TFM Sunrise Update 10-11-19


Corn futures are seeing a modest recovery this morning after plummeting yesterday in reaction to a USDA report that wasn’t as friendly as bullish traders were hoping for. Bottom line was the carryout number, and while that did decline from 2.190 bil bu to 1.929, the market was looking for 1.689. Dec futures slipped to near the 50-day moving average, as well as upward channel line support. We’ll look for this area to hold. Overnight the contract was up 4-1/2 cents to 3.84-3/4. Winter weather is a challenge for producers in the northwest while wet weather will slow harvest the remainder of this week for many in the Midwest.


Bean futures are higher this morning. Yesterday’s USDA report had a friendly tone dropping both U.S. and projected world carryout. U.S. carryout dropped to 460 mil from 640 mil last month and was below the pre-report estimate of 497 mil. World projected carryout for soybeans dropped from 99.2 mmt to 95.2 mmt and stocks to usage from 28.1% to 27%. A lack of harvest pressure the next few days is viewed as supportive. Nov beans peaked at a new high of  9.34-1/2 overnight on gains of 11 cents and are up 18 cents on the week and 13-1/2 cents from the summer high set on June 18.


Wheat futures found some footing overnight, gaining 2 to 4 cents in a last gasp for the week to maintain an uptrend. Both the U.S. and projected world carryout stocks figures for wheat climbed, albeit small. Nonetheless, the report was viewed as slightly negative and there is a lack of fresh news that’s friendly for wheat, so we’ll look for prices to consolidate inside yesterday’s rather wide trading ranges.


Cattle futures are called mixed. Good demand continues to underpin prices and weather is viewed as supportive. Feedlots remain sloppy and with temperatures on the cold side weight gain could be affected. As each week passes, we near the re-opening of the Tyson plant. The early week cattle at $109/cwt in the north were replaced mid-week with sales in Iowa at $110, but now most are priced in the north at $112. So, cash has been active and buoyant this week.


Hog futures are called mixed. Prices remain choppy, but the long term picture, we believe has a friendly tone as smaller inventory in the months ahead and expectations for continued strong demand will provide underlying support. A steady production pace coupled with a jump in pork exports to China spell more volatility for this futures market.


Kelly Rubisch

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