TFM Sunrise Update 10-1-21


Corn futures were mixed overnight. December corn is up 1-1/2 cents to 5.38-1/4, mid-range of yesterday’s 11-1/4 cent trading range, and in line with the contract’s 50 day moving average.  USDA estimated corn stocks at 1.236 billion bushels vs. 1.155 billion bushels expected and 1.919 bil last year. The agency did lower the 2020 corn crop slightly from 14.173 billion bushels to 14.111 bil.  Weekly U.S. corn exports only came in around 14 million bushels, which was a disappointment for the market.  Later today, the USDA is scheduled to release its August Fats and Oils report along with the Grain Crushings report on at 3pm.  Corn used in ethanol production is estimated to be up 2.7% year-over-year to 422 mil bu.


Soybeans are down 2 cents this morning at the bottom of Thursday’s lower trading range.  Nov beans, at 12.54, are poised to move through yesterday’s low of 12.49 and test the June 17 low of 12.40-1/4 on momentum from the aggressive selling in beans and meal after the release of today’s quarterly Grain Stocks report.  The USDA estimated US bean stocks at 256 million bushels vs. the market guess of 174 million bushels. This compares to 525 million bushels at this same time last year.  They also raised their estimate for the 2020 soybean crop number from 4.136 billion bushels to 4.216 bil.  Weekly exports came in fairly strong at 40 million bushels but total commitments are currently only at 892 million bushels vs. 1.396 bil last year.  Overnight, Malaysian palm oil prices overnight were down 98 ringgit (-2.13%) at 4497 retreating from a record high while soybean oil prices fell, after the USDA’s Quarterly Grain Stocks report showed stockpiles are bigger than expected.  The news was bearish and showed a dramatic slowdown in demand for the last few months.


Wheat futures were up again overnight in continuing the string of higher overnight trade this week.  Dec Chicago wheat is up 14 cents this morning to a one -month high of 7.39-1/2.  Dec KC is up 11-1/4 cents to to 7.42; And, Dec MPLS is up 9-3/4 cents to 9.22-1/4.  The USDA estimate for stocks came in below the average trade estimate as well as the 2021 final US wheat crop.  The Small Grains Report showed US all wheat production at 1.646 bil bu, which was below the average estimate of 1.682 bil and below the range of 1.648 and 1.720.  All Winter Wheat production was 1.277 bil, which was below the average estimate of 1.320 bil and below the low end of the range of expectations.  Weekly US export numbers came in at a fairly weak 10 million bushels with total commitments currently at 407 million bushels vs 514 million bushels last year.  Wheat areas throughout the globe continuing to see dry weather that could continue the trend of lower global wheat numbers and higher prices, particularly with the back drop of inflationary concerns.


Cattle futures are called steady to weaker.  Sell pressure prevails in the markets after live and feeder cattle finished with triple-digit losses, opening the door for further downside pressure.  Oct futures placed their lowest close since March 2nd.  The Dec live cattle contract also closed at its lowest levels since May, and broke through down side support.  The cattle market looks to be on a slippery slope, and the fundamentals are not helping support the price.  Cash trade lack much activity, with most trade posting at $124 level for live traded and dress trade in the North at $196, mostly steady with last week. Trade is mostly complete for the week, with the exception of some clean up trade to end the week.  Carcass values stayed on their downward trend after a difficult close on Wednesday afternoon. On the close, Choice carcasses lost an additional 2.35 to 294.98, and Select followed dropping 2.46 to 269.31.  The load count was light at 129 loads.  Weekly export sales were within expectations, but failed to push the market higher.  New weekly sales totaled 16,500 MT, up 2% from last week, with Japan and South Korea as the leading buyers.  Overall, charts look technically weak, and with the closes Thursday, additional downside selling pressure looks to be expected as the market is still looking for a bottom.


Hogs are called mixed to higher fueled by strong weekly exports sales and technical buying.  The technical picture stays strong as Dec hog futures gapped higher on the open yesterday and closed at its highest price point since July.  The market remains bull spread overall, with Oct at a premium to Dec, a push to the upside seems likely as Dec looks to challenge the $90 level.  Weekly export sales were strong last week with news sales at 42,500 MT, up 31% from last week.  Mexico and China were the top buyers of U.S. pork.  Seeing China in the market was encouraging, given how quiet they have been the past few weeks.  After a firm close on Wednesday, retail values stays supportive on Thursday afternoon.  At midday, pork carcasses were 3.25 higher, and held some of those gains at the close.  Carcasses finished 1.18 higher to 116.26.  The load count was moderate at 312 loads.  National Direct prices will be watched for support on the open today.  The Lean Hog Index gained 0.77 to 92.92.  The gap with the Oct futures has basically closed, with the cash index futures holding a 1.320 premium to the October contract.  The discount to futures in Dec is still at $7.520, which supports the market.



Matthew Strelow

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