TFM Midday Update 12-29-20

CORN

March up 8 to 4.64-1/4 and May up 7-1/4 to 4.64-1/4
Technical buying with close over 4.50 on Monday.
Focus on Argentina weather staying overall drier keeping market supported
Demand, weather, & lack of farmer selling continue to bolster prices
Corn index closed at 4.42 on Monday – new 1 year high
Ethanol demand lower than last year
Moderate to heavy rain forecast for Argentina and Brazil, however still too dry in Argentina
Outside markets supportive – Dow Jones trading higher and US Dollar index lower

Jan up 20 to 12.75-1/4 and March up 18 to 12.75-1/4
Soybean market is overbought and due for a correction
Except for northern Brazil – rains continue to support crops favorably, Argentina remains dry
Tight overall supplies support
China continues to need soybeans – strong demand expected into 2021
USA is only significant source of soybeans currently
Trend in March soybeans remains persistently up
Soybean index closed at 12.12 Monday – down from 6-year high
Weaker US dollar supportive

Mar CHI up 7 to 6.21-1/4, KC Mar up 8-3/4 to 5.85-3/4, and MPLS up 5 to 5.81-3/4
U.S. HRW wheat productions areas will get a little snow/rain next week
Russia wheat exports lowered to 36.3 MMT for 40.8 MMT bullish for the market
Weak dollar trend & hopes for better demand provides underlying support
KC wheat prices benefitting from higher corn and soybean prices
Support from concerns of drought in the USA
Moderate to heavy precipitation expected in southern Plains – limited benefit to drought areas
US wheat exports down 2% from last year

Feb LC up 0.200 to 115.975, Apr LC up 0.250 to 119.775
Positive chart movement but demand still a concern
Key technical level over top of February at 116.000, Price gap on chart at 119.475 could be possible target
Cash market finished higher last week at $110 for most. Anticipating firmer cash again this week
December cattle futures expire on 12/31
Cash market strength and wholesale beef values will be key to maintain strength
Cattle owners raised asking prices across the plains from $112 to $113

Feb Hogs up 0.425 to 66.925 & Feb Pork Cutout up 0.450 to 76.550
Waiting for next week when market participants return for indication on price direction
Large slaughter pace and weak cash pressure the markets
Cash lean index @ 60.60 down 1.02, Feb hogs at a 66.50 is $6 above the index, which could pressure futures
Good weekend for pork sales
Winter weather is supportive

John Heinberg