TFM Sunrise Update 10-28-2021


Corn futures were mixed with a weaker bias overnight.  Dec corn is down a penny this morning to 5.56-1/4.  Trade estimates for this morning’s USDA Weekly Export Sales are  800,000 to 1.30 mil tons.  According to the U.S. Department of Energy’s weekly petroleum report yesterday, U.S. ethanol stocks fell 0.8% to 19.925 mil bbl.  Analysts were expecting 20.341 mil bbl.  Plant production at 1.106 mil barrels per day, compared to a survey average of 1.097 mil.  This morning’s outside markets are viewed as bearish for corn this morning as crude sheds more than $2.00 per barrel to a 2-week low, and the dollar consolidates at a lofty level.  Harvest-wise: a wide vertical swath of moisture on this week slows U.S. progress.  Spot basis bids for corn strengthened at river terminals across the U.S. Midwest on Wednesday, grain dealers said.


The soy complex is mixed this morning with Nov beans up 3-3/4 cents to 12.43, Meal unchanged; And, soyoil down 27 cents.  Chinese Ag futures had Jan beans down 7 yuan ; Soymeal up 8; Soyoil down 176; Palm oil down 192; Corn down 21.  Malaysian palm oil prices overnight were down 33 ringgit (-0.66%) at 4933 on lingering concerns that high prices will prompt buyers to shun the tropical oil in favor of rival vegetable oils.  Trade estimates for this morning’s USDA Weekly Export Sales are 1.25 to 2.0 mil tons for beans, 150,000 to 375,000 for meal; And, zero to 20,000 for soyoil.  Basis bids for soybeans shipped by barge to the U.S. Gulf Coast fell on Wednesday in quiet trade, but harvest delays due to rain continued to limit the movement of grain into Midwest river elevators that feed the Gulf.


Winter wheat futures were off slightly overnight with Dec contracts 1 to 3 lower while consolidating inside Tuesday’s ranges.  The nearby Chicago contract is at 7.57-3/4 and KC wheat is trading at 7.80.  Dec MPLS wheat is firm this morning, up 2 to 10.24. Trade estimates for this morning’s USDA Weekly Export Sales are 200,000 to 550,000 tons.  Egypt’s General Authority for Supply Commodities (GASC) said it bought 360,000 tons of wheat in an international tender yesterday, the most this season.  The purchase included 180,000 tons of Russian, 120,000 tons of Ukrainian and 60,000 of Romanian origin wheat, GASC said. The wheat was sought for shipment between Dec. 1-10.  Jordan’s state grain buyer made no purchase in an international tender for 120,000 tons of wheat which closed on Wednesday.


Cattle futures are called steady to higher higher supported by a step higher in the cash market, and technical buying.  The technical picture was improved with the strength on Tuesday, as Dec closed above the 100-Day moving average.  The October Live cattle expires tomorrow, and unwinding of short positions going into expiration is noted.  Light to moderate cash trade is being reported in most areas mid-week with Northern dressed trade at mostly $200, $4 higher than last week’s weighted average.  Southern live trade was marked at mostly $126, $1 to $2 higher than Tuesday’s business.  Bids stayed firm into the afternoon, but most business is probably done for the week.  Beef cutouts may have been a limiting factor, as demand stays still a concern.  Closing retail values were softer as Choice carcasses lost 1.13 to 283.63 and Select dropped 0.85 to 261.69 The load count was light/moderate at 162 loads.  Feeder cattle saw selling pressure across the market fueled by strength in the corn market.  Oct feeder cattle expire today and are tied to the Feeder Cash Index at 156.03.  Charts have turned more friendly after Tuesday’s strong price action, and the cash market ticked higher adding to buying support.  A strong grain close and weak feeder market will be closely watched near-term.


Hogs are called steady to lower following more active selling on Wednesday amid technical selling and the ongoing weakness in the cash market.  Dec hogs broke lower on Tuesday and that pressure stayed in the market again yesterday as the Dec contract posted its lowest close since February 19th.  The overall cash market remains soft, and the Cash Hog Index reflects that, trading 0.32 lower to 82.66.  The discount of the index to futures is still supportive closing at 10.685 on Wednesday, but the overall market selling pressure weighs heavy.  The pork carcass cutout Index traded softer, down 2.36 to 96.31, reflecting the tone in the retail pork values.  The retail pork carcass prices gained a ground at midday, trading 3.36 higher, but again, failed to hold the gains into the close, losing .85 to 93.47 on movement of 356 loads.  Weekly export sales this morning could be key to overall price direction going into the end of the week.  This is a window of year-end increasing hog supplies, but the slaughter pace may have a difficult time handling the numbers.  Estimated hog slaughter was 480,000 for Wednesday, up 2,000 from last week, and on  the week, slaughter is running approximately 10,000 head over last week.  The hog market is on a slippery slope, and the technical and fundamental pictures both point lower in search of a bottom.


Matthew Strelow

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