TFM Sunrise Update 12-16-2021


Corn futures traded narrowly mixed overnight.  March corn is up 2 cents this morning to 5.87-3/4 while staying tightly woven into a sideways range beneath $6.00 since early November.  Trade estimates for this morning’s USDA Weekly Export Sales are 1.20 to 2.0 mil tons.  Outside markets are lending support with a pullback seen in the dollar, crude up more than $1.00/bbl and stock index futures 250 points higher.  The weakness in the wheat market weighed on corn during the day yesterday with some selling pressure in the spot contract tied to farmer selling corn before year end tax purposes.  South American weather is a mixed bag for the market, but warrants watching and weather price premium.  Favorable conditions in Brazil support developing to reproductive corn, though soils are drying out in the south.  Recent showers benefit developing to reproductive corn in Argentina, but dryness is concerning.


Soybean futures are higher this morning ahead of Weekly Export Sales data due out at 11:00 AM CT.  Jan beans are up 10 cents to 12.72-1/2. March meal futures are up $2.50/ton in a bounce off of yesterday’s volatile session that saw the front month rally to its highest level since early July only to reverse lower by the close. Trade estimates for meal sales are 100,000 to 200,000 tons.  Soyoil is also up .50 with export estimates zero to 25,000. Wednesday’s NOPA soy crush came in at 179.462 mil bu for Nov versus the trade estimate of 181.640 mil bu.  The demand for both products will continue to support the NOPA crush totals going forward and provide positive support of soybean prices.  Basis bids for soybeans shipped by barge to the U.S. Gulf Coast and loaded for export were mostly steady to firmer on Wednesday on solid demand for spot shipments.  Overnight, Chinese Ag futures (MAY 22) Soybeans up 55 yuan; Soymeal up 28; Soyoil up 46; Palm oil unchanged; Corn down 10;  Malaysian palm oil prices overnight were up 133 ringgit (+2.96%) at 4619.


Wheat futures are unchanged this morning. Trade estimates for this morning’s USDA Weekly Export Sales are 200,000 to 400,000 tons.  Wheat prices have been building a bearish technical pattern, and prices broke through to the downside on Wednesday while posting a 30 cent loss to a 2 month low in the March Chicago contract.  That contract is up With the light holiday trade, stop orders were triggered under the market as prices fell.  That contract is fractionally higher this morning at 7.56-1/4, as is March KC wheat at 7.85-3/4.  March Spring Wheat is up 1-3/4 cents to 10.11.  The markets are now viewed as approaching oversold territory amid uncertainty surrounding the impact of Russia’s export taxation policy and better weather for Australia.  In the U.S. Plains, volatile weather over the past 36 hours that has created strong, damaging winds as far north as Minnesota and Wisconsin will be talked about in today’s trading session.


Cattle futures are called steady to lower following Wednesday’s weak price action, leaving the market open to possible downside selling pressure. Prices pushed through the low established on the bullish reversal to start the week, but Feb cattle closed below that low, opening the market up for additional long liquidation.  Live cattle were pressured by broad base selling in the livestock sector, aided by weak demand tone and disappointing cash market.  The cash market has been light this week in the face of the Holiday week next week.  Light cash trade was established at $136, and Northern dress trade at $212.  Both were $2 lower than last week.  Retail values closed weakly yesterday afternoon, and at midday saw additional selling pressure.  On the close, Choice carcasses slipped .46 to 260.26 and select was 1.35 softer to 247.45.  The load count was moderate at 174 loads.  Feeder cattle saw strong selling pressure despite the weaker grain values.


Hogs are called mixed for this morning.  The hog market is looking choppy, but held price levels yesterday aided by the premium of the futures market to the cash market.  With December hogs moving off the board, the new premium of the February contract versus the cash index will keep pressure on the hog market in the near-term.  The cash index traded 0.08 lower to 72.10 and is still running at a discount to the Feb futures which is 7.225 over the index.  Cash hogs have been showing some positive activity.  National Direct midday trade was 0.30 higher versus Tuesday’s totals.  Hog prices are still very firm for this seasonal window.  After a strong midday trade on Monday, retail values have been trending lower.  At the close today, carcass values did pick up a bid.  Pork carcass gained 2.35 to 87.83 with a load count that was moderate at 260 loads.


Matthew Strelow

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