TFM Sunrise Update 11-4-2021


Corn futures were again narrowly mixed overnight with a firm tone heading into this morning’s USDA Weekly Export Sales data.  Dec corn is up 2 this morning to 5.66.  Trade estimates range from 700,000 to 1.40 mil tons vs 890,000 last week.  Informa estimated U.S. corn yield near 178.7 which adds 185 mil bu to the crop and carryout if USDA does not raise demand.  Demand could be raised 200-300 mil bu, though.  Informa also raised the World 2021/22 corn crop 9 mmt, (4.7 US, 3 Ukraine and 1.5 Argentina).  The trade estimates World corn ending stocks are near 301 mmt vs 302 in October.  Weekly U.S. ethanol production was up 1% from last week and up 15% from last year.  Stocks were up 1% from last week and up 2% from last year.  Margins remain positive.  Cash basis to processors remain firm.  Farmer sales of corn and soy were slow on Wednesday as futures fell.  Sales were active on Monday when futures rallied, but have been limited since then.  Midwest weather is dry which should advance harvest.  Days 8-10 brings rain back to the east Midwest.  Outside markets are 40 points higher in the dollar and 1.20 in crude this morning.


Soybean futures were weaker overnight in quiet trade.  Jan beans are down 2-3/4 cents to 12.41-3/4.  Meal and oil contracts are also weaker.  Basis bids for soybeans shipped by barge to the U.S. Gulf Coast fell on Wednesday.  Chinese Ag futures overnight had Soybeans up 68 yuan; Soymeal down 6; Soyoil down 50; Palm oil down 50; Corn up 15;  Malaysian palm oil prices overnight were up 101 ringgit (+2.03%) at 5071.  Trade estimates for this morning’s USDA Weekly Export Sales are 1.0 to 20 mil tons vs 1.183 mil tons last week leaving the commitments behind pace to reach USDA’s goal.  Informa estimated U.S. soybean yield unchanged at 51.5 BPA.  Higher harvested acreage would add only 6 mil bu to the crop.  The trade is still concerned that USDA could drop exports 50-70 mil bu.  This could increase U.S. 2021/22 soybean carryout closer to 400 mil bu.  Brazil’s soybean plantings are 52% complete, up 20% from last week and 42% over last year.  Informa estimated Brazil’s crop at 145 mmt vs 137 last year.  Argentina’s crop is estimated at 51 mmt vs 46 last year.


Wheat futures traded higher overnight after a brief rally correction.  U.S. farmers are encouraged to increase 2021, 2022 and 2023 cash sales at current prices.  Dec Chicago wheat is up a nickel to 7.86.  The March contract is also up 5 cents to 7.97-3/4.  Dec KC wheat is up 3 to 7.93-3/4, and March is up 3-1/2 to 7.97-1/2.  Dec and March MPLS wheat contracts are up 6 cents to 10.50 and 10.33, respectively.  Trade estimates for Weekly Export Sales range from 180,000 to 500,000 tons.  Trade estimates for U.S. 2021/22 wheat carryout is near 581 mil bu vs USDA 580.  The trade also estimates Global wheat end stocks near 276.5 mmt vs USDA 277.2.  Informa estimates Canada’s 2022 wheat crop near 31 mmt vs 21 this year (U.S. 56 vs 44, EU 139 vs 136 and FSU 138 vs 134).   Look for more choppy trade as price discovery to the upside continues to run into resistance from an overbought condition on the charts.


Cattle futures are called steady to higher.  The market saw strong buying support across the complex led by buying in the feeder complex and a jump in cash market prices mid-week.  February live cattle are challenging overhead resistance at $137.  The chart is looking at a potential double top, or a push higher.  Cash trade got on track Wednesday, with most southern trade at $128, and Northern trade at $128-130.  Both areas are trading $2-3 higher than last week.  Retail carcass values are trading near monthly highs, and Midday retail values were higher while holding those gains into the close as Choice carcasses gained 1.11 to 288.49 and Select added 1.15 to 267.28.  The load count was light at 140 loads.  Feeder cattle gained, fueled by weakness in the corn and wheat market on Wednesday, and supported by the friendly tone in live cattle and retail demand.  The move higher improved the technical picture on the charts.  The strong fundamentals support, too, but both live and feeder prices are challenging some key resistance points.


Hogs are called steady to higher after rebounding with some spill over support from the cattle market.  Hog charts traded within yesterday’s range, which could be considered an inside day, but the close near the top of the range may bring some buying support today, particularly with Weekly Export Sales data.  Overall cash markets remain soft, but the recent weakness may be slowing.  In National Direct hog trade yesterday afternoon, on a national basis compared to the previous day’s weighted average, hog values were firmer, gaining .33 but the overall tone stays weak.  A strong bid in retail pork values at midday helped support hog prices.  Pork carcasses were 8.55 higher, and the market held those gains closing 6.23 higher to 100.44 getting back above the $100 level.  Movement was light at 312 loads.  The hog market is trying to build a bottom, and is open to volatile price swings.


Matthew Strelow

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