TFM Sunrise Update 1-7-2021


Corn futures opened mostly steady last night after closing mid-range of yesterday’s contract and multi-year high trading ranges.  Nearby March corn is back below $5.00 at 4.88 as the market awaits next Tuesday’s USDA Supply and Demand report and with the $5 barrier acting as resistance.  Dec corn is adhering to the 4.40 area for now, down 2-1/2 cents to 4.38-3/4.  Weekly Export Sales are on tap for today with trade estimates ranging between 600,000 and 1.20 mil tons versus 946, 547 tons last week.  Traders are likely taking a step back from the recent buying spree ahead of the weekend and next Tuesday’s key January Crop report.


Soybean futures were down a dime overnight, stabilizing near contract highs.  Dalian soybean and soymeal contracts, as well as  Malaysian palmoil futures have also made new highs this week.  Jan beans, at 13.55-1/2 are likely experiencing some profit-taking pressure and the beginning of some position-squaring ahead of Tuesday’s report.  Nov beans were up a nickel to 11.58 overnight before turning red, down a penny by this morning.  Weather maps hint of rain next week for parts of Argentina.  Trade estimates for this morning’s USDA Weekly Export Sales are 400,000 to 800,000 tons for 2020-21 crop, 100,000 to 300,000 tons for 2021-22.  Last week’s export sales came in at 695,398 and 315,800 tons, respectively.


Wheat futures were mostly unchanged overnight, supported by recent technical strength and outside markets including a weaker dollar.  In addition, prices should remain supported by rising Black Sea cash wheat prices and strong Paris milling wheat levels.  Ukraine’s production is expected to be 64.50 million metric tons versus last year’s 75.10 million metric tons.  Trade estimates for this morning’s USDA Weekly Export Sales are 250,000 to 500,000 tons versus 520,567 tons a week ago.


Cattle futures are called steady to higher ahead of what can be expected to be a quiet morning as prices look for direction from the cash market.  Cash is still subdued for the week.  Yesterday’s Fed Cattle Exchange had bids to $112.25, but limited trade.  Countryside bids are still quiet with asking prices at $114 or higher.  Slaughter was estimated at 117,000 head, steady with last week, but 7,000 under last year.  This may be reflective of the tighter cattle supply.  Carcass values finished slightly lower, down .63 to 205.27 and Select lost .41 to 196.08 with moderate movement at 124 loads. 


Lean hog calls are steady to lower ahead of this morning’s USDA Weekly Export Sales.  Prices failed to push through overhead resistance on the Feb and April charts.  Charts saw negative reversals posted across the board which could lead to additional technical selling this morning.  Nearby futures challenged the October high and failed as heavy production and available hogs for slaughter weigh on the market.  We view higher grain prices offering long-term support while limiting expansion due to higher feed costs.  Pork carcasses had very mild gains, finishing the day .02 higher to 77.65, but carcasses may be topping out for the week.  Strong product movement was seen at 421 loads.  The Lean hog index closed .85 higher to 61.47 while trading 8.30 under February.


Matthew Strelow

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