TFM Sunrise Update 11-12-2020


Corn futures traded two-sided overnight with follow-through weakness noted after closing well off Wednesday’s new highs.  Dec corn is at 4.17-1/4 and looks to have put a near-term top in for the week at 4.28 that put the market in an overbought technical condition.  The trend is clearly higher, though, and 4.50 is not out of the question based on the latest USDA data.  REGISTER HERE to join a FREE 30 minute NOON (central) webinar today from Total Farm Marketing for more on what USDA’s Stocks-to-Use ratios translate to for row crop price potential.  Weekly Ethanol Stats, normally released on Wednesday has been delayed until later this morning.  Weekly Export Sales are delayed until Friday.  Overnight tender activity included S. Korea buying 64,000 tons of optional-origin corn, and Syria seeks 500,000 tons of optional-origin corn, 50,000 tons of soymeal.


Soybean futures stabilized overnight after trading sharply higher mid-week when USDA dropped soybean ending stocks more than expected.  Jan beans are up a penny to 10.53-1/2.  The November bean contract expires tomorrow and is trading around 10.40 this morning, down 2-1/2 cents.  Funds have continued to pile on long positions and are now net long an estimated 289,000 contracts of soybeans. Talk that China was asking for U.S. Jan-Feb soybean prices was supportive.  The lower-than-expected U.S. carryout combined with possibly higher-than-expected U.S. soybean exports that could mean an even lower carryout may force prices higher to slow demand.


Wheat futures eased 2 to 3 cents overnight with row crops stalling from their rally.  Profit-taking is helping weigh on the complex, too since Russia’s grain export quota is seen at 15 mmt for Feb 15 to June 30 next year.  This was higher than expected and suggested to the market that Russia could export USDA’s projected 39.5 mmt.  The world’s largest wheat exporter has used quotas as a tool to defend its domestic market having limited grain exports to 7 mmt from last April to the end of June.  Last year, Russia’s total wheat exports were 34.4.  The 6 to 10 day forecast has dry weather dominating the Plains and Midwest.  Temperatures go back up to above average for most of next week.  In tender activity, Pakistan seeks 400,000 tons of optional-origin wheat.


Cattle futures calls are steady to higher after seeing prices consolidate on live cattle charts at the high-end close yesterday.  This gives the market a little technical optimism with cash market asking prices up around $112 showing good value.  Yesterday’s Fed Cattle exchange saw trade at $110 +$3 over last week, but those were Passed Over by producers.  Trade will likely develop toward the end of the week.  Choice Carcasses have been on a strong rebound with seasonal demand.  Choice is up$10 since early last week on decent movement, improving by .59 on the close to 222.84.  Feeder cattle are consolidating as well underpinned by a less-than-stellar close in the corn market.


Lean hog calls are mixed as the market may be trying to etch out a bottom based on selling interest evaporating in Wednesday’s trade. Retail values closed .16 higher to 83.14 firmer from midday, but still $2.00 off the tart of the week.  The CME Lean Hog Index was firm, up .12 to 71.25, maybe starting to turn and hold a premium over December futures which settled at 64.80.  Export sales could provide some direction, but are delayed until tomorrow.  The export market was stronger last week, and with carcass values softer, demand should improve.  We/’ll watch to see if Chinese demand will start moving out into 2021.


Matthew Strelow

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