TFM Midday Update 12-30-2020

FROM ALL OF US AT TOTAL FARM MARKETING, HAVE A HAPPY AND PROSPEROUS NEW YEAR!

THURSDAY, DECEMBER 31: The CME has regular trading hours. Total Farm Marketing offices will close at 2:00 CT; There will be no 4:30 update.

FRIDAY, JANUARY 1: The CME and Total Farm Marketing offices will be closed.

CORN

March up 2-1/2 to 4.68-1/2 and May up 2-1/2 to 4.68-1/2
Corn has traded higher the past 12 sessions.
Focus on Argentina weather staying overall drier keeping market supported
Demand, weather, & lack of farmer selling continue to bolster prices
Ethanol demand lower than last year, and ethanol stocks are building.
Moderate to heavy rain forecast for Argentina and Brazil, however still too dry in Argentina
Outside markets supportive – Dow Jones trading higher and U.S. Dollar Index lower
Talk of China has purchased additional U.S. corn has supported prices.
Corn index closed at 4.52 on Tuesday – six year high

Jan up 3/4 to 12.95 and March down 1 to 12.95
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, and prices are trying to ration demand
U.S. is only significant source of soybeans currently, and talk China was looking for February delivery soybeans supported prices yesterday.
Trend in March soybeans remains persistently up
Argentina port workers strike ended on 20th day – shipments scheduled for December hope to be completed by January.
National Soybean Index closed at $12.52 on Tuesday – six year high

Mar CHI up 21 to 6.39-1/2, KC Mar up 17-1/2 to 6.02-1/2, and MPLS up 13 to 5.93-1/2
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, pushing to nearby lows today, brings hopes for better demand provides underlying support
KC wheat prices benefitting from higher corn and soybean prices
Moderate to heavy precipitation expected in southern Plains – limited benefit to drought areas
U.S. wheat exports down 2% from last year
Bullish influence from corn help wheat prices stay supported this winter
Moisture from Tuesday’s snowfall is welcome given the prevalence of drought in the western plains

Feb LC down 0.200 to 114.375, Apr LC down 0.525 to 118.250
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
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
Fed Cattle Exchange posted $111 bids, Slightly higher than last week.
Expectation that packers will be aggressive buyers in order to fill plant needs for the first two weeks of January should support cash trade after the new year.

Feb Hogs up 0.500 to 67.700 & Feb Pork Cutout down 0.100 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
Winter weather is supportive
Limited but positive support in pork cutout values has led to increased underlying support
Expectation that moderate to strong export demand will redevelop over the next couple weeks, bolstering pork demand and prices, weekly export sales tomorrow should support.
Wednesday slaughter numbers expected near 488,000 head
Saturday runs expected near 328,000 head

Brandon Doherty