TFM Sunrise Update 11-5-19


Corn futures were unchanged overnight with Dec sitting at the contract’s 40-day moving average situated at 3.83. A weak close in Monday’s trade and confirmation of this year’s corn crop at 52% harvested leaves ample room for hedge pressure in the market. Long-range weather forecasts staying dry, but cold across the upper Plains will likely allow progress to continue. The 5-year average for this time of the year is 75% harvested. Good to excellent corn ratings came in at 58% (same as last week).  This Friday, the USDA will release updated production figures as well as the latest supply and demand estimates.  In the last few days, two of the major private estimates came out with corn yields above last months USDA yield estimate.  This has put some pressure on the market as many have expected the USDA will lower their estimate this month.  That, however, would be unusual given the USDA’s historical track record.  Going back to 1980, in years where the USDA has increased their yield estimate from September to October, they increased yield again in November roughly 83% of the time.


Soybean futures were two-sided overnight within 4 to 5 cent trading ranges. While demand brings a positive bias on improved U.S./Chinese trade relations, the bean crop is now at 75% harvested, and moving into that final 25%. Charts look technically improved after last week’s close, and prices may have some room to work higher. However, forecasts for more favorable weather in South American is likely keeping a bit of a lid on the market for now. Looking ahead to Friday’s USDA report, two of the major private estimates on yield came in just above the USDA’s estimate from October. The USDA lowered yield last month, and historically when they have reduced yield in October, they reduced the yield figure again in November 62% of the time.


Wheat futures firmed overnight, trading up 2-1/2 cents while respecting Monday’s rather narrow trading ranges. In early crop ratings of this year’s winter wheat crop, USDA pegged the crop at 57% good to excellent, and a planting pace now ahead of the 5-year average at 89%, will lend some overhead resistance to the market. Egypt announced a late-afternoon tender yesterday for wheat for the December delivery which could provide support.


Cattle futures are called mixed to firmer as live cattle contracts forge fresh multi-month highs. Although the cattle market is in overbought territory, strong retail values and yesterday’s modest gains in mid-day carcasses will keep buying support underneath the cattle market with the anticipation cash trade can trend higher. We’re likely to see the market begin to waver after such a strong run and, typically price moves can become quite volatile as the market seeks a top. Look for two-sided trade to develop.


Hog futures are called steady. Hog futures are still faced with heavy slaughter numbers and weights, but a strong surge in yesterday afternoon carcass values could renew some buying support into the hog markets. However, cash hogs are called lower today and this may slow that buying interest in futures, initially.


Carol Tillmann

Sign up to get daily TFM Market Updates straight to your email!

back to TFM Market Updates