TFM Sunrise Update 10-23-19


Corn futures are called mixed to lower on a lack of new positive news on somewhat tired looking chart. Dec corn traded a 2 cent range overnight after breaking through trend-line support at 3.88-1/4 and settling just below that level. Harvest will pick up steam in the days ahead, and though yield results continue to vary, this will lend near-term pressure to the market.  We will get Weekly Ethanol Stats during the day today, Exports tomorrow.


Bean futures traded two-sided overnight within the lower half of Tuesday’s 14 cent trading range that saw prices slide from their highs early in the day and finish with only small gains. Continued talk of sales to China circulate but without evidence or details. News that Chinese crushers were granted tariff-free quotas to purchase U.S. beans seems to have vanished, leaving the market vulnerable to weakness. It looks like a harvest window will open up here over the next several days and this could pressure prices.


Wheat futures were steady overnight and are called steady to lower on a lack of new positive news and bottoming signals in the dollar. Prices finished softer the last two sessions and without new news soon prices are vulnerable to a technical break as recent support from talk that wheat would be included in tariff-free trade with China was tempered by a stipulation purchases would be on a competitive and demand basis. Meanwhile, a drawdown on Australian wheat is supportive yet the world has ample inventory to absorb supply decreases elsewhere.


Cattle futures are called mixed. Prices have had a good run but look somewhat tired as was evident with yesterday’s less-than-stellar finish. Cutout values firmed however, and this could provide underlying support. The cattle market is technically overbought but there is little reason for sellers to step in in a big way an push prices lower.


Hog futures are continuing to show mixed signals and consequently will call the market as such today. Look for mixed opening with a likely increase in hedge pressure in the summer months which have traded it to respectable levels and large enough premium to the front months to warrant sales. Dec traded a bearish outside session on Tuesday and July hit its highest point since Aug. The day’s downward reversal may reflect an attitude that the futures market will struggle to sustain a rally amid a string of record weekly production totals.


Carol Tillmann

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