TFM Sunrise Update 11-19-20


Corn futures were down 5 to 6 cents overnight with many commodities and stock index futures under mid-week pressure and the dollar on the rebound.  The setback to 4.20-3/4 in the Dec contract is inside Wednesday’s trading range and above the contract’s 10 and 20-day moving average support.  This morning’s USDA Weekly Export Sales are estimated at 600,000 to 1.0 mil tons and demand remains key to the up-trend in row crops.  Overnight, South Korea’s Major Feedmill Group (MFG) purchased around 132,000 tons of corn, expected to be sourced either from the United States or South America.  USDA announced a 140 mt U.S. corn to unknown destinations yesterday which may have been China for delivery in the 2020/21 marketing year that began Sept. 1.  There is talk of them stockpiling crude and Ag goods.  Nearby China corn futures are near 10.18 and new highs with their currency is at 30 month highs.  Russia and Ukraine domestic corn prices are at new highs.


Soybean futures retreated as much as 14 cents overnight on some long liquidation ahead of this morning’s USDA Weekly Export Sales.  Trade estimates range between 600,000 to 1.20 mil tons.  Jan beans slumped to 11.61-3/4 last night after closing well off the new high of 11.89-3/4 hit in yesterday’s session. Talk of rains in Brazil overnight dampened some of the buying enthusiasm late in yesterday’s trade.  The weather report for Brazil shows scattered showers through today, mostly north.  Then mostly dry Friday-Saturday with isolated showers Sunday.  Temperatures near to below normal through Sunday.  Mato Grosso, MGDS and southern Goias  to see scattered showers north Today through Sunday. Temperatures near to below normal through Saturday, near to above normal Sunday.


Winter wheat futures were down 3 to 4 cents overnight, taking cues from row crops and a bounce in the greenback.  There isn’t much new bullish news for wheat, so daily price action tends to be linked very closely to what the corn and soybean markets are doing.  Some feel managed funds are short wheat futures against long corn and soybeans.  Covid is still raising concern about lower U.S./global demand for food as countries go to lockdowns as slower economies and wages reduce demand.  Talk of a 2021 vaccine would help demand return.  Trade estimates for this morning’s USDA Weekly Export Sales are 250,000 to 500,000 tons versus 300,000 last week.  Overnight, European traders said Taiwan Flour Millers’ Association issued an international tender to purchase 82,220 tons of grade 1 milling wheat to be sourced from the United States.  Jordan’s state grain buyer, the trade ministry, made no purchase in an international tender to buy 120,000 tons of milling wheat which closed on Wednesday.


Cattle futures calls are mixed.  Feedlots are asking $112, but light cash trade has developed in the south at $110, steady with last week despite strong retails lending hope for higher cash.  The trend in cash will be key for the end of the week.  Choice Carcass values stay in their uptrend closing 2.12 higher to 235.84, but Select lost .34 to 213.62; Choice gained off of midday strength on moderate demand at 142 loads.  The Choice/Select spread is at 22.22 and may be reflecting a more current feedlot situation.  Futures prices have fallen back to support levels, trading in a choppy range this week before the Cattle on Feed Report tomorrow afternoon.  Expectations are for: On Feed 101.8%, Placed 90.9%; and Marketed at 100.1% 


Lean hog calls are steady to weaker.  The front month is supported by the discount to Lean Hog Index, but lower cash bids and weak retail prices are adding selling pressure to deferred contracts.  The CME Lean Hog Index was down .35 to 69.73 and trending lower.  Heavy pork production and the large slaughter run limits upside potential.  Estimated slaughter for Wednesday was 494,000 head.  In addition to large kill numbers, last week, Iowa and S. Minnesota hog weights were 289.1 lbs. vs. 287.7 lbs. the previous week and 287.7 lbs. last year.  This, and lower retail values, which were down .92 to 77.68 will pressure futures today unless strong Weekly Export Sales are reported this morning.


Matthew Strelow

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