Happy Thanksgiving from all of us at Total Farm Marketing!
Thursday, November 26: The CME and Total Farm Marketing offices are closed.
Friday, November 27: The CME closes at noon, and Total Farm Marketing offices close at 1:00.
CORN
Corn futures were mixed overnight with Dec trading a 4 cent range between 4.27-1/2 and 4.23-1/2. Rumors of China adjusting purchasing commitments from the U.S. and South America has markets in limbo heading into the Thanksgiving holiday, but, though technically overbought, maintain a bullish tilt into the holiday. The dollar edged lower again overnight offering support to energy markets and corn near session lows. Some position-squaring by the funds, who maintain a large net-long position may contribute to choppy, two-sided trade today. Weekly Ethanol Stats will be out today, but Export Sales are pushed back to Friday morning. Weekly U.S. ethanol production is expected to be slightly higher than last week and stocks down slightly as margins have weakened. Light volume in Friday’s trade could lead to exaggerated price moves.
SOYBEANS
Soybean futures were mixed overnight with Jan trading within a 10 cent range between 11.98-1/2 and 11.88-1/4. Weather in South America and demand from China remain main market movers moving forward, and we have not seen any bean sales to China for quite a while. In fact, rumors that China crushers had cancelled 2 to 5 U.S. soybean cargoes or switched the cargoes to Brazil weighed on the market yesterday before a lack of confirmation offered support near session lows. Meal futures made new highs overnight. Rain over the next 5 days in Argentina and rains early next week across south Brazil also offer resistance.
WHEAT
Winter wheat futures were narrowly mixed overnight after pushing through yesterday’s breakout session highs fueled by an unexpected drop in Weekly Crop Ratings. Liquidation of December wheat open interest before first notice day on Monday is also supportive, along with the lower dollar and up-trend in row crops. Large 2020 world wheat supplies limits upside potential, however, weather will challenge that bearish fundamental factor at times. Subsoil moisture reserves continue to decline across KS, CO, NE and the Dakotas. The 30 and 90 day NOAA weather forecast calls for below normal rains and above normal temps for the southern third of the U.S. including the south Plains.
CATTLE
Cattle futures are called steady to higher as easing COVID concerns boost equity markets and retail prices. New highs were forged in stock index futures overnight on follow-through. Meanwhile, very light cash trade on Tuesday at $110/cwt remains steady with last week. This will be a limiting factor for a market that has been targeting higher cash with the strong retail carcass value. Estimated packer margins are $400+ at the retail levels vs cash market. Choice closed 2.70 higher to 244.30 and Select gained 2.23 to 219.71 while holding onto on to midday strength again on moderate demand at 161 loads. The Choice/Select spread is at 24.59. Feeder cattle look to take cues from live contracts while facing resistance from the ebb and flow of a firm corn market.
HOGS
Lean hog calls are mixed. We are seeing some follow through buying at times, but the market is mainly a consolidation trade as fundamentals create headwinds for buyers. The heavy pork production and large slaughter run limits upside potential. Estimate slaughter was at 497,000 head on Tuesday, keeping pressure on cash prices. The CME Lean Hog Index was lower, down .31 to 67.83 while holding a small premium over December futures at 65.30. Retail values closed down .19 to 77.58, again failing to hold midday gains and keeping the trend lower. The load count was at 413, a strong number spurred by some value buying at these carcass levels. Pork Cutout Index dropped 4.74 to 78.26, reflecting the trend lower in carcass values.
Author
Matthew Strelow