Stewart-Peterson Market Commentary

Closing Commentary - November 21, 2014

Stewart-Peterson Closing Commentary 11-21-14

CORN HIGHLIGHTS: After a disappointing close, corn futures did finish negative on the day. Dec corn was down 1/2 of a cent to 3.72-3/4, followed by Mar down 1 to 3.85-1/4. For the week, the Dec contract posting a 9 cent loss. Fresh news was lacking from the corn futures market this afternoon, but basis levels firming in the countryside with harvest wrapping up, along with slow farmers selling pace had futures pushing up to 8 cents higher during the course of the day today. Demand going forward continues to be the focus given the supply picture that we are seeing. Ethanol margins have been fairly stable, which is helping sustain ethanol production. In addition, there is a possibility of EPA announcement for bio fuels mandate, which could be giving us some additional support. The market held in positive territory until the last minutes of the trading day, which saw some stops trigger, pushing the market into negative territory.

SOYBEAN HIGHLIGHTS: Soybean futures posted double digit gains today as contracts ranged from 14 to 18 cents higher. Front month Jan beans were up 18-1/2 to 10.39, followed by Mar up 18 to 10.46. For the week, the Jan contract posted a 16-1/2 cent gain. Nearby demand continues to remain strong, which is adding a lot of support to the bean market given the large supply picture. In addition, better weather in South America continues to keep upside limited at this moment. Beans caught a bit of a bid and onside news as Peoples Bank of China announced a surprise interest rate cut, which should help free liquidity making the possibility of bean purchases more readily available. Going forward, the demand picture will continue to be the driver behind this market as export sales and crush numbers have been favorable and ahead of USDA projections.

WHEAT HIGHLIGHTS: Wheat futures finished unchanged to higher this afternoon as the nearby Dec contract closed unchanged at 5.47-1/4, and Mar up 1 cent to 5.53-1/2. For the week, the Dec wheat futures posted a 13-1/4 cent loss. Unlike corn, news was slightly lacking, but the market continued to see support as it watches attentions in the Russian/Ukraine political situation, as well as some concerns regarding the South American wheat crop. Technically, wheat futures are staying in a short term uptrend, but fundamentally the demand picture continues to keep the rallies in check going forward.

CATTLE HIGHLIGHTS: Live cattle futures posted moderate gains this afternoon as Dec cattle finished 65 cents higher to 170.90, followed by Feb up 32-1/2 to 172.15. Cattle futures held moderate gains through the majority of the afternoon as futures continued to see strength with gains and wholesale beef prices. At mid-day, boxed beef values were 26 cents higher on choice carcasses, while select was posting a 34 cent gain. Cash trade did still stay undeveloped with bids at the 168.00 level. The market did stay fairly quiet this afternoon in front of cattle on feed numbers. In feeder cattle, contracts posted modest gains on technical support and continued strength in the fat market. Jan feeders were 77-1/2 cents higher to 236.35, and Mar feeders up 72-1/2 to 234.45. Some of the gains in the feeder market may have been held in check by the continued upside movement in corn over the past couple of days during the majority of today's trading session.

LEAN HOG HIGHLIGHTS: Hog futures were mixed with weakness seen in the front months, but strength in deferred contracts. Dec hogs finished 12-1/2 cents lower to 90.65, followed by Feb down 45 to 90.45. Continuing weakness in pork prices is keeping the front month hog contracts in check. At mid-day, pork carcass value is down 74 cents to 92.88. Overall, cash trade has stayed fairly steady to lower during what is typically a seasonal time window where front month contracts may see some additional selling pressure. Trade was also fairly quiet this afternoon in front of today's cold storage numbers. The USDA released corn storage this afternoon showing that 524.7 mil lbs of pork in storage, this is compared to 565 mil last year, with bellies in storage over 1.2 mil lbs of last year. The continuing growth of the supply picture has been keeping front month hog prices in check and pressured the last few days. 

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