Stewart-Peterson Market Commentary

Closing Commentary - August 23, 2017

Top Farmer Midday Update 8-23-17

CORN:Corn futures are down 2 cents to 3.58 (Dec) while making a new contract low as bearish momentum carries prices lower. The Midwest U.S. weather forecast looks dry for the rest of week with rains by the weekend coming to MN, northwest IA, and WI with things dry elsewhere. Temperatures look below average through the weekend, then returning to average next week. The Pro Farmer crop tour isn’t doing the corn market any favors so far, with yields not veering that far off USDA’s latest estimates. Weekly Ethanol Stats showed 110.46 mil bu of corn used in last week’s ethanol production, dropping to 41.177 mil bu, the weekly totals needed to reach USDA’s target of 5.45 bil bu corn usage this marketing year. In tender activity, South Korea seeks 70,000 tons optional-origin corn. Crude is is up 56 cents amid a 25 point slip in the dollar.

SOYBEANS:Soybean futures opened higher on support from bean oil that got a bullish dose of news stemming from the U.S. Commerce Dept imposing steep duties on imported Argentine biodiesel. However, USDA announced that China had cancelled 640,970 metric tons of soybeans for delivery in 2016/17, causing prices to turn negative. Many in the trade feel with only a few weeks to go in the market year these beans may be eventually rolled to new crop. Last week China was an active buyer of US 2017/18 soybeans, and we saw a new crop sale of 284,000 tons going to an ‘unknown destination’ this morning. Meanwhile, prices are also facing pressure from generally non-bullish Crop Tour results and weather. Nov beans are down 3 cents to 9.34-1/2, off last night’s high of 9.47.

WHEAT:Wheat futures are firm after early two-sided trade pushed Dec CBOT and KC contracts to new contract lows of 4.28 and 4.25-1/2, respectively. Prices have become deeply oversold technically, and are subject to short-covering bounces. In tender activity, Algeria seeks 50,000 tons of optional-origin wheat.

CATTLE:Cattle futures are lower and uneven as the trade digests inconclusive Fed Cattle Exchange trade where more than a thousand lots of cattle went ‘unsold’ today. Yesterday’s Cold Storage data, showing total red meat supplies in freezers up 1% from the previous month, but down 8% from last year was a non-event for the market. Aug live cattle are down .450 to 106.275 after putting in a new 4-1/2 month low of 105.550 prior to the Fed Cattle Exchange. Oct cattle, down .675 to 107.075, are trading an ‘inside day’. Aug feeders are down .200 to 141.875.

HOGS:Hog futures lower led by $1.00 to $2.00/cwt lower cash markets. Oct hogs are down 1.050 to 62.825, and Dec is down .950 to 58.100. Both contracts are now at their lowest price levels for 2017 despite somewhat friendly Cold Storage data showing frozen pork supplies down 1% from the previous month and down 7% from last year.

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