TFM Sunrise Update 04-01-2021

The CME and Total Farm Marketing offices will be closed Friday, April 2, 2021, in observance of Good Friday.

CORN

Corn futures gapped higher overnight, tacking on gains of as much as 20-3/4 cents in the May contract to a new high of 5.85.  Dec made it to 4.93 on gains of 15-1/2 cents.  Follow-through price strength fueled overnight buying after a rare limit-up move and close in both corn and beans following a lower-than-expected acreage estimate in the March 31 USDA report.  Expanded limits are in effect today for both markets.  For corn, the daily limit is 40 cents.  Stocks were in line with trade guesses, however, quarterly stocks near 7.701 bil bu vs 7.767 expected and 7.952 last year may suggest stocks could get tight before the next harvest.  The April USDA Monthly Supply/Demand report is already coming up next Friday, however, 2021 weather outlooks will be on the traders’ radar from this point forward.  Trade estimates for this morning’s USDA Weekly Export Sales are 600,000 to 1.20 mil tons for new crop, Zero to 300,000 tons for new crop.

SOYBEANS

The soy complex started the overnight session higher on follow-through from yesterday’s limit-higher settlement in beans and nearby meal, but have since fallen back to steady levels in nearby beans and lower in meal and soyoil contracts.  May beans advanced 20 cents to 14.56-1/4, falling short of the contract high of 14.60 from March 8.  Nov is still up 16 cents this morning to 12.72-1/4, down 12-3/4 from the contract’s new high of 12.85.  The daily trading limit is expanded from 70 cents to 1.05 for today.  The USDA estimated U.S. 2021 soybean acres near 87.6 million vs 90.0 expected and 83.1 last year with many questioning whether, or not potential double crop acres were counted.  USDA estimated March 1 soybean stocks near 1.564 mil bu vs 1.534 expected and 2.255 last year.  Bullish traders are using carryout closer to 100 mil bu vs USDA 120.  Trade estimates for this morning’s USDA Weekly Export Sales are 100,000 to 450,000 tons for old crop, Zero to 200,000 tons for new crop.  Chinese Ag futures (May) settled up 114 yuan in soybeans, up 16 in Corn, up 95 in Soymeal, up 84 in Soyoil, and up 122 in Palm Oil.  Malaysian palm oil prices were up 117 ringgit at 3,543 (basis June) at midsession following gains in soyoil prices.

WHEAT

Wheat futures were narrowly mixed overnight, consolidating after posting bullish reversals yesterday while carried higher higher by row crops.  May CBOT and KC wheat is down 2 cents to 6.15 and 5.73-3/4, respectively after bouncing off 200-day moving average support.  World wheat prices dropped on improved U.S. weather and lower World trade.  USDA wheat acres at 46.3 million was up from trade guesses of 45.0 and 44.3 last year.  Winter wheat acres were near 33.0 vs 31.8 expected and 30.4 last year.  MPLS May wheat is unchanged at 6.10-3/4.   Spring Wheat acres were near 11.7 versus 11.6 expected and 12.2 last year.  Some feel higher corn and soybean prices could drop spring wheat acres from yesterday’s USDA guess.  March 1 Stocks were near 1.314 mil bu vs 1.272 expected and 1.415 last year.  Next Monday, USDA will begin to publish weekly crop ratings.  For now, look for wheat to take its cues from corn.  Trade estimates for this morning’s USDA Weekly Export Sales are 125,000 to 450,000 for old crop, 75,000 to 200,000 for new crop. In overnight tender activity: Saudi Arabia seeks 295,000 tons of optional-origin wheat, Algeria bought 500,000 tons of optional-origin milling wheat; Thailand passed on 504,000 tons of optional-origin feed wheat.

CATTLE

Opening calls for cattle are steady to higher after trading mostly higher in a very choppy session on Wednesday.  Despite the strong move higher in the grain markets, the fundamentals in cattle are still supportive.  April options expire today, and will likely keep some pressure on the front month.  The market got its first look at cash trade for the week from the Fed Cattle Exchange where bids ranged from $116 to $118/cwt.  That strength carried into the countryside with first bids seen at $118.  Retail beef stayed strong, closing higher.  Choice carcasses gained 2.29 to 247.12, and Select was 2.21 higher to 238.13.  Even with the stronger prices, movement was moderate at 116 loads. The stronger retail value allow the packer to bid up for cash cattle.  Feeder markets finished with heavy losses on Wednesday.  Despite the strength in the live cattle market, the surge higher in grains was the selling trigger in the Feeder cattle market.

HOGS

Hogs are called higher.  Futures finished mixed on Wednesday, as the market saw some retreat from the recent bull spreading supporting the front end futures.  Despite the choppy trade, the fundamentals stay supportive.  Cash remains strong with the Lean Hog Index gaining .66 to 98.04.  The index and the cash market is trading at its highest levels in 8 years, and the strong demand keeps that trend intact.  Retail values were strong at midday, as carcasses gained 2.08 to 108.97 on the close with good movement of 306 loads.  Chinese pork prices are trending higher as the country deals with ASF.  Weekly export sales report this morning will likely stay supportive, and could help set the price trend into the Easter holiday weekend.  Farther out, deferred contracts are maintaining their higher trend, and Wednesday’s strong move in grains support the idea of tighter long-term supplies as producers negotiate higher input costs.

Author

Matthew Strelow

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