TFM Sunrise Update 10-21-19


Corn futures were mixed overnight, trading both sides of Friday’s settlements. Concerns regarding demand, as well as ongoing corn harvest look to keep prices choppy and pressured in the short term. Bullish news is still necessary to push this market higher, and the overall news front has become more quiet recently as the market is still digesting early yield results vs prospects of further reductions on the overall production. We’ll Weekly Export Inspections this morning followed by an update on harvest progress after the market closes this afternoon. For the week ending October 10, U.S. corn sales are running 51% behind a year ago, shipments 64% behind with the USDA forecasting an 8% decline. Funds were net sellers in corn on Friday to the tune of an estimated 15,000 corn contracts putting them at around 73,000 sold contracts.


Bean futures were up 4 cents overnight and remain supported by the idea of tighter supplies, as well as improved demand. However, we expect prices to stay in consolidation mode as was the case in last week’s trade. For the week ending October 10, U.S. corn sales are running 13% behind a year ago, shipments unchanged with the USDA forecasting a 2% increase. Funds are net long an estimated 58,000 bean contracts, 43,000 lots of soyoil and net short 24,000 soymeal.


Wheat futures firm overnight featuring new highs for the move in winter wheat contracts as h higher trend in global prices as well as a weakening U.S. dollar spurs short covering into the wheat market. Managed money is now estimated net long 5,000 SRW wheat contracts. However, prices are moving into overbought territory and with global supplies still relatively full, we expect some caution throughout the week.


Cattle futures are called mixed to lower as the market adjusts to the explosion that occurred at the Cargill Dodge City plant last Thursday. Today’s trade will show us how the market spins the closure and what’s in store for cash cattle activity. Despite seeing some retail strength in the select carcasses, disappointment in cash sales where weekly sales were steady to 1.00 lower has brought some long liquidation into an overbought cattle market. Overall, the long-term trend stays friendly, given strength in the global protein prices, but in the short term, the cattle market may be due for some more correction.


Hog futures are called mixed. Front month Dec hogs have stayed in a long term sideways choppy fashion, but still extremely volatile. Export sales were strong last week, showing product movement of U.S. pork, but with large slaughter numbers on a weekly level, as well as a disappointing trend in retail values at the end of the week may make it difficult for the Dec contract to get traction. Improved demand prospects keep support in the deferred contracts.


Carol Tillmann

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