TFM Sunrise Update 12-2-19


Corn futures were up a couple cents overnight on follow-through after closing on key down trend channel resistance last week, opening the door for an upside break. March corn hit a 2-week high of 3.83-1/4 before settling back to unchanged by 5 am this morning. Weekly Export Inspections will be out mid-morning followed by Weekly Crop Progress that is expected to show a portion of this year’s unharvested crop still out there where heavy snow in the northern tier of the U.S. corn belt has the standing crop unreachable. Between the late harvest and late planted crop, there remains a lot of uncertainty about final crop size, thus favorable basis levels are still a talking point for farmers and farm marketers.


Bean futures remained on the defensive after the holiday break on Friday, but were up 2 to 3 cents overnight to start the new month. Jan beans peaked at 8.83 and were as low as 8.77-1/2 which is inside Friday’s lower trading range. Momentum studies are all bearish for the entire bean complex that saw new contract lows posted in soymeal.  However, now that futures are in oversold territory, a technical bounce can be expected, particularly if this morning’s USDA Weekly Export Inspections lean favorable. U.S. Soybeans are flowing into China again as port congestion eases. While Beijing has agreed to waive a 30% retaliatory tariff on imports of U.S. beans, buyers still have to pay a deposit before seeking a refund from the government. There are as much as 2 million tons of soybeans from the U.S. as well as shipments from other countries. Outside markets show crude up sharply after a steep drop on Friday. The dollar is firm.


Wheat futures traded narrowly mixed overnight following a stellar week of trading last week that saw contracts push to new 4-1/2 month highs. Nearby Chicago winter wheat has blasted through all moving averages and is technically overbought, but within a nickel of Friday’s new high for the move at 5.46. March KC wheat, down 1-1/2 cents to 4.45-1/2, still has it’s 200-day moving average resistance up at 4.63-1/2 serving as a bullish target.


Cattle futures steady to firmer in lives, mixed in feeders. Live cattle futures ended the month of November in a defined up trend with no top in sight.  Feb cattle’s new contract high from Friday is at 127.15. Cash markets ended last week $2 to $4/cwt higher and topped in the north at $120. Trading in Texas and Kansas began at $118/cwt then developed into $119 late Wednesday. In the north live prices were $117 to $120 live with temperatures in the Plains seen moderating after Thanksgiving. 127.15


Hog futures are called steady to firmer after posting large outside trading ranges on Friday. Sellers were prevalent in Friday’s holiday-shortened session, but lost control when buyers stepped in and pushed prices higher. This could lead to some follow-through early today with Chinese purchases of U.S. pork helping the fundamental side of the equation.


Carol Tillmann

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