TFM Sunrise Update 12-30-19


TUESDAY, DECEMBER 31: The CME has regular trading hours. Total Farm Marketing offices will close at 3:00 CT; there will be no Top Farmer Intelligence report.
WEDNESDAY, JANUARY 1: The CME and Total Farm Marketing offices will be closed.


Corn futures were narrowly mixed overnight within Friday’s firmer trading ranges when a strong close on the charts had prices settle above the 100-day moving average for the first time since early August. This could bring additional short-covering into the corn market as speculative funds are still holding a relatively large short position. Weekly export sales were disappointing last week. However, ideas that a Phase 1 deal with China next week will provide an uptick in movement of corn and DDGs is providing underlying support. Resistance over the market is in the form of welcomed rain in Argentina’s weather forecast where dry conditions have been extensive. Weekly Export Inspections will be out this morning and the market is facing another holiday trading schedule like last week.


Soybean futures regained Friday’s daily key reversal overnight, trading 6 cents higher and keeping the positive weekly technical picture in tact. Prices are likely moving to a choppy, sideways trading range given the strength of the rally since December 1. Demand has stayed supportive for U.S. beans, and any additional news on the Phase One deal will likely keep things from setting back. Soy oil made a new contract high overnight  and the dollar is making a fresh two-week low this morning which add up to additional supportive factors for the complex.


Wheat futures are making new highs this morning amid a weaker dollar and technical follow-through. Front-month contracts are pushing key resistance levels established last summer Mar CBOT wheat is up a nickel, KC up 3. With prices looking to breakthrough last June’s highs, additional technical buying and short-covering into should help keep the market trending higher. Demand has stayed strong with weekly export sales at the top end of expectations, and a strong enough pace to meet, if not exceed USDA export expectations.


Cattle futures are called steady to firmer. Retail values look to finish firmer week over week, and cash trade continues its strength while trending higher over last week’s totals. On Friday, live trade in the north was $122-124/cwt, $2 higher. Live sales in the south were mainly at $122, also $2 higher. Prices from mid September to now have moved from $100 to $122. The futures market posted strong weekly closes, which could leave the door for additional money flow especially backed by firmer retail values.


Hog futures are called mixed. While export demand numbers stayed supportive, the combination of large supplies of slaughter animals into the first part of 2020, as well as the premium of the market over index and cash values make it difficult for rallies to be sustained. Look for futures to stay in a choppy, sideways fashion and overall consolidative in nature.


Carol Tillmann

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