TFM Sunrise Update 10-2-2020

CORN

Corn futures were down 3 to 4 cents overnight with a retreat in soybeans.  U.S. equity futures plunged by more than 1.6%, or 500 Dow points after President Trump confirmed through a tweet that he and the first lady tested positive for coronavirus.  The dollar is up this morning.  This, and an overbought grain complex following bullish Quarterly Grain Stocks data is causing the markets to pause.  Stonex (Formerly Intl FCSTONE) estimates the U.S. 2020 corn crop at 14.942 bil bu (previously 15.085 bil), yielding 179.0 bu per acre (previously 179.6).  The 6 to 10 day forecast for the Midwest has dry weather across all of the region through the period.  Temperatures will be warming up to above average in the west and average in the east.

SOYBEANS

Soybean futures traded 8 to 9 cents lower overnight, meal and soyoil are softer as well.  Soybean stocks came in 36 million bushels below expectations in Wednesday’s Quarterly Stocks report from the USDA.  This pushed prices to new highs for meal.  Soybean prices have been unable to make new highs for the move, though as farmer selling greets the rally.  Momentum studies are trending higher which support more price strength should resistance levels be taken out.  Stonex (Formerly Intl FCSTONE) estimates the U.S. 2020 bean crop at 4351 bil bu (previously 4.388 bil), yielding 52.4 bu per acre (previously 52.9).

WHEAT

Winter wheat futures were down 5 to 6 cents overnight, Mpls spring wheat down 2.  With the outlook for record world ending stocks, the price surge after the USDA report is fueling farmer selling.  Dec wheat futures settled back yesterday within an ‘inside’ traded session, indicating new buying interest is fading.  Talk of dryness concerns for the planting season in the Black Sea region, plus talk of some sales of French wheat to China is supporting European wheat futures.  No wheat tenders were reported overnight.

CATTLE

Cattle calls lower as a plethora of commodity markets take a step back on news of the President and first lady testing positive for Covid19.  Underlying support from cash and Weekly exports should buoy prices.  Talk of $107 to 108, and even $109/cwt began to surface on Thursday afternoon, which is $2 to $3 higher than last week.

HOGS

Lean hog futures are called steady to lower with other commodities.  Like cattle, hogs will see support underneath the market due to strong cash markets, exports and carcass values.  The cash index, at 76.54 is at its highest point since August 2019.

Author

Matthew Strelow

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