TFM Sunrise Update 10-1-20


Corn futures were up a nickel overnight, eclipsing new multi month highs posted in Wednesday’s trade following surprising USDA Quarterly Stocks numbers.  Dec corn ascended to 3.83 so far this week while targeting 3.86-3/4, the high from March 4.  The smaller than expected beginning stocks coupled with increased exports help lift prices and brighten pricing opportunities for growers. Trade estimates for this morning’s USDA Weekly Export sales are 250,000 to 500,000 tons.  Heading into today, Managed Money is net long an estimated 145,000 corn contracts.


Soybean futures were up to just over yesterday’s session highs overnight.  Nov beans got to 10.35 on gains of 11-1/2 cents before trimming gains.  Dec Meal contracts are firm and mid range of Wednesday’s new contract high trading ranges.  Smaller than expected U.S. soybean ending stocks as of September 1st is propelling prices as harvest begins in earnest in a counter-seasonal move.  On the upside, the next area of resistance is around 10.47 where the 10.46-3/4 contract high from two weeks ago stands, and then 10.64-1/2.  Today’s Weekly Export Sales are expected to come in at 1.50 to 2.50 mil tons for beans, 150,000 to 400,000 tons for meal; and, zero to 30,000 tons for soyoil.  Managed money increased the net long position by buying 30,000 bean contracts to get to an estimated 217,000 long contracts.  They’re net long an estimated 68,000 lots of soymeal; and, 99,000 soyoil.


The wheat complex was mostly unchanged overnight after stunning the marketplace with strong double-digit gains on Wednesday.  Dec Chicago wheat, at 5.77-1/2 is targeting this year’s high set in January at 6.05-1/2.  The contract reached 5.92-3/4 yesterday after USDA revealed world and U.S. stocks numbers either below, or in the lower range of trade estimates.  The smaller than expected production was accompanied by better than expected usage data, too.  Managed Money is net long an estimated 30,000 SRW wheat contracts.  Trade estimates for this morning’s USDA Weekly Export sales are 250,000 to 500,000 tons. Tender Activity shows Jordan seeking 120,000 ton s of optional-origin wheat.  Thailand bought 70,000 tons of optional-origin feed wheat out of a previous tender for 3 times that amount.  Weather-wise, the Southern Plains over the 6 to 10 day period sees little to no rainfall for most of the region. Temps will be running below average through the weekend turning to average to above for most of next week.  Elsewhere, there is no much hope of drought relief in Russia’s Southern Region. And any further relief in Ukraine is confined to the next three days favoring western portions of the nation. Showers in the southern Balkan Countries will be welcome and temporarily beneficial to winter crop planting and establishment in the region, but brief delays to fieldwork will result through the weekend. Western Europe is forecast to get ample rainfall, not as much in the eastern portions.


Cattle calls are for steady to higher after breaking maintaining some semblance of an uptrend in live cattle despite closing weaker in Wednesday’s trade.  Feeders look a little more shaky with after giving up good gains from Tuesday’s breakout to the upside.  Cash trade is still mostly undeveloped, but signs are indicating $2.00/cwt higher than last week, and boxed beef values are staying firm.  We’ll watch for Weekly Export Sales for cues of today’s mid-day price movement.


Lean hog futures are called steady to higher as the trade questions USDA’s numbers and front month supplies appear tighter than reported.  Strength in the cash market, which was up 1.48 to 75.91 on Wednesday is helping buoy the futures market where October stands at 72.80 and Dec at 63.10 coming into today’s trade.  Overhead resistance can be gleaned from softer carcass values.  Meanwhile, expectations for strong export sales will help support deferred contracts.


Matthew Strelow

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