TFM Sunrise Update 11-20-19


Corn futures were down 1 to 2 cents overnight as the market respects the down-trending cycle it is in. The major trend in crude has turned lower and this sometimes influences corn prices as it relates to the ethanol energy market where corn is the primary product used in its production. Corn prices got a mild boost yesterday from a 191,000 ton sale of corn to an unknown destination pushing this week’s sales announcement total to 300,000 tons. A lack of strong farmers’ selling and continued delays to harvest due to wet conditions, as well as slow drying, will help provide support. However the 10-day moving average is acting as a significant source of near-term technical resistance for contracts. The U.S. Midwest weather forecast doesn’t have much change as widespread precipitation is seen for the region midweek; turning quiet by Friday into early next week; then rains to return the middle of next week. The 6 to 10 day temp outlook is a bit below average for the region. The South American weather forecast for Brazil in the 6 to 10 day outlook is still for rainfall to be seen across most areas. Argentina has rains for most areas early next week before quieting down the rest of next week. Temps continue to run near average in most of South America over the next 10 days. Weekly Ethanol Stats will be out today, Exports tomorrow.


Bean futures are were up 3 cents overnight on follow through from yesterday’s steady to higher close. Export activity continues to run ahead of schedule and this should be viewed as supportive. However, trade rhetoric with China has turned rather negative as the two sides once again dig their heels in by requiring each other to commit to some form of action. Meanwhile, with palm oil prices nearing a 2-year high and news that Congress is considering a 5-year extension on the bio-diesel tax break, soyoil futures are doing their part to support the complex.


Wheat futures eased overnight with winter wheat contracts slipping 3 cents. Continued concerns with exportable wheat out of Australia and perhaps Argentina, sales of U.S. wheat to China; and poorer than expected U.S. wheat crop readings has boosted the market so far this week. We’ll need to see continued buying enthusiasm to continue to drive prices higher. Overnight, the market might be reacting to stagnating U.S./China trade talks and upturn in the dollar that could affect exports. Spring wheat, meanwhile, is firm this morning.


Cattle futures are called steady to higher on ideas that cash could firm yet this week and that futures prices are holding. We remain cautious as the market sits in extremely overbought territory. The fact that the Feb cattle contract has closed the last four sessions within a 17 cent range, and the nearby Dec contract within 30 cents suggests more upside is possible. The Fed on-line Cattle Auction will get underway at 10:00 AM CT and give us a glimpse of packer interest out there.


Hog futures are called mixed. Prices slid yesterday, but after a down hard day finished more toward the upper end of their range which would suggest that near term selling interest has probably come to a halt. That said, the slow pace of U.S./China trade talks points to a slowdown in pork exports to China, which may lead to overhead fundamental pressure subduing any kind of quick price recovery.


Kelly Rubisch

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