TFM Sunrise Update 10-13-20


Corn futures traded narrowly mixed within yesterday’s trading ranges overnight.  Dec is at 3.90 and tracking above the contract’s upward trending 10 and 20-day moving averages.  The U.S. corn harvest was 41% complete as of Sunday, the USDA said in a weekly crop progress report on Tuesday, ahead of the five-year average of 32% and the average estimate in a Reuters analyst poll of 39%.  Condition ratings declined for row crops, with 61% of the corn and 63% of the soybeans rated as good to excellent, each down 1 percentage point from a week earlier, the USDA said.  Analysts on average had expected no change.  Heading into today, Managed Money is net long an estimated 164,000 corn contracts.  In tender activity, Taiwan bought 65,000 tons of corn from Brazil; South Korea bought 60,000 tons from S. American.


Soybean futures were firm overnight amid a moderate upward correction from Monday’s sharp break lower.  Nov beans are back to trading around the 10.50 price area as the trade consolidates in the wake of the recent $2.00 rally over the past two months.  The U.S. soybean crop was 61% harvested, the USDA said, well ahead of the five-year average of 42% and slightly ahead of the average analyst estimate of 59%.  Condition ratings declined 1 percentage point to 63% good-to-excellent.  Analysts on average had expected no change.  Today is the last trading day for the October soymeal and soyoil contracts.  Managed Money is net long an estimated 236,000 soybeans; 78,000 lots of soymeal, and; 84,000 Soyoil.

The monthly NOPA report is scheduled for release at 11 a.m. CDT tomorrow.  U.S. soybean crushings likely dropped in September to the lowest monthly level in a year, while soyoil stocks fell to a 13-month low, according to analysts polled.  NOPA members, which handle about 95% of all soybeans crushed in the United States, likely crushed 160.795 million bushels of soybeans last month, according to the average of estimates from nine analysts.


Wheat futures traded 4 cents lower overnight in Chicago and KC, unchanged in Mpls.  December winter wheat contracts are struggling to stay rangebound while consolidating in the lower portion of their week-long trading ranges.  Managed Money is net long and estimated 29,000 contracts of SRW wheat. Prices remain supported by weather as dryness in the Black Sea region and for the central US Plains pose questions about the 2021  new crop production.  Meanwhile, the market is unable to attract new buying after USDA projected record world ending stocks for the 2020/21 season.  The dollar is also seeing a bit of a recovery after tracking lower since late September.  Planting of the 2021 winter wheat crop was 68% complete by Sunday, ahead of the five-year average of 61% and the average analyst estimate of 67%.

In tender activity, Algeria bought 510,000 tons of optional-origin wheat; Thailand seeks up to 70,000 tons of optional-origin feed wheat.


Cattle calls are mixed after mounting a bit of an upward reversal Tuesday from Monday’s selloff in both live and feeder contracts.  The modest turn-around may signal a short-term low for the market.  Cash optimism was the fuel for the technical turn on Tuesday and needs to be realized or the selling could continue.  Cash trade is overall undeveloped, but some very light $109 trade late Monday was noted with bids at $108 and asks at $111-112.  We’ll get the weekly Fed cattle exchange later this morning.   Meanwhile, the bears will argue weak retails as reason for price pressure over the top of the market.  Carcasses cut out values are trending lower with closing values on Tuesday showing Choice down 2.18 to 212.44, and select .26 lower to 200.08.


Lean hog futures are expected to see choppy trade to begin the day, underpinned by a strong cash market that continues to trend higher.  Today is the last trading day for the October hog contract that settled at 77.80 yesterday while lagging the CME lean hog index which was up .43 to 78.14.  Dec hogs are at 66.15.  The discount to cash, coupled with strong demand will likely work in favor for the nearby contract today.




Matthew Strelow

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