TFM Sunrise Update 06-25-2021


Corn futures were mostly unchanged overnight.  Dec corn, at 5.37-1/2 is up 1-1/2 cents and mid range of last night’s 8-1/2 cent trading range, but down 30 cents from last Friday’s settlement.  Technically, the new crop contract is testing the 100-day moving average at 5.18-1/2 and a weekly close below that level would look negative for prices.  July is up 2 to 6.55-1/4 and unchanged for the week.  July options expire today and could add some extra volatility to the market.  Forecasts for heavy localized rainfall in much of the Midwest over the next week, with some places in Illinois seeing as much as 10 inches, is weighing on price strength.  Basis bids for U.S. soybeans, corn and wheat shipped by barge to the Gulf Coast and loaded for export remained mostly steady on Thursday.  Spot basis bids for corn softened on Thursday at river terminals across the U.S. Midwest, such as Davenport, IA and Morris, IL.   Heading into next week’s June 30 USDA report, some view the acreage number being released from the USDA may be lower than the market was originally anticipated over the last couple of months.  Survey says: U.S. 2021 corn area is seen rising to 93.8 mil acres as growers plant 2.6 mil more acres of corn this year than previously expected, according to the average estimate of as many as 30 analysts surveyed by Bloomberg.  U.S. June 1 corn stocks are seen declining 870 mil bu from the same period a year ago.


Soybean futures are firm this morning with nearby July up 7-1/2 cents to 13.78-13/4 and down 8 cents on the week.  Nov beans are up 4 to 12.95-3/4 and off 65 cents for the week.  Soybean meal futures have been the weak link in the complex having tumbled through their downside support of $359/ton this week to see the market find an intraday low today of $340/ton. This is the lowest price the meal market has traded since September of 2020.  The last time meal prices were this low front-month soybeans were trading near $10.25 vs. $13.34 today.  Chinese bean futures were down 75 yuan ; soymeal down 6; soyoil down 30; and, corn down 4.  Malaysian palm oil prices overnight were up 98 ringgit (+2.86%) at 3519 on track for its first weekly advance since early June on expectations of higher exports from second-biggest grower Malaysia, and support from strong soybean oil and petroleum prices.  A Bloomberg survey for next week’s USDA report on Wednesday shows soybean planting at 89.1 mil acres, a rise of 1.5 million from the USDA’s March projection.  Soybean stocks are seen at 770 mil bu vs 1.38 billion.


Winter wheat futures were up 5 to 8 cents overnight led by 15 cent gains in MPLS spring wheat.  Sept CBOT and KC contracts are at 6.57 and 6.21-1/2, respectively with Chicago down about a dime and KC up a nickel for the week.  Sept MPLS wheat is up 50 cents for the week and sitting at a 2-1/2 week high while HRW and SRW contracts consolidate above 200-day moving average support levels.  Rally attempts for the winter wheat contracts have fizzled this week in the wake of weaker row crop markets and seasonal harvest pressure, though delays are likely due to rain.  Spring wheat continues to find strength from isolated cases of the crop burning up in the Dakotas and NW MN.  Hot and dry forecasts look to add to the 37% of the crop being rated poor-to-very poor.  Wheat area in next week’s report is surveyed by Bloomberg to be 46 mil acres, vs 46.4 million.


Cattle futures are called mixed ahead of this afternoon’s USDA Cattle on Feed Report.  Expectations for the report are for total cattle on Feed as of June 1 at 100.6%, Placements at 95%, and Marketings at 123%.  Overall, live cattle prices are consolidating working in a sideways fashion within the most recent trading range.  Strong cash trade this week has help support the market this week. Trade has been building this week ranging from $122 in the south to $125-126 trade in the north.  There was some additional cash cattle trade from $125 – $126 in Iowa & Nebraska yesterday, with Texas seeing a few sales at $122.  Most trade is likely complete for the week, but some cleanup trade is possible today.  Retail values have been working strongly lower, weighing on the futures prices. At Thursday’s close, Choice carcasses lost an additional 4.63 to 307.42, and Select was firmer, gaining .73 to 276.14. Load count was moderate at 132 loads.


Hog futures are called mixed after experiencing additional selling pressure throughout the week, weighing heavily on the front end of the market.  With the limit lower close in the July contract, the hog market will keep expanded limits of 4.50 in place again today.  Technically, the market is extremely oversold, and due for a bounce.  Aug hogs are trading nearly $22 off the high from June 7 in search of a low.  Fundamentals have turned more negative.  The Lean hog index traded 1.14 lower to 119.59, as the cash market weakens.  Retail carcass values are sharply lower, but did pop at midday on Thursday.  Carcasses gained 7.00 at midday trade and held most of those gains closing 5.17 higher to 112.99 on moderate demand of 336 loads.  Selling pressure continued into the release of the Quarterly hogs and Pigs report that showed U.S. inventory of all hogs and pigs on June 1, 2021 at 75.7 million head.  This was down 2% from June 1, 2020, but up 1 % from March 1, 2021.  Breeding inventory, at 6.23 million head, was down 2 % from last year, but up slightly from the previous quarter.  The market was expecting hog numbers to be tighter, and the report confirmed those values.  This may be enough to possibly signal a bottom into the market, though weakening fundamentals may keep the market searching.



Matthew Strelow

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