TFM Sunrise Update 11-11-19


Corn futures were down 3-1/2 cents overnight. Friday’s close did post a reversal on corn charts as front-month contracts tested and held the 62% retracement level before turning higher after Friday’s USDA crop production numbers. The cut in yield, as well as overall production, stayed supportive, but the supply pile is still overly large at this stage and demand concerns remain in place in the market. Look for more choppy price action on this Veteran’s Day. The Dec low from Friday at  3.72-1/2 is a bearish target for this week. Weekly Export Inspections and Harvest Progress is on tap for today.


Soybean futures were lower overnight, anywhere from 4 to 5-3/4 cents led by the nearby November contract which dipped to 9.13-3/4. The raise in carryout due to unchanged production numbers in Friday’s USDA data may lead to some skepticism for the market, and traders may look to price in potential adjustments down the road. At the forefront, the markets will stay focused on U.S./Chinese trade relations and continuing demand which has been building on the export front. The November contract’s 200-day moving average at 9.08 is leaning lower and serves as a bearish price objective.


Wheat futures continued to sag overnight, losing 2 to 3 cents. Friday’s global supply numbers still show ample supplies of wheat, keeping U.S. competitiveness difficult on that global scale. This will likely maintain a bit of pressure over the top of the market’s limited rallies with the market moving into a sideways to lower fashion, aided in part to an upward move in the greenback last week.


Cattle futures are called steady to higher. Cash trade stayed relatively firm to higher on a week over week basis on Friday’s trade, which keeps support in place in the live cattle markets. All contracts were posted a positive week for both cash cattle and futures. The Goldman roll or the sale of the spot month, and purchase of the next month out, has been a feature of cattle futures by the index funds. Strength in retail demand also warrants underlying support, though the cattle market is still overbought, but still working to the upside in the short term.


Hog futures are called mixed. A strong move in retail prices during this week has helped provide support into the hog market, but strong production numbers, heavy weights, and struggles in the cash market have moved the market into a sideways consolidative fashion. This will likely be the norm in the short term unless we see some strength in the cash market or continued strength in the retail or export trade.


Carol Tillmann

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