Top Farmer Midday Update 12-6-18

Corn: Corn futures are slightly lower this morning, but have actually recovered nicely from negativity this morning. The nearby Dec contract is down 1-3/4 cents to 3.72-1/2, Mar is down 1-1/2 cents to 3.82-3/4, and May is down a penny to 3.90-1/4. Negative feelings over U.S./China trade relations sent soybeans lower this morning, and corn followed. However, corn futures did not fill their gaps created on Monday's session. During yesterday's session, funds sold 4,000 contracts of corn and are now long about 31,000 contracts.

Soybeans: Soybean futures are moderately lower this morning, but have recovered after sharp negativity early in the session. The nearby Jan contract is down 8 cents to 9.05-1/2, Mar is down 7-1/2 cents to 9.18, and May is down 7 cents to 9.31-1/4. The Mar contract traded as low this morning as 9.09-3/4 after news surfaced that a prominent Chinese tech executive was arrested in Canada for extradition to the U.S. on charges related to sanctions against Iran. This is seen as a major blow to the goodwill developed between China and the U.S. over the past few weeks. Still, gaps formed on the Sunday overnight session are still intact and buyers have resurfaced keeping prices off of the lows. Funds bought 2,000 contracts of soybeans yesterday and were net short about 37,000 contracts as of yesterday's close.

Wheat: Wheat futures are soft this morning, with the Mar Chi contract down 6 cents to 5.12, Mar KC wheat down 4-3/4 to 4.93-1/4, and Mar Mpls wheat is down 1-1/2 cents to 5.74. Both the Chi and KC wheat contracts have fallen below their nearby moving average support levels. Negativity is likely flowing from expectations that Canada's wheat production will grow on today's Stats Can production report despite expectations that Iraq will purchase 50,000 metric tons of U.S. hard red winter wheat for their most recent tender. Funds sold 3,000 contracts of Chi wheat yesterday and are now short about 27,000 contracts.

Cattle: Cattle futures are slightly lower this morning, with Dec lives down 2 cents to 118.27 and Feb lives down 30 cents to 122.07. Jan feeders are down 82 cents to 144.65 and Mar feeders are down 47 cents to 142.57. Cash trade has been quiet so far today as traders wait to make a move until expectations for positive trade are met. Yesterday's stabilizing price action in the feeder cattle contracts was particularly impressive, and despite lower starts today, live cattle contracts are holding onto nearby support. For now, cattle markets are in a holding pattern.

Hogs: Hog markets are taking triple-digit losses today on further traded negativity. Dec hogs are down 1.10 to 54.75, Feb hogs are down 1.50 to 66.25, and Apr hogs are down 1.20 to 70.92. Without meaningful progress thus far on the U.S./China trade front, hog markets continue to chop around. Pork values have been strengthening very nicely, but the prospects of increasing exports to China down the road has been the driver of higher hogs, and we'll need to see actual development of trade relations to keep the move higher. In the meantime, it will be unlikely to see hogs move out of recent consolidation levels.




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