Stewart-Peterson Market CommentaryClosing Commentary - November 30, 2015
Top Farmer Closing Commentary 11-30-15
WHEAT HIGHLIGHTS: Bear spreading was a negative feature for Chi wheat as front month Dec was the recipient of deliveries. Dec wheat closed 5-3/4 lower at 4.60, while March closed down 3-1/2. In addition, traders may have been rolling out of long Chi/short KC wheat as KC futures picked up anywhere from 6 to 7 cents today. With new contract lows established either on Friday or today, many wheat contracts look about as soft as they have all year. New crop July, however, managed to close up 2-1/4 at 4.92-3/4 and is holding well above its contract low from Sept 4 of 4.82-1/2. Yet, for most contracts, especially in Chi, today's prices again finished in the lower half of today's daily trading range, if not near the low for the day.
CATTLE HIGHLIGHTS: Cattle futures softened with losses of 140 to 220 points as of this writing with Dec leading today's drop, trading at 129.65. Feeders were also on the defensive with heavy selling today, losing anywhere from 390 to 415 points as March led the drop, last trading at 159.52. We're not shocked to see a down day. We didn't see the cash market develop strong enough to warrant another upturn in live cattle futures, and consequently, with firmer grain prices, both the live and feeder prices took a hit. Sell stops were also triggered as prices pushed through the 10-day moving average, a level the market held above all of last week. While the supply of cattle isn't concerning, the heavier carcass weights continue to suggest that there is ample supply both in the beef as well as hog and poultry sectors. Broiler weights are up, as is production, and with probably 6 to 7% more hogs this year, beef continues to struggle.
LEAN HOG HIGHLIGHTS: Hog futures witnessed bear spreading today as traders were exiting nearby front months with Dec trading 27 lower and Feb 72 lower, as of this writing, while deferred months were firmer with June leading today's gain, trading 65 higher at 73.25. Weaker near-term cash in cattle may have weighed over into hogs today which tried to hold on to positive gains early in the session but failed to do so. Estimated slaughter was 438,000 which compares to 431,000 a year ago. Cutout values were stronger this morning, gaining 1.29 and that's on the heels of a gain of 68 cents on Friday. Nonetheless, it appears that the nearby Dec contract may have reached its near-term high and is running into resistance near 58-1/2.
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