TFM Sunrise Update 10-20-21


Corn futures were firm overnight with Dec up 3 cents to 5.33-1/4 and the contract’s 50-day Moving Average.  Informa estimated U.S. 2022 corn acres at 92.3 mil vs 93.3 this past year as growers face the high cost of planting especially fertilizer, energy and labor.  Meanwhile, U.S. harvest is half over heading into more good weather forecasts.  Basis bids for corn shipped by barge to the U.S. Gulf Coast for export were weaker on Tuesday on rising grain supplies as the U.S. harvest accelerated past the halfway mark, traders said.  Bids were mixed at processors and river terminals around the U.S. Midwest on Tuesday morning.  The lower dollar yesterday helps support commodities in general.  Today, so far, the greenback is firming up and crude is seeing a pullback.  Today’s Weekly Ethanol Stats are expected to show production higher than last week at 1.042 mil barrels per day which would be the third consecutive week of increase in production.  Stockpiles are estimated to be 19.974 mil bbl vs 19.847 mil a week ago.


The soy complex higher this morning.  Nov beans are up 9 cents to 12.37 and are testing Tuesday’s one-week high of 12.39-1/4.  The contract managed to close higher for a fourth consecutive day Tuesday.  Soyoil is making a fresh 2-month high on gains of 1.00; And, bean meal is continuing to rebound from last week’s new lows.  Spot basis bids for soybeans rose at processors and elevators in the eastern U.S. Midwest on Tuesday, grain dealers said.  Chinese Jan bean were down 34 yuan overnight; Soymeal up 29; Soyoil up 48; Palm oil up 28; Corn up 7.  Malaysian palm oil prices overnight were up 122 ringgit (+2.47%) at 5066 extending its rise with concerns over supply shortages in No. 2 grower Malaysia and high petroleum prices.


Wheat futures are firm this morning with the Dec Chicago contract up 5-1/2 to 7.41-1/2 cents.  Yesterday’s higher action solidified a pattern of higher lows on the daily charts above near and long-term moving average support levels.  Rabobank, today estimates Chicago wheat futures will probably trade between $7.25 and $7.40 per bushel through the second quarter of 2022 on low global stockpiles, so this is market chatter for traders to consider.  Dwindling stocks of wheat, particularly in exporting nations, are on track to decline over the next nine months driven by high use of wheat in animal feed as a substitute for corn as well as downgraded wheat quality in the EU.  Overnight, Dec KC  followed suit after trading as much as 5-3/4 cents to 7.54 overnight.  Dec MPLS wheat gained 5-3/4 cents to match Friday’s new high at 9.80.  Spot basis bids for HRW wheat were steady to firm at truck market terminals in Kansas on Tuesday.  Pending international tenders include a United Nations agency tender to purchase about 200,000 tons of milling wheat on behalf of the Ethiopian government.


Cattle futures are called steady to lower.  The lack of follow through in the cattle market to start the week was disappointing, and the second consecutive weak close could signal cattle may be at the top of the range.  The overall near- term trend is firmer, but prices may be poised to check some recent support.  Futures finished lower for the second straight session as buying wanes at the top of the range.  December held around the $130 price level but failed to push higher after a strong start to the day.  The technical close was weak, and December cattle posted a bearish turn on the daily charts but will need some confirmation with additional selling pressure on Wednesday.  The cash market is still quiet to start the week, as bids are still undefined.  The majority of cash trade will likely hold off until the second half of the week.  Midday retail values were higher, but that failed to support the market overall.  Boxed beef values held gains and closed firmer with Choice carcasses gaining .79 to 280.88 and Select adding 1.72 to 261.53.  The load count was moderate at 147 loads.  Choice carcasses are trading near 2 ½ month lows but seem to be finding some footing at the $280.00 level.  The premium of the feeder futures to the cash index limits the front end of that market.  The Feeder Cash Index traded .20 higher to 154.10, and still holds a discount to the front-month Oct futures, but the gap has significantly narrowed.


Hogs are called steady to lower on follow-through from Tuesday’s triple-digit losses as the weak cash tone keeps pressure on the market.  December hogs have been in a tight trading range with 79.000 on the top and 77.250 on the bottom, consolidating over the past 5 days.  The consolidation stays just above the gap on the December charts with the top of that gap at 77.200.  Cash will still be a key to the hog market overall.  Direct trade on Tuesday closed softer with weakness in carcass based prices losing .27 and direct live prices dropping .53, which could pressure the market on the open.  The Lean Hog Index traded .71 lower to 86.88.  The premium of the index to Dec hogs should help support the front of the market, trading at 9.480 spread.  At midday, the retail pork carcass sector was firmer, but those gains evaporated going into the close, losing 1.44 to 99.34, breaking the $100.00 barrier, but the product movement was good at 430 loads.  At below the 100 level, pork carcasses are trading at their lowest levels since September or lower.


Matthew Strelow

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