TFM Sunrise Update 10-05-2021


Corn futures were down 3-3-3/4 cents overnight to 5.46 (Dec) while adhering to the contract’s 50-day moving average.  The 100-day moving average at 5.56 is acting as a ceiling of resistance for traders while the 200-day down at 5.22 holds support while the market struggles to maintain some semblance of an uptrend during U.S. harvest.  Corn harvest is 29% vs 18% last week, and 24% a year ago. Ratings are 59% G/E vs 59% last week, and 62% a year ago.  Maturity is 88% vs 74% last week, and 85% a year ago. StoneX reported an uptick in row crop estimates compared to USDA.  The firm estimates corn yields at 176.6 bu/acre and production at 15.022 billion bu. That’s above the USDA’s latest estimate for a yield of 176.3 bu/acre and production of 14.996 billion bu.  Updated USDA estimates are expected next week.

Meanwhile, the Biden Administration will directly engage with Beijing in the coming days to enforce commitments in the countries’ trade deal and start a new process to exclude certain products from U.S. tariffs, according to senior administration officials.  Traders will parse through a speech by U.S. Trade Representative Katherine Tai on Monday about the Biden administration’s approach to the bilateral trade relationship with China.


The soy complex was narrowly mixed overnight.  Beans are unchanged, meal down slightly and soy oil firm.  Nov beans did dip lower overnight to etch another new low at 12.31, marking the lowest point for the contract since March 31.  A lower close today would mark a fourth consecutive day of weakness following USDA’s increase in beginning stocks, augmented by slower demand from China and steady U.S. harvest progress.  Technically, Nov beans have tumbled through Moving Average support areas and traders now need to process how low the market needs to fall before uncovering any interest in buying value.   With rising fertilizer costs facing 2022 corn growers, talk of switching acres to beans is a common theme.  StoneX, yesterday, estimated U.S. soybean yields of 51.3 bu/acre and production of 4.436 billion bu.  That’s above USDA’s estimate for 50.6 bu/acre and production for 4.374 billion.  Chinese markets are closed this week for holiday.  Malaysian palm oil prices overnight were up 153 ringgit (+3.34%) at 4736 extending gains to a fresh record on a wave of bullish factors, including the outlook for lower inventories in Malaysia, sturdy demand and concerns that production by top growers will fall short of expectations.  Weekly crop progress showed soybeans 58% G/E vs 58% last week, and 64% a year ago.  Leaf drop at 86% vs 75% last week, and 83% a year ago; And, harvest at 34% vs 16% last week, and 35% a year ago.


Wheat futures fell overnight with winter wheat contracts leading the way.  Dec CBOT wheat is down a dime this morning to 7.46-1/2.  Dec KC is down 14-1/4 cents to 7.40; And, Dec MPLS Spring wheat is down 6 to 9.24-1/4.  A downturn yesterday from Friday’s rally looks to have fueled the correction overnight after prices appeared ready to make a run at the August highs.  Winter wheat planting is 47% complete vs 34% last week, and 50% a year ago.  Emergence is 19% vs 9% last week, and 22% a year ago.


Cattle futures are called steady to firmer after Monday’s strong rebound in both live and feeders.  The up move signals a near-term low for the market after recent declines led by beef prices and stagnant cash market activity.  Boxed beef cutout values were down 2.51  at midsession yesterday.  Nearby October live cattle, at 122.62 face the next area of resistance near 123.82 ahead of a 124.62 objective.  December cattle, at 128.05 have an upside target at 130 and then 131.62 with support holding down at 125.55.


Hogs are called mixed to lower.  Overbought technicals should lead to follow-through selling in hogs today, especially amid a seasonal uptick in supply.  With the sharp break in Chinese pig prices, U.S. exports may suffer.  December hogs closed down yesterday to 83.10 and face resistance up at 84.92 with key support down at 80.17 should the downward correction continue.



Matthew Strelow

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