TFM Sunrise Update 03-30-2021


Corn futures were  unchanged overnight as traders continue to refrain from from asserting themselves as position holders in front of highly anticipated Quarterly Grains Stocks and Acreage data scheduled for release mid-morning tomorrow from USDA.  Technically, nearby corn futures have settled into at rather tight trading range since establishing a market top on February 9.  December corn, at 4.60-1/2, peaked at 4.85-3/4 on March 8 and has been slumping ever since.  Last year, USDA’s March acreage estimate was near 97.0 mil with final acres near 90.8.  A wet spring increased prevent plant acres especially in the northwest.  Trade estimates this time are near 93.2 with a range of 92.0-94.5.  There is also some fear that USDA could find bushels on their March 1 stocks.  Over the last 16 years, stocks have been above trade estimates 10 times for an average of 137 mil bu and below 6 years by 141 mil bu.  The key could be quarterly feed and residual usage.  Most estimate feed at 1.345 bil bu.  Weekly U.S. corn exports were near 66 mil bu with some expectations averaging 69 mil per week with final exports near 3.0 bil bu versus USDA’s guess of 2.6.  Season-to-date exports are 613 mil bu above last year vs USDA’s guess of a 772 increase.  In the south, corn planting was 74% complete in LA, 24% in MS and 4% complete in AR.  In Brazil, the corn crop is 98% planted and weather remains dry, according to a report by AgRural.


Soybeans were weaker overnight.  May and Nov contracts shed 4 cents to 13.89 and 12.00, respectively as quarter-end and pre-USDA report liquidation continues to offer resistance to soybeans.  Meal is firm and soyoil lower while consolidating in the lower portion of Monday’s ranges.  Chinese Ag futures (May) settled up 44 yuan in soybeans, down 23 in Corn, down 21 in Soymeal, down 60 in Soyoil, and down 32 in Palm Oil.  Malaysian palm oil prices were down 105 ringgit at 3,647 (basis June) at midsession awaiting Malaysian, USDA government updated data.  Trade estimates for U.S. 2021 soybean acres average near 90.0 mil versus 83.1 last year.  The range of guesses is 86.1 to 91.6.  There is also concern that USDA could find bushels on the March 31 stocks estimate.  Trade guesses for U.S. quarterly stocks are near 1.534 bil bu versus 2.255 last year.  The range of guesses are 1.440 to 1.825…. 1.440 could suggest a 20 cent rally while 1.825 could suggest a 20 cent break.


Wheat futures were softer overnight, losing 4 cents in the SRW and HRW contracts.  Nearby may lost 4-1/2 cents to 6.12-1/4 (CBOT) and 5.65 (KC), but are holding above recent daily lows.  May MPLS spring wheat futures etched a new low for the move to 6.06-3/4 while losing 3-1/2 cents.  Poor Weekly Export Sales are holding prices back, but the markets are holding together rather well in light of the widespread moisture this month across much of the winter wheat areas.  The two-week weather forecast is dry and the crop will likely need to see additional rains to insure above average yields.  The USDA’s NASS rated 50% of the KS crop in good-to-excellent condition, up from 45% a week earlier.  In TX, 28% of the crop was G/E, down from 29% the previous week with 50% planted vs the 5-yr average of 46%.  For Oklahoma, 61% of the crop is in G/E shape, down from 62% a week earlier.  CO wheat was 28% G/E vs 33% a week earlier.  USDA’s March report has the trade estimating wheat stocks at 1.278 bil bu vs 1.415 last year and 1.674 on Dec 1, 2020.  The trade also estimates U.S. 2021 all wheat acres at 45.0 vs 44.3 last year.


Opening calls call for cattle are steady to higher.  Cattle markets look technically strong and the money seems to be flowing into the market, supported by the improved fundamentals.  Weakness in grains, and a strong improvement in fundamentals spelled strength on Monday sending June and August contracts to new contract highs including a contract high close for June.  Cash trade is undeveloped to start the week, but asking prices will likely target $118 to $120 levels.  The cash market will likely hold off to the middle to end of the week.  Choice carcasses gained 1.87 to 239.53 and Select was 4.73 higher to 232.50.  Demand was light to moderate at 96 loads.  The strong demand tone and the prospects of improved spring demand will likely keep a bid under the cattle market in the short-term.  The Feeder complex was very strong, closing with contract highs Monday, fueled by the weakness in grains and long-term live cattle optimism.


Hogs are called firmer despite showing signs of looking toppy and being technically over-bought.  The hog market was softer to start the week as the market saw some profit taking and consolidation. Despite the weakness, hog futures still battled off of early session lows supported by the strong fundamentals.  The cash market remains red hot, and the index jumped 1.38 to 95.97.  That strength carried into the countryside cash market keeping the market bullish.  The strength in cash stems from the tighter supply picture of hogs.  Last week’s slaughter with Saturday kills, was estimated at 2.544 million head. This was 20,000 more than last week, but 220,000 under last year.  Demand-wise, carcass values pushed higher at midday, gaining 3.95 to 111.48, and held some of those gains, closing .31 higher to 107.84 on moderate demand of 305 loads.


Matthew Strelow

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