TFM Sunrise Update 07-14-2021


Corn futures were mainly unchanged overnight with Sept down 1-1/2 cents to 5.49-3/4 and Dec up a fraction to 5.41.  The July contract, at 6.77, goes off the board today.  Prices are subdued after sustained volatility this growing season, as well as over the past year.  Traders will quantify current price levels as rain moves into the forecast for the next several days with meaningful rainfall totals in South Dakota and Minnesota.  The 6 to 14 Day forecast then turns hot a dry.  Weekly Ethanol Stats will be out today, Exports tomorrow.  Ethanol output projections are viewed as being lower than last week and stockpiles are estimated at 21.391 mil bbl vs 21.149 mil a week ago.


Soybean futures are firm this morning.  July beans, at 14.38, will expire today.  Aug is up 7 to 14.24-3/4, and Nov is up 2-1/2 cents to 13.54-1/4.  Bean meal contracts are firm.  Soyoil futures are weaker while consolidating from a 3-day rally.  Chinese Sept bean futures were down 11 yuan ; Soymeal up 10; Soyoil up 70; Palm oil up 10; Corn up 28.  Malaysian palm oil prices overnight were up 52 ringgit (+1.31%) at 4029.  Bean prices remain supported, but may be running into resistance as a system of rain begins to form up north bringing relief to drought-stricken areas such as South Dakota before turning hot a dry again next week.  Unfortunately some of the storm cells are forecast to include high winds.  U.S. soybean crushings likely dropped in June to the lowest in four months amid thinning soy supplies and scattered processor downtime, analysts said ahead of a NOPA report due out tomorrow.


Wheat futures were up overnight with Sept Chicago up as much as 10-1/2 cents to 6.44-3/4, KC up 7-1/2 to 6.19-1/4; And, Sept MPLS up 6 to 8.67-3/4.  The July contracts in those same contracts are 6.28-3/4, 6.12-1/2 and 8.67, respectively ahead of today’s expiration.  The dollar is down this morning after surging to a 3 month high, which has offered some resistance to U.S. wheat exports.  Spot basis bids for hard red winter wheat were even across the Southern U.S. Plains on Tuesday, as harvest continues to progress.  Protein premiums for hard red winter wheat delivered by rail to or through Kansas City fell by 5 cents per bushel for wheat with protein content of 11% and 11.2%, while increasing by 5 cents per bushel for 11.6% protein wheat and adding 8 cents for wheat with protein of 11.8%, CME Group data showed.


Cattle futures are called mixed to higher on follow-through from moderate to strong gains on Tuesday as prices pushed back to challenge resistance over the top of the futures contracts.   After Monday’s sluggish tone, prices found buying support on Tuesday, as the market saw some short covering before the cash market started to develop.  Feeder cattle followed live cattle higher after fighting off early selling pressure.  Prices were pulled off early session lows as corn prices began to stabilize.  Very light cash trade was beginning to develop for cash this week with light trade in the south at $119-120, steady with last week.  Northern trade is still quiet, but asking prices are around $122, which would be steady to lower.  Cash trade will take the remainder of the week to develop.  Box beef carcasses were mixed at midday, but finished lower on the close.  Choice traded 1.66 lower to 273.34, and Select was 2.03 lower to 256.74.  The Choice/Select spread has been tightening, down to 16.60, which may be reflecting the build up of cattle in the lots.


Hog calls are mixed to higher in a bid to move higher for a fourth consecutive session.  The move higher has improved the technical picture.  This should open the door for additional short covering today.  July hog futures were softer at 112.25, but the contact expires tomorrow, and traders are squaring up to the index.  August hogs are pushing to the top of the trading range, and added a small gap into the charts, which is a signal of strength.  The cash hog index gained .36 yesterday to 110.10, and is still holding a 5.00 premium to August.  The main reason for support in the hog market has been the strengthening of pork carcass values and some new found demand hope.  Ongoing concerns about ASF in China may have been validated by the strong performance on last week’s export totals.  The turn higher in carcass values may be more of a sign that buyers are back in the U.S. export market.  Midday carcass values were firmer, and prices finished with gains, closing 1.08 higher to 118.81 on moderate demand of 392 loads.



Matthew Strelow

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