TFM Sunrise Update 07-15-2021


Corn futures traded two-sided overnight and are 3 to 4 cents lower this morning with Sept at 5.64-1/2 and Dec at 5.54-1/2.  Both contracts are respecting 50-day moving average resistance levels after trading higher this week.  Technically, the corn market is forming a series of lower highs since peaking in early May, a sign that the trend is weakening as periodic rains help stabilize Weekly Crop Ratings.  Trade estimates for this morning’s USDA Weekly Export Sales are 50,000 to 900,000 tons for old and new crop combined.  Midwest weather is to see scattered showers today and tomorrow in the west and south on Friday and Saturday. . . mostly dry Sunday.  Temperatures are forecast near to below normal through Sunday.  The Eastern portion is to receive scattered showers through Saturday, south Sunday with temps near to above normal through Friday, near to below normal Saturday-Sunday.  The 6 to 10 day outlook is mostly dry Monday and Tuesday, isolated showers east Wednesday.  Mostly dry Thursday-Friday.  Temperatures near to above normal north and near to below normal south Monday-Wednesday, near to above normal Thursday-Friday.


Soybean futures are mixed this morning.  Aug is up 2 to 14.55, and Nov is down 1/2 cent to 13.83-3/4.  The rest of the bean complex is also mixed as bean meal eases from yesterday’s rally, and soyoil surges to a one-month high in a bid to challenge contract highs from June 7.   Chinese Sept bean futures were down 72 yuan ; Soymeal up 39; Soyoil up 92;  Malaysian palm oil prices overnight were up 147 ringgit (+3.66%) at 4168 extending its rally to a third day on concerns about production in top growers and stronger prices of major competing vegetable oils.  Trade estimates for this morning’s USDA Weekly Export Sales are 200,000 to 600,000 tons for new crop.  U.S. soybean crushings likely dropped in June to 159.5 mil bu, the lowest in four months amid thinning soy supplies and scattered processor downtime, analysts said ahead today’s NOPA report.  The crush is seen 4.7% lower vs June of last year, and a decline of 2.5% vs a month ago.  Oil stocks at the end of last month are seen at 1.637 bil lbs vs 1.78 bil a year earlier.


Winter wheat futures are mostly unchanged this morning while settling in atop yesterday’s higher trading ranges, but below 100-day moving average resistance areas.  Sept Chicago contracts are at 6.54, KC at 6.26, buoyed by too much rain in the EU causing concern for French and German quality, and a continued dry forecast for the spring wheat areas in Canada and the U.S.  Sept MPLS spring wheat is up 7 to a third consecutive new contract high at 8.79-3/4.  Trade estimates for this morning’s USDA Weekly Export Sales are 200,000 to 500,000 tons for old and new crop combined.  Egypt’s state grains buyer, the General Authority for Supply Commodities said it bought 180,000 tons of Romanian wheat in an international tender for shipment Sept. 11-20.


Cattle futures are called mixed to lower after weak price action yesterday.  Futures finished at the bottom of the trading range and could open the door for follow through today.  Cash trade was very light and disappointing to the market.  So far this week a light to moderate Southern live trade has taken place at mostly $119 to $120, fully steady with last week’s business.  In the North only a very light trade has been reported.  Retail box beef trade stays soft with Choice carcasses slipping .46 to 272.88 and Select down 2.99 to 253.75.  Demand was moderate on 136 loads.  Weaker retails could keep pressure on prices today.  Feeders saw strong triple digit losses as the strong grain market and weak live cattle pressured the market.  Feeder charts broke technically, and could see additional long liquidation today.


Hog calls are mixed to lower on lingering profit taking and position squaring.  July hog futures finished their trading life down .125 at 112.375.  The Lean hog index traded higher on Wednesday, gaining .57 to 110.67 and is at a $5.00 premium to the August contract, which could support the futures market.  Technical price action for the August contract posted a daily topping signal, though.  Strong fundamental news will be key in maintaining this short-term rally.  Retail values traded quietly on Wednesday, but closed softer losing .12 to 118.69.  Demand was moderate on 270 loads.  Weekly export sales will be closely watch this morning.  Last week’s sales were supportive of prices, and Chinese demand returned helping fuel the end of week rally.   Newswires report China’s pork output jumping 35.9% to 27.2 million tons in the first six months from a year earlier.  The nation’s hog herd reached 439 million at the end of June, up 29.2% y/y.  The breeding sow herd was 45.6 million, an increase of 25.7%.  Total meat output including pork, beef, mutton and chicken climbed 23% to 42.9 mil tons in the first half.



Matthew Strelow

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