TFM Midday Update 3-31-20


Corn futures are a bit lower in quiet trade ahead of this morning’s Grain Stocks and Prospective Plantings report. May corn is down 0.02 to 3.3925, Jul is down 0.025 to 3.45 and Dec corn is down 0.025 to 3.5725. Given current prices and a lack of demand from ethanol plants, producers may plant a bit less corn than expected, but today’s report will only show intentions as of March 1. Traders are expecting lower corn stocks than this time last year, though an extended rally looks unlikely given current energy prices. Jul futures tested and failed again to break through their 10-day moving average resistance level and have since sagged below yesterday’s lows. Funds were thought to have sold about 12,000 contracts of corn yesterday.


Soybean futures are choppy to a bit negative this morning, with May up 0.0025 to 8.825, Jul down 0.01 to 8.855 and Nov down 0.02 to 8.725. Today’s planted acreage estimate is not expected to show any major deviation from the Outlook Forum’s 85m acre estimate.  Soybean stocks are expected to come down from the same time last year. The Brazilian real is lower which is a pressure point, though South American logistical issues still make U.S. supplies look attractive to prospective importers. Jul beans have traded in another two-way session so far this morning, continuing to consolidate within the recent range. Today’s reports should set the direction out of the range. Funds were thought to have bought about 1,000 contracts of beans yesterday.


Wheat markets are mixed to mostly higher today, with May CHI wheat up 0.005 to 5.70, May KC wheat is up 0.035 to 4.9625 and May MPLS wheat is up 0.0025 to 5.345. Spring wheat acreage will be the focus of today’s Acreage report. Most are expecting smaller planted areas, but these estimates are far from final and are influenced by spring weather. The stabilizing U.S, dollar has limited wheat futures gains lately though there are reports that Kazakhstan will enforce export quotas along with Russia and Ukraine. None of the three wheat markets have broken out of recent consolidation ranges so far today, though prices are currently trading just off session highs. Funds were thought to have sold about 1,000 contracts of wheat yesterday.


Cattle markets continue to sag this morning despite the sharp discount of futures to cash. Apr lives are down 1.07 to 98.17, Jun lives are down 1.22 to 87.85 and Aug lives are down 1.10 to 89.57. May feeders are down 2.75 to 118.15 and Aug feeders are down 2.60 to 124.32. Cash trade so far this week has been quiet, though boxed beef prices have made a moderate sell off over the past week or so. Slaughter totals are again running ahead of last week and the same week last year, keeping marketings current, but also contributing to a glut of beef supplies. Jun lives are trading in an inside session so far with a relatively quiet range. May feeders fell through their 10-day moving average support level and are trading just off the lows of the day.


Hog markets are mixed to mostly higher today, likely in some technical correction to recent weakness. Pork values have made a significant pullback from the recent rally as fresh supplies continue to build. The market is also concerned about plant shutdowns which would not only diminish demand for slaughter supplies in the near term, but also force higher production down the road as animals back up in the country. The best-traded Jun contract made new lows again today early in the session, but has since recovered back within its Bollinger band range. Still, technical indicators are finding oversold readings and today’s price action does not indicate a reversal.


Kelly Rubisch

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