TFM Midday Update 4-9-20

The CME and Total Farm Marketing offices will be closed Friday, April 10, 2020 in observance of Good Friday


Corn markets are slightly lower in quiet trade ahead of the April Supply and Demand report. May, July and Dec are all down 0.005 to 3.295, 3.35 and 3.4875 respectively. Dry conditions in Brazil along with the strengthening Brazilian real are supportive, though corn is still in a downtrend due to dismal ethanol demand. Corn sales this week were strong, with 1.85mmt reported sold for the week ending April 2, a marketing year high. This was up 72% from last week and up 41% from the previous 4-week average. July corn is currently making its second consecutive inside session which could make corn more susceptible to a breakout soon. Stochastics are still oversold. Funds were thought to have sold about 4,000 contracts of corn yesterday.


Soybean prices are finding a bit of buying ahead of today’s WASDE report, with May up 0.07 to 8.615, July up 0.065 to 8.6825 and Nov up 0.04 to 8.72. Lower palm oil production in southeast Asia is increasing demand for soybean oil, and crushings in the US and China have kept demand high for raw beans as well. Export sales for the week ending April 2 came in at just 523,500 tonnes, down 45% from last week and down 25% from the previous 4-week average. July futures have punched through their 20-day moving average resistance levels after several tests lately. July is currently testing its 10-day moving average, and a close above both lines would be the first since March 31. Funds were thought to have sold about 1,000 contracts of soybeans yesterday.


Wheat markets are higher ahead of today’s Supply and Demand report, with May CHI wheat up 0.055 to 5.5375, May KC wheat is up 0.0925 to 4.8725 and May MPLS wheat is up 0.02 to 5.32. KC wheat producing areas of the US are forecast to see below normal temps for the next two weeks, and areas of Russia reportedly have about half of normal soil moisture levels. French production estimates are still falling as well. The higher Russian ruble is supportive.  All three wheat markets have pushed above their 10-day moving average resistance levels for the first time since April 1. The US sold nearly 258,000 tonnes of wheat for the week ending April 2, up sharply from last week but down 36% from the previous 4-week average. Funds were thought to have sold about 1,000 contracts of Chi wheat yesterday.


Cattle markets are down today after unsuccessful tests of resistance yesterday. April lives are down 0.57 to 92.25 and June lives are down 2.57 to 84.10. May feeders are down 2.12 to 117.25 and August feeders are down 1.00 to 126.55. Beef values are still sliding lower, and some late afternoon cash trade in NE yesterday started to slide lower than 105. The stock market is higher which could mean traders are expecting things to return to normal sooner than initially expected, but heavy production lately is overwhelming the reduced demand. Live cattle futures are filling gaps made yesterday and are trading towards the middle of the day’s range so far.


Hog markets are down today following yesterday’s disappointing losses. April hogs are down 0.92 to 42.20 and June hogs are down 2.00 to 49.55. Pork and cash hog values are still moving lower and it is unclear how cheap pork will need to get to clear product. Reports of African Swine Fever in Poland and China are supportive, and news that hog weights are beginning to drop is also a positive surprise. June hogs, though showing triple digit losses, have traded within a very tight range today in a relatively quiet session. Technicals are still oversold and momentum indicators look mixed at best.


Carol Tillmann

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