TFM Sunrise Update 10-08-2021


Corn futures were up 3 to 4 cents overnight while maintaining sideways movement on the charts.  For the week, Dec corn, at 3.37 is down about 4 cents.  A tight supply scenario and rallying energy prices keep corn supported through the harvest time-frame, but prices remain stuck in neutral until more market-moving news becomes available.  Direction will be choppy heading into next Tuesday’s USDA October Supply/Demand report as traders wait to see if the agency will make adjustments.  Basis bids for corn shipped by barge to the U.S. Gulf Coast were steady to slightly weaker on Thursday on rising supplies, although declines were limited by solid export demand


The soy complex was higher overnight led by a new high seven-week high in soyoil.  Nov beans are up a dime this morning to 12.57-1/4, marking a 13 cent gain for the week.  Overnight, China re-opened after holiday.  Jan bean futures traded up 248 yuan ; Soymeal down 119; Soyoil up 442; Palm oil up 570; Corn down 8;  Malaysian palm oil prices overnight were up 123 ringgit (+2.54%) at 4972 heading for its third straight weekly advance, the longest winning streak since July, spurred by tight supplies of global vegetable oils and stronger petroleum prices.  Spot basis bids for soybeans firmed at U.S. Midwest river elevators and some processing sites on Thursday as rains slowed the harvest in a few areas.


Wheat futures were firm overnight.  Dec Chicago futures are up 3-3/4 cents to 7.45 and but have lost a dime this week in a defined five-day down-trend.  Dec KC wheat is up 4-3/4 cents to 7.46, and off 13 cents for the week.  Dec MPLS future are up a penny this morning to 9.43-1/4 and up 20 cents for the week including yesterday’s new contract high at 9.49.  Wheat prices have continued to outperform corn and soybeans to the topside, as front month Chicago wheat is trading within about 40 cents of it’s highest price traded since 2013.  Support for Chicago is likely coming from the Minneapolis spring wheat, and also from Russian wheat prices as they’ve moved higher for 12 straight weeks  Spot basis bids for hard red winter (HRW) wheat were unchanged on Thursday in the southern U.S. Plains and cash trade was quiet as producers concentrated on planting the 2022 wheat crop and harvesting corn, soybeans and sorghum.


Cattle futures calls are mixed for today after Feeder cattle led the cattle markets to their highest prices in nearly a month.  Follow through buying and short covering this week has been more tied to technical buying versus fundamentals.  Cash trade was quiet on Thursday, with the bulk of the work done for the week.  Most deals happened at $124 in the South, steady to $1 higher in some areas. Northern dress trade was marked at $196, steady with last week.  Retail values were mixed at the close, with choice losing 1.32 to 285.30, but Select lifted 1.53 to 264.44.  The load count was light/moderate at 185 loads.   Like live cattle, Feeder gains may need to be cautious with the feeder cash index trading at 153.80, a $6.500 discount to the front-month Oct futures, which expire on 10/14.  The cattle market has posted an impressive quick recovery, but could be running into some overhead resistance.  The down trend is still intact, and the overall fundamentals may limit further upside.


Hogs are called mixed.  Technically, the hog market uptrend is still intact, but was due for some correction.  Support levels at the 100-day MA held again yesterday, but may need stronger overall fundamental numbers to initiate new buying.  Triple digit gains in the cattle complex and spill over outside-market strength helped push the hog market slightly higher.  Thursday’s closing direct trade was .17 higher on carcass-based prices to $70.18, and live pricing was not reported due to “confidentiality”.  The steady tone could help support futures this morning.  The Lean Hog Index traded 0.60 lower to 93.51. Maintaining a premium to October and December hogs should help support the front of the market.  Weekly export sales failed to move the market, with new sales last week at 22,100MT, down 48% from last week’s strong number.  Mexico was the primary buyer of U.S. pork, and China was absent from the report.  Pork carcasses at midday traded higher, but lost those gains into the close, losing .60 to 112.26.  The load count was moderate at 366 loads.



Matthew Strelow

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