TFM Sunrise Update 11-3-2020


Corn futures rebounded 5-1/4 cents to get back above $4.00 and to the 20-day moving averages.  After a healthy downward correction from overbought levels heading into today’s U.S. election, the grain and oilseed complex is signaling an end to the lower consolidation, and possibly a base for the next up-move.  The dollar is also measuring its recent surge by reversing sharply lower overnight.  Stock index futures are up 400 points after rebounding sharply on Monday.  The U.S. corn harvest was 82% complete by Sunday, the USDA reported, ahead of the five-year average of 69% but just behind the average analyst estimate of 83%.   Midweek rains and very wet corn curbed activity in Ohio, but the favorable forecast for the next several days should make for a strong week of harvest. The Ohio producer expects to finish the subject corn field this week. Corn across Ohio was only 32% harvested a week ago, the slowest for the date since 2011 and well behind the recent average of 52%. That progress was also 2 points behind the same date in 2019, even after last year’s record-late corn planting efforts in the state.  Heading into today’s trade, Managed Money is net long an estimated 216,000 corn contracts.


Soybean futures rallied back overnight, gaining 13 cents to 10.64 in Nov and 10.67-1/2 in Jan.  Meal and oil were also up.  Managed Money is net long an estimated 205,000 soybeans; 78,000 lots of soymeal, and; 87,000 soyoil.  Meanwhile, the U.S. soybean crop was 87% harvested, ahead of the five-year average of 83% but lagging the average analyst estimate of 91%. The USDA pegged the September soybean crush at 171 mil bu versus trade estimates of 171 mil (175 mil last month, 165 mil a year ago); Soymeal stocks 312,000t versus 388,000t last month and 360,000t a year ago; Soyoil stocks 1.848 bil lbs (estimate was 1.826 bil) versus 1.941 bil last month and 1.776 bil a year ago. Weekly Ethanol Stats will be out tomorrow, Exports on Thursday.


Wheat futures gained as much as 8 cents in Chicago overnight, 9-3/4 in KC; And, 5-1/2 in Mpls amid a downturn in the dollar and an upturn in row crops.  The USDA’s weekly crop progress report on Monday rated 43% of the U.S. winter wheat crop in good to excellent condition, up from 41% a week earlier but below the average estimate of 45% in a Reuters analyst survey.  By state, ratings declined in Kansas, the top winter wheat producer, where 28% of the crop was rated good to excellent, down from 29% a week earlier. But ratings improved sharply in Oklahoma, with 34% of the crop in good to excellent condition, up from 11% a week ago.  Farmers were still planting the crop that will be harvested in mid-2021.  Winter wheat planting was 89% complete by Sunday, the government said, ahead of the five-year average of 86%, and 71% had emerged from the ground.


Cattle futures calls are steady to higher following more impressive price action on Monday, shaking off early session lows and finishing mostly higher. Cash trade undeveloped, but last week’s trade was light, leaving packers fairly short bought for the week.  Strong fundamentals help build the feedlot resolve for higher cash prices this week.  Choice Carcasses stayed firm into the close on Monday, up .55 to 208.65.  It was encouraging to see the midday levels hold.  Technically, the improved picture in both live and feeder contracts, possible forming a v-bottom in feeders.  Meanwhile, election results and a rise in COVD cases usher in uncertainty to the markets. 


Lean hog calls are called mixed.  Dec saw prices come off session lows, setting up a potential double bottom on daily charts.  The CME Lean Hog Index is sliding, losing another 1.00 to 74.49, but still holds a premium to Dec contract, and will provide support to Dec., but trend has turned lower.  Retail values had gains at midday, and closing prices held some of those gains, up .34 to 84.14.  Technicals have turned weak, leading to additional long liquidation; Deferred contracts are testing key support levels and are starting to look like a value, still holding those support levels in Monday’s trade. 


Matthew Strelow

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