TFM Sunrise Update 10-2-19


Corn futures retreated overnight after posting new highs for the move on Tuesday. Dec corn is down 3 to 3.89-1/2 after a couple of strong ‘up’ days as farmers lock in this week’s price strength. There is more room for prices to improve after USDA shed 300 mil bu from ending stocks which could make for and adjustment to a sub 2 bil bu carryout. Traders barely closed the gap at 3.96-3/4 yesterday which was viewed as an upside target. Meanwhile, news wires report, “heavy rains and flooded fields is unfavorable for maturing crops and harvesting over west and north-central Midwest areas. A recent spell of very warm, dry weather in the south-central and east-central areas has been more favorable. A gradual shift towards less rain during the next 5 days may lead to mostly dry weather during the 6-10 day period. Conditions in the wettest areas will be slow to improve. Frost threats during the 5 day period are in central Nebraska, northern Minnesota, northern Wisconsin and northern Michigan. A slight chance for frost in eastern South Dakota and southwest Minnesota. No significant risk of frost elsewhere in the region.”


Soybean futures were lower overnight with Nov beans down 5 cents to 9.14-1/2. The trade pushed prices above the contract’s 200-day moving average this week for the first time since mid-July, but since rallying more than 30 cents so far this week, prices are likely to consolidate around that moving average mid-week, underpinned by good demand and harvest delays, at least until the trade gets a look at tomorrow’s USDA Weekly Export Sales.


Wheat futures were down overnight, too, easing 5 to 6 cents in Chi after rising to their highest level in months. KC is down 3 to 4, and Mpls is steady to 2 higher after making a downward correction. Tightening SRW wheat supplies are providing underlying support, yet a surging U.S. dollar could be a hindrance to upward price potential.


Cattle futures are called mixed. Prices finished steady to 50 cents lower yesterday on futures. Firmer choice cuts yesterday and a spread of near 27.00 between choice and select cuts would suggest feedlots are current. Meanwhile, the trade is watching the mainstream media feature major articles this week arguing the health benefits of consumers eating red meat.


Hog futures are expected to remain volatile and choppy. We remain supportive the long term picture and believe that futures have it right with a big premium priced into the market for next summer months. Good demand will help offset record slaughter numbers.


Lisa Heder

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