CORN HIGHLIGHTS: Corn futures had an interesting day despite a very quiet close with nearby May losing 1/4 cent, closing at 3.71-1/4. Dec gained 1/2, closing at 3.95-1/4. The after pause session saw futures gaining 2 cents but quickly giving it up, turning negative with losses of 3 cents most of the morning. The 10-day moving average held, and an announcement suggesting U.S. / China talks are in their final stages seemed to bring confidence into the marketplace. Yesterday, there was talk that trade communication could run into June. Now it looks like U.S. trade representative Robert Lighthizer and treasury secretary Steven Mnuchin are flying to Beijing the week of 3/25. Winter / spring weather is providing uncertainty as well, and some of this comes in the form of farmers' inability to move grains. We are seeing basis levels improve in some areas, and consequently, if you would see that and you have been waiting, be sure to take advantage of it. Our bias is that futures could move higher; if they do, it is likely that basis will widen.
SOYBEAN HIGHLIGHTS: Soybean futures finished quietly mixed. Nearby May lost 1-3/4, closing at 9.04, holding a 9.00 support level with today's low at 9.00-1/4. Deferred Mar gained 1/2, closing at 9.53-3/4. Prices continue to move nowhere fast with yesterday's market and today's almost mirroring each other, trading both sides of steady and finishing at nearly the same level. The 10-day moving average did act as support today for the second consecutive session. We are concerned, however, that prices also tested the 100-day moving average above where prices closed today. The failure for the third consecutive session for Nov beans to push through this level could suggest prices move lower. Good news in the form of what we would term an advancement in tariff talk provided support, as it looks like both sides could be within weeks of finishing a deal.
WHEAT HIGHLIGHTS: Wheat futures ended quietly in Chi and KC with losses of 1/4 to 1-3/4 cents. Mpls gained 3/4 to 4-1/2 cents. Continued talk of a potential late spring should be providing underlying support for Sep Mpls futures, as prices may have found a near term or longer term low. Yet, the overall trend remains down, with prices peaking in Aug and continuing to show a series of lower lows and lower highs. Overhead resistance for Sep Mpls is at 5.74 and then at 5.77, the 40 and 50-day moving average respectively. New news was lacking. Flooding conditions in the West look devastating but probably have little impact on winter wheat crop. Nonetheless, conditions remain somewhat sketchy and less than ideal; therefore, we don't think hedge pressure will develop in the near term. The 21-day moving average did hold Jul Chi in check for the second consecutive session.
CATTLE HIGHLIGHTS: Cattle markets moved moderately higher with Apr lives up 80 cents to 129.12, Jun lives up 15 to 122.72 and Aug lives up 62 cents to 118.72. Apr feeders closed 1.50 higher to 147.80, and May feeders closed 2.20 higher to 150.52. Choice beef values closed 1.34 higher yesterday afternoon to 228.33, their highest value since 5/30. Choice beef was up another 1.73 at midday to 230.06. This is 1.84 higher than a week ago. Very poor feedlots conditions continue to hold weights back, especially in flooded areas of Nebraska. There are growing reports of large calf losses due to flooding. Time will tell what kind of effect this will have on the cattle herd going forward. A surge in hog prices has been supportive as well, in addition to surging pork prices. Technically, today was more mixed than the closes might suggest. Apr lives closed back above their 20-day moving average resistance level, while Jun made new contract highs again but closed just slightly higher for the day. Futures are overbought, but we have yet to see a topping signal. Apr feeders closed near the top end of their recent ranges, while may feeders surged out of their months-long range. The May feeder contract made its highest close today since 10/24.
LEAN HOG HIGHLIGHTS: Hog markets made their first negative closes in a handful of sessions with Apr down 20 cents to 70.82, Jun down 55 cents to 87.25 and Jul down 30 cents to 90.07. The CME lean hog index was up 1.14 today to 56.54, its highest value since 2/8. Carcass cutout values closed 3.50 higher yesterday afternoon to 72.39, their best price since 12/13. This is an increase of over 5.00 in just a week's time. Carcass values were up another 1.51 this morning to 73.90. Extremely low pork prices recently likely got low enough to clear some inventory, and since then, U.S. pork production has been returning to more normal levels. The market is still expecting China to increase purchases of U.S. pork products down the road, but fund buying appears to have stalled for the time being. Hog prices are holding a very large premium to the cash market for this time of year, and technical indicators are severely overbought.