TFM Midday Update 12-31-20

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 4-3/4 to 4.79-1/4 and May up 4-1/2 to 4.78-3/4
Argentina (world’s #3 corn supplier) will suspend sales of corn for export until Feb 28^th – sign of tightening global food supplies during pandemic
Focus on Argentina weather staying overall drier keeping market supported
September through December moisture in Argentina has been well below average
Demand, weather, & lack of farmer selling continue to bolster prices
Ethanol demand lower than last year, and ethanol stocks are building
Outside markets supportive – Dow Jones trading higher and U.S. Dollar Index lower
Corn has closed higher for 14 consecutive days
Possible loss of 10-12 mmt of South American corn production could shift even more demand to the US
Weekly Export Sales: 38 mm, at high end of expectations and supportive

Jan up 16-3/4 to 13.20-1/2 and March up 14 to 13.14-1/2
Soybean rally continued overnight, leading to new contract highs
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
Argentina’s extended forecast shows returning heat and dryness
Weekly Export sales: 25.6 mb at high end of expectations and supportive

Mar CHI down 5 to 6.35-3/4, KC Mar down 5-1/4 to 5.96, and MPLS down 3 to 5.93-1/4
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, 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
Wheat market is overbought and may be due for a correction
Underlying support coming from abnormally dry conditions in the US and Russia

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 today.
Cash market strength and wholesale beef values will be key to maintain strength
Cash cattle markets started trading Wed with live trade developing at $111-112 per cwt – $1-2 higher than last week. Asking prices are $112-113
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
Strong pressure has developed in futures trade during the week based on increased grain and feed prices
Overall trade volume reported as generally light
Projected slaughter for Thursday is 115,000 head

Feb Hogs up 2.475 to 70.075 & Feb Pork Cutout up 2.050 to 78.625
Strong export numbers helping support hog prices on Thursday
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
Projected slaughter for Thursday is 425,000 head
Saturday runs expected at 338,000 head

John Heinberg