morning, with Dec down a penny to 3.75-1/2. Corn markets are absorbing Pro Farmer Crop Tour estimates for significantly above-average yields in both SD and OH from yesterday. In addition, a few rain events over the heart of the Corn Belt today are keeping a lid on gains. However, corn futures are holding some technical support, with the Dec contract testing and holding its 50-day moving average level for the fourth session in a row. Prices are also holding upward trendline support begun on July 12, when the Dec contract made its contract lows. Though prices are struggling to move higher, it appears as though traders are unwilling to take them too much lower at this point.

SOYBEANS: Soybean futures are drifting lower this morning, with the Nov contract down 3-3/4 cents to 8.89-1/2. The Nov contract is trading within just a 10-cent range today, on both sides of the point where the 10, 20, and 50-day moving average levels all converge. The Pro Farmer Crop Tour reported average soybean counts well up from last year's levels and the average level in SD and OH yesterday afternoon. News this morning that 250,000 tons of soybean cake and meal were sold to unknown destinations for the 2018/19 marketing year.

WHEAT: Wheat futures are down sharply this morning, testing the recent consolidation lows. Chi futures are down 9 to 10 cents, KC down 7 to 8, and Mpls down 5 to 6. The Dec Chi contract traded this morning as low as 5.49-1/2, coming within just 2 ticks of the lows of the current trading range. Dec KC wheat came within 2-1/4 cents of its recent consolidation low. A continued theme of tightening world supplies and the speculation that Russia may limit export activities down the road is preventing a selloff from these levels.

CATTLE: Cattle futures are mixed this morning, with the live contracts up 7 to 20 cents and feeder contracts down 5 to 30 cents. The best traded Oct live cattle contract is up 17 cents to 110.62, barely holding above its 200-day moving average level. Beef demand has been improving, with retail values trending higher. Cash trade so far this week is undeveloped, so the market is still waiting for more of a defined fundamental direction.

HOGS: Hog markets are mixed this morning, trading on both sides of steady after yesterday's setback. The nearby Oct contract is 2 cents higher to 56.50 and the Dec contract is a dime lower to 54.12. The Oct contract has corrected out of overbought levels and is holding its 50-day moving average support level. Momentum is pulling back, which shouldn't be much of a surprise considering the weakness in cash markets. Traders are waiting on information regarding the severity of the recent reports of Swine Fever in China. In addition, some are speculating that a trade deal with Mexico will be announced at the middle of this week.

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