Top Farmer Closing Commentary 5-23-19

CORN HIGHLIGHTS: Corn futures retested their high from two days ago when Jul futures reached 3.99, but again ran into resistance and by day's end finished with losses of 4-3/4 in Jul closing at 3.89-3/4 and new crop Dec at 4.08, down 4-3/4. Dec reached a new high for the year at 4.16-3/4. Volatility has picked up in recent weeks and today's downward close, while disappointing for bullish traders, shouldn't be a big surprise. Prices are running into the likelihood of strong farmers' selling, as well as a lot of uncertainty that exists over the next 10 days. Traders may have been willing to step aside the market in front of a Friday before a 3-day weekend. Perhaps more importantly, a lot of confusion in misinterpretation of what the market facility payment may look like for corn, beans, and wheat may have had traders stepping to the sideline until more clarity. It does look like, in order to receive a payment, you will have to plant acres. Our interpretation, you will not be able to double dip between prevent plant payments which insurance is in part premium paid by the government, as well as a MFP payment. Export sales at 17.4 mil bu old crop were a disappointment as exports continue to run behind USDA projections, which could suggest a downgrade on the next USDA report.

SOYBEAN Highlights: Soybean futures finished lower today with losses of 7 cents in nearby Jul closing at 8.21-1/2 and 7 lower in new crop Nov at 8.48-1/4. Today's softer landing negates yesterday's gains, but prices did close right at the 10-day moving average, a support level. Uncertainty over the market facility payment had prices both on the offensive and defensive, but it was announced near mid-session by the USDA that prevent plant acres would not be eligible for the market facility payment. In other words, you need to plant beans. This prompted bean price pressure expecting that farmers may switch some corn to soybeans. A sharp drop in crude oil may have spilled over into all commodities, as well as did a sharp drop in the stock market.

WHEAT HIGHLIGHTS: Wheat futures finished lower on all three exchanges with Mpls leading today's drop closing 8-3/4 to 9-1/2 cents weaker as prices slipped below the 50-day moving average likely uncovering sell stop orders. The technical picture the last couple of sessions has looked somewhat iffy with prices in each of the last three closing in the lower half of the daily trading range. More importantly, the 100-day moving average has continued to act as overhead resistance the last four sessions with prices either challenging this level or going through only to reverse back downward. Concerns over disease are heightened due to continued wet weather, yet we may think that in the long run, these scares are typically overblown. We don't want to minimize these concerns, yet we're not ready to suggest this is a major deal either.

CATTLE HIGHLIGHTS: Cattle markets closed slightly higher today, staging a bit of a late session recovery after holding some nearby support levels. Jun lives closed 15 cents higher to 110.80, Aug was up 20 cents to 108.15, and Oct lives were up 25 cents to 108.05. May feeders went off the board 15 cents higher to 135.60, Aug feeders were up 42 cents to 143.02, and Sep feeders were up 12 cents to 144.00. Choice beef values were up 17 cents yesterday afternoon to 219.75 and were up another 76 cents this morning to 220.51. U.S. beef export sales for the week ending May 16 were very solid, reported at 24,3000 tons vs a previous 4-week average of 18,725 tons. Cumulative sales for 2019 have reached 461,900 tons, 3.6% ahead of last year's pace. A few head in NE and CO were sold today at 116.00. This is 1.00 lower than last week. Price action today was very quiet, with the best traded Aug live cattle contract trading within a range of just 1.17. Prices were stopped at the overhead 20-day moving average and held their 10-day moving average support level. Aug feeders were unable to break through their 10-day moving average resistance level, tested for the second session in a row.

LEAN HOG HIGHLIGHTS: Hog markets closed with mixed finishes today, climbing off the day's lows, but not able to turn momentum higher. Jun hogs were down 22 cents to 89.42, Jul hogs were down 10 cents to 90.95, and Aug hogs were up 12 cents to 92.30. The CME lean hog index was down 77 cents today to 86.02. Carcass cutout values were up 17 cents by yesterday's close to 219.75, and were up another 76 cents this morning to 220.51. U.S. pork export sales for the week ending May 16 were reported this morning at 46,300 tons vs a previous 4-week average at 15,425 tons. Cumulative sales for 2019 have reached 739,800 tons, 17.9% ahead of last year' pace. China accounted for over 31,000 tons for this week's sales, the second highest weekly total on record. However, building tensions with China have kept new buyers somewhat hesitant recently. Technical indicators are not giving strong buy or sell signals currently. Momentum indicators are pointing sideways to lower, but the hog markets cannot seem to find many new sellers at this time either.

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