TFM Sunrise Update 01-21-2022


Corn futures were mixed overnight and are down 1 to 2 cents this morning as prices consolidate.  March corn is at 6.09-3/4 and Dec at 5.60-3/4. For this holiday-shortened week of trade, the nearby contract is up 13 cent.  New crop is up 2-1/2 cents.  Trade estimates for this morning’s USDA Weekly Export Sales are 500,000 to 1.0 mil tons.  Underlying support stems from the bean complex tied to falling South American row crop estimates that could add export demand to U.S. supplies.  Chinese corn prices are near $11.00.  In outside markets, the dollar is weaker this morning, but up for the week.  Crude is coming off new high this morning; And, stock index futures are also in the red.


Soybean futures eased overnight in a modest technical correction after this week’s sharp rally.  March beans are down 3-3/4 cents to 14.22 after trading above 14.15 resistance that ushered in more fund buying. There is talk of one new Brazil soybean crop estimate as low as 127 mmt.  For the week, the contract up 52 cents and within 23 cents of the contract high from June 7 at 14.45-1/2.  Nov is down 2 to 13.18-1/4 and up 35 cents for the week.  Trade estimates for this morning’s USDA Weekly Export Sales are 600,000 to 1.20 mil tons.  There are rumors China may be looking to buy 1.5 mmt U.S. new crop soybeans.  Overnight, Chinese May bean futures were up 50 yuan; Soymeal up 36; Soyoil up 118; Palm oil up 80; Corn up 1 – Malaysian palm oil prices overnight were up 136 ringgit (+2.62%) at 5323 and at all time highs.


Wheat futures were mostly lower overnight led by a 4 cent drop in the nearby March CBOT contract to 7.86-1/4.  For the week, the contract is up 45 cents.  March KC wheat is down 2 to 7.94-1/2, and up nearly 50 cents.  March MPLS wheat is down 1-1/2 cents to 9.43-1/4, up 63 cents this week.  Trade estimates for this morning’s USDA Weekly Export Sales are 175,000 to 400,000 tons.  U.S. south Plains remain dry.  The NOAA 90 day weather forecast calls for above normal temps and below normal precipitation.   For now, futures are in pause due to a lack of new news about Russia and Ukraine tension.  Some World wheat buyers are asking about delivery on open Black Sea wheat unshipped contracts if Russia invades Ukraine.  There is speculation that Russia could send troops to Odessa and cut Ukraine off to exports vs attacking Ukraine.  Despite the need for new export demand, Matif wheat futures traded higher.  The EU wheat export pace may eventually exceed supply.  There are also some that assuming Russia will not invade Ukraine that their final exports could fall short of USDA Russia export estimate.


Cattle futures are called steady to higher as money continues to make its way into the commodity markets this week.  April live cattle start the day at Thursday’s settlement price of 143.175, inside Wednesday’s higher trading range.  For the week, the actively traded contract is up more than $5.00.  The futures’ premium to cash may keep prices choppy throughout the day.  Most cash trade this week has been completed at $137/cwt.  The daily rise in boxed beef prices is noted.  March feeders, at 164.95 are down from last Friday’s settlement price of 166.375.


Hog futures are called mixed after a strong performance this week.  April hogs closed at 94.00 yesterday including a new contract high during the day after a streak of higher sessions beginning with last Friday’s gap higher open.  Since settling at 85.92 last Thursday, the contract has gained nearly $8.00 putting the market in a technically overbought position and ripe for a correction in the near-term, possibly ahead of the weekend.  The contract is well above cash at 76.85.  The five-year average premium of futures to cash at this time of year is 6.90.


Matthew Strelow

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