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Today we talk about Trump’s speech at the Economic Club of New York and our thoughts on when Phase One of the trade deal might get done. We also go over the surprising rally in HRW wheat which is also helping corn.  Soybeans will be supported at $9.00 until we know more about the Trade Deal.  We wrap up the podcast with livestock and why we are still bullish lean hogs but feel cattle is due for a sell off.  Take a listen to the latest episode of Turner’s Take Podcast
Macro Markets
President Trump gave a speech today at the Economic Club of New York. The headlines will be about Trump berating the Fed about a lack of stimulus and lower interest rates. More importantly I think we are seeing the beginning of what Trump will campaign on, which is  the strength of the economy, low unemployment, and his tough stance on China.  If the economy is at the center of his reelection campaign, then he can’t look weak on trade.  He said if they don’t get a trade deal done then he is going to tariff just about everything he can on China.
Grain & Oilseeds
HRW Wheat (KC) is leading the markets higher as Dec KC Wheat closed over the 100 day moving average for the first time in months.  Dec KC closed up 15 cents to $4.38.  Dec 19 vs July 20 (old crop/new crop) is now at a 19 cent carry.  It was in the 40s over the summer and two weeks ago the carry was in the low 30s.  The cold weather is a threat to recently emerged winter wheat.  There is also a lot of acres that have not been planted yet.  Areas with soil temps below freezing will no be planted.  Funds were short 35K contract as of the last CoT.  This rally is led by fund short covering.
Crop Progress was released today and corn harvested is only 66% vs 68% expected.  There was minimal progress in the Dakotas and there is still a lot of corn to in the field.  Corn should be supported tonight and tomorrow.  Soybeans were 85% harvested vs 87% expected, also supportive for soybeans.  Winter Wheat conditions were 54% G/E vs expectations of 57%.  We should continue to see funds cover shorts in wheat.
Dec 19 vs July 20 HRW Wheat

Livestock
Hogs gapped higher on the open this morning as rumors swirled about China having another report of ASF in the northern part of their country.  This is the same area where the breakout started back in August of 2018.  We have not seen a story in the major news wires to confirm so it is still just a rumor.  If ture it t goes to show how difficult it is to contain ASF once it gets into the hog population.  I still like Feb Hogs.  If you don’t want to be long Feb futures I like bull call spreads, writing put spreads, and the the bull Feb vs April Hog futures spread.
Dec Live Cattle is hitting resistance at the 120 area.  While the futures are holding steady the spreads are starting to reverse. I like the Dec vs April bear spread. I think cattle overall is due for a break lower as we are up almost 25 pts since the Tyson fire.  The Dec vs April LC spread was a bear seasonal spread from MRCI. It is now past the optimal seasonal window but we think the move is starting later this year due to the post Tyson fire rally. Now that the market has recovered from the Tyson fire we think this spread continues to head lower.
Dec vs April Live Cattle

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