TFM Sunrise Update 1-15-20


Corn futures are flat. At 9:30 a.m. we should see a signing between the U.S. and China and a big step toward a more normalized trade relationship. It appeared the market was consolidating in front of this potential event. Chinese officials haven’t confirmed any details of the second phase of the plan, and instead have said any future negotiations would depend on how the phase-one deal is implemented, according to Washington.


Soybean futures were flat to fractionally lower overnight. Talk that China may buy as much as 10 mmt US soybean duty free for October offers support. US and China Are expected to sign the deal this morning, but the market is not budging until completed. Favorable South America weather, talk of increased U.S. farmer selling and late headlines that U.S. tariffs on China goods may stay in effect until after the U.S. election despite a new trade deal offers resistance.  Prices have continued to consolidate and should have some additional news today to provide direction.


Wheat futures continued to track higher overnight with new highs for the move posted in Chicago on gains of 4 cents. KC wheat was up 2 and is on the brink of making new multi-month highs, too. The wheat market is clicking on a number of cylinders with a technical uptrend intact, concerns of declining world exportable supplies, and fund buying. Some link the rally to increase global trade and talk China could buy U.S. wheat under a new trade deal. Normally China does not buy U.S. HRS. There is very little U.S. SRW for sale. This suggests if they buy U.S. it would HRW. The dollar has been choppy and is weaker this morning.


Cattle futures are called mixed. Prices ended with small gains yesterday, underpinned by good retails. Expectations are for cash to trade steady and likely futures to continue to trade steady until cutouts decline.


Hog futures are called mixed. Yesterday’s stronger gains may give way to weakness on front months as Feb continues to hold a significant premium to cash.


Kelly Rubisch

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