Stewart-Peterson Market Commentary

Closing Commentary - February 21, 2018

Top Farmer Midday Update 2-21-18

CORN: Corn futures are unchanged as the trade awaits the two-day USDA Ag Outlook Forum set to begin tomorrow in Arlington, VA. May corn has been two-sided in light volume and was recently steady at 3.73-3/4. Dec, too, is at Tuesday’s settlement price of 3.96. Corn prices are buoyed by good demand, expectations for lower output in Argentina where dry weather is believed to have reduced yields, and double digit gains in beans. Outside markets have crude down 10 cents, and the dollar up 10 points.

SOYBEANS:Soybean futures up 10 cents in the nearbys with May beans at 10.47-1/2 and Nov up 7 cents to 10.32, on concerns that dry weather in Argentina could cause production losses. For soybeans, sizzling conditions in Argentina since November have prompted traders and analysts to slash harvest estimates, fueling projections that export business could shift to the United States from South America. Argentine farm consultancy, Agripac, cut its forecast for soybean production by about 18% from the start of the season to 47.0 mil tons. However, we’re hearing final crop numbers around 40.0 mil tons vs USDA’s forecast of 54.0 mil. Still, Brazil is on track for a record crop. The country's 2017/18 soybean crop is expected to reach 115.6 mil tons, 1.2% above last year's all-time high crop of 114.2 mil tons, according to an updated forecast on Monday from consultancy Safras & Mercado.

WHEAT: Wheat futures are mixed with a weaker tone in KC contracts. May KC wheat is down 4-1/2 cents to 4.82-3/4. New resistance has formed at 5.00-1/4 and the near-term trend remains positive, but recent choppy action leaves the market vulnerable to a correction phase. Support lies at 4.79 3/4. May CBOT wheat is down a penny to 4.61-1/2 with a short-term top and resistance formed at 4.79-1/2. Now, the contract is closing in on a test of 4.60 1/2, the swing low from February 9. If the 4.60-1/2 floor cracks, bearish momentum will accelerate, with the next downside chart objective seen at 4.51, the February 6 low. There was some export business reported by USDA this morning showing 120,000 tons of wheat going to Egypt.

CATTLE: Cattle futures are sharply lower after a weak start to today’s trading. Contracts tumbled triple digits ahead of this morning’s Fed Cattle online auction where one pen of 91 heifers was passed over at $126.25/cwt, resulting in no sales for the day. Feb live cattle were recently down 2.100 to 128.200. Apr cattle are down 2.450 to 125.275, tumbling to upward channel support; and Mar feeders are down 2.950 to 146.850, also finding support at the lows drawn at the bottom of the contract’s channel range.

HOGS:Hog futures are up .550 to 69.750 in the nearby Apr contract with 200-day moving average resistance drawn at 71.325. Cash hog prices are expected to see most bids steady to $1.00/cwt lower today. May hogs are up .200 to 76.200, close to the contract’s 200-day moving average.

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