TFM Sunrise Update 10-22-20


Corn futures made were steady overnight after making new highs on Wednesday.  Talk of tight South America old crop corn supplies, lack of US and Argentina farmer selling, lower Ukraine supply and rumors of Chinese interest in US corn offer underlying support.  Weekly US corn export sales are estimated near 800,000 to 1.40 mil tons versus 655,000 last week.  There are reports that commercials were aggressive buyers of US corn barges yesterday. USDA estimates US exports near 59.0 versus 45.1 last year. Ukraine is 30.5 versus 29.2 last year. There is new talk that the Ukrainian corn crop could drop below 30.0 mt versus USDA guess of 36.5.  China imports are estimated near 7.0 mmt versus 7.0 last year, some see total China imports closer to 30.0 and US final corn exports near 64.8.  Managed Money is net long an estimated 231,000 corn contracts. Their record long was 504,000 contracts in August, 2010, according to one source.  The total Managed fund long for the grain and oilseed complex is near 725,000 contracts. Their record long was 779,000 on August 21, 2012.


Soybean futures traded two-sided overnight near the top end of the recent trading range, but meal eked out new highs pulling beans up 4-3/4 cents to 10.76-3/4.  The contract is targeting the high of 10.79-3/4 from Oct 9.  Trade volume has slowed, but soybean open interest is near a record high.  There were no new daily export announcements yesterday.  Trade estimates for this morning’s USDA Weekly Export Sales are Weekly US soybean exports sales are estimated near 1.50 to 2.50 mil tons versus 2.631 last week.   Managed funds are net long and estimated 252,000 soybeans, 93,000 soymeal and 81,000 soyoil.  The total Managed fund long for the grain and oilseed complex is near 725,000 contracts. Their record long was 779,000 on August 21, 2012.


Wheat futures were mixed overnight.  The dollar firmed after falling all week.  Chicago wheat was off 3-1/2 cents, KC steady and Mpls up 3.  Managed funds were late sellers of 2,000 SRW wheat yesterday, and are estimated to be net long 64,000.  Chicago wheat funds’ record long was 80,800 in August, 2012.  KC wheat funds’ record long was 92,200 in July, 2017. Their current long is near 30,000.  Mpls wheat funds’ record long was 25,500 in June, 2011. Their current long is near 1,700.   Dry US south plains HRW and Russia weather continues to provide lift for US futures, Matif and CME Black Sea wheat futures to new highs.  Some showers are forecasted for US plains early next week.  Weekly US wheat export sales are estimated near 200,000 to 800,000 tons versus 528,000 last week.  USDA estimates US exports near 26.5 versus 26.2 last year.  Russia’s export forecast is 39.0 versus 34.5 last year.  EU is 25.5 versus 34.4 last year.  Canada is 25.0 versus 24.6.  Australia is 19.0 versus 9.5.  As a weather market, the key will be US and Black Sea weather.


Cattle futures calls are mixed after consolidating on Wednesday while trying to form a low. Look for more choppy trade ahead of tomorrow’ USDA Cattle on Feed report.  Trade estimates are foe On Feed to come in at 103.2%; Placements 102.4%; And, Marketings at 105.8%.  Cash is seeing light volume around $106/cwt, down $2 to $3 from last week.  Nebraska some a few $104 bids and asking prices up at $108/cwt.  Carcasses cut out values are trending lower last 2 weeks and may be trying to find some stability around $210;  Choice finished lower on the day at 208.47 down 2.13. 


Lean hog calls are mixed with a weaker tone after Dec failed to hold the 70.00 barrier again which leads to profit-taking.  Today’s Weekly export sales may be key for setting a tone for today’s price action.  The strong discount to the cash index, which was up .35 to 78.62 keeps the market supported in front months, but Dec may be in the midst of some form of correction.  Carcasses closed higher on Wednesday to 98.16, up 1.25.  This should provide support under Dec today.  Meanwhile, Chinese hog prices seem to be stabilizing…a fundamental to watch into 2021.  Chinese pork production in the 3d quarter improved, up 18% over last year.  However supplies remain tight, overall.


Lisa Heder

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