TFM Sunrise Update 01-28-2021


Corn futures were narrowly mixed overnight, consolidating in the lower half of yesterday’s new higher trading ranges.  Nearby, old crop futures are firm this morning, up 1 to 2 cents.  Dec is a penny lower.  Trade estimates for this morning’s USDA Weekly Export Sales are 900,000 to 1.60  mil tons.  In Brazil, conditions are still expected to be good for most key production areas with a few exceptions.  The northeast will continue to need more rain.  Rio Grande do Sul will still be too wet in the next seven to ten days with some expected flooding (and in southern Paraguay as well). There may also be some flooding in Santa Catarina and Parana; however, the greatest rainfall is likely in Rio Grande do Sul.  In Argentina, conditions will still be mostly good for crops with a favorable mix of rain and sunshine in most areas.  Some of southern La Pampa and southwestern Buenos Aires will still likely be too dry.  Northeastern parts of the nation, such as Corrientes, Misiones, and some immediate nearby areas will be notably wet in the first week of the outlook with flooding expected.


Soybean futures were unchanged overnight.  The complex is maintaining a positive tilt for long-term and for the week.  March beans are situated near 13.75 where 10 and 20-day moving averages are converging on the daily charts.  Nov beans are right at 11.50.  Trade estimates for Weekly Export Sales are 800,000 to 1.40 mil tons for old crop, 250,000 to 550,000 tons for new crop. Meal sales are expected near 150,000 to 400,000 tons and oil sales are expected near 10,000 to 30,000 tons.


Wheat futures traded lower overnight led by Chicago.  March CBOT shed as much as 14 cents, March KC 13 cents, and March Mpls almost a dime.  A rally back to recent highs in the dollar is viewed as a negative factor for wheat trade, but the availability of U.S. wheat supplies versus Black Sea and Australia are still viewed as supportive for the market.  Trade estimates for this morning’s USDA Weekly Export Sales are 250,000 to 600,000 tons.  Overnight tender Activity shows Jordan buying 60,000 tons of optional-origin wheat, Algeria bought 630,000 to 660,000 tons of optional-origin wheat; and, Japan bought 60,715 tons of Australian wheat.  Technically, prices could go either way after slumping back mid-range of this year’s trading pattern.


Cattle futures are called mixed after closing moderately lower in the nearby live contracts on Wednesday.  The premium of futures over cash may lead to choppy action today.  The fed cattle exchange sold several pens of cattle at $113/cwt yesterday and a few cattle traded in Iowa at $110 versus the spot February futures close of $116.45.  Most asking prices remain at $114-$116.  Higher boxed beef prices this week contributed to expanding packing margins.  The next area of resistance for Feb is 116.92, then 117.42.  On the downside, first support is seen at 115.97 and then 115.50. 


Lean hog futures are called steady to weaker.  Prices failed to take out Tuesday’s highs yesterday before closing lower and below Tuesday’s lows.  This produced a bearish key reversal in the June contract that may spark further selling interest into the end of the week.  Weekly Export Sales today might change that depending on how strong the numbers are.  Weekly average weights for IA and MN are 291.6 lbs compared to 291.8 lbs last week and 287.3 a year ago.


Matthew Strelow

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