TFM Sunrise Update 12-30-2021


FRIDAY, DECEMBER 31: The CME has regular trading hours. Total Farm Marketing offices will close at 2:00 CT; there will be no Top Farmer Intelligence report.


Corn futures were weaker overnight as the grain and oilseed complex eases on year-end profit-taking and mixed weather news for South America.  In addition, Tuesday’s outside day key reversal form six-month highs adds to selling pressure.  March corn is down 3-1/2 cents this morning to 6.02 which was the overnight low while drifting down near important support areas.  Dec corn is off 2 cents to 3.51.   Trade estimates for this morning’s USDA Weekly Export Sales are 500,000 to 1.10 mil tons versus 982,000 last week.  Interesting to note that China has imported a record $100 billion dollars of food imports and own 70% of world corn ending stocks.  Is this stockpiling of food in case their economy worsens?


Soybean futures were down double digits overnight with nearby Jan beans falling as much as 14-1/2 cents to 13.42.  Nov beans slipped 8-1/4 cents to 13.04-3/4 before trimming losses.  Meal contracts are down $2/ton and soyoil is down .45.  Weather forecasts for Brazil and Argentina are less than ideal heading into the new year, the prices are subject to year-end balancing.  Noon maps, yesterday pointed to reduced rains for parts of South Brazil.  Soy growers in Brazil’s top producer Mato Grosso state began harvesting fields, according to newswire/Reuters, marking an early start to a record-setting season with potential output above 140 million tons   Argentina is expected to miss most of the needed moisture.  Insufficient rainfall across key producing areas of the northern Pampas fractionally lowers 2021/22 Argentina soybean production to 45.7 million tons, despite decent planting progress so far.  Trade estimates for this morning’s USDA Weekly soybean Export Sales are 700,000 to 1.20 mil tons.  Soymeal exports are seen coming in between 100,000 and 300,000 tons.  With China largely absent from the bean market, prices are easing, for now.  Overnight, Chinese May bean futures were down 56 yuan; Soymeal down 8; Soyoil up 6; Palm oil up 24; Corn up 9.  Malaysian palm oil prices were down 12 ringgit (-0.26%) at 4683.


Wheat futures were mixed overnight and are holding modest gains in winter wheat contracts this morning.  March Chicago and KC contracts are up 2 to 3 cents to 7.89-3/4 and 8.27-1/2, respectively.  March Chicago peaked at 8.24 this week before bottoming out at yesterday’s intra-day low of 7.81-3/4.  March MPLS wheat is unchanged this morning at 10.09 in a mostly rangebound to slightly lower trading pattern.  The range since late October has been 10.00 to 10.50.  Trade estimates for this morning’s USDA Weekly Export Sales are 200,000 to 500,000 tons.  Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said it bought 300,000 tons of wheat in an international tender for shipment Feb. 15 to Mar. 3.  The purchase comprised 60,000 tons of French wheat, 180,000 tons of Ukrainian wheat and 60,000 tons of Romanian wheat.  Light volume trade this week and renewed focus on weak exports has the complex backtracking and sagging into the 3-day holiday weekend.  Increased U.S. farmer selling in 2022 is also negative.  Meanwhile, dry U.S. south Plains weather provides some underlying support.


Cattle futures are called steady to higher on follow-through from a strong breakout to the topside in Thursday’s session.  Most contracts forged new contract highs on the day.  Feb live cattle closed at 140.725 and look to make a run at the high of 141.85. Feeders made sharp gains, too in a bid to make new highs before the end of the year.  Cash market performance is unfolding near $140/cwt, and beef prices have improved.   The was no trade in the south with Texas and Kansas passing $138 bids with asking prices mostly $140 and up.  Yesterday’s online Fed Cattle auction  on Wednesday had zero sales as packer bids of $138.50 proved unsuccessful against mostly $140 reserve prices.  Northern live prices are $3 to $5/cwt higher.  Seasonally, cattle futures tend to move higher until about the first week of January.  Look for more upside probing as traders prepare for year-end and the three-day weekend.


Hog futures are called mixed after settling higher on Wednesday.  June through December contracts made new highs after last week’s bullish reversals.  Feb hogs, at 83.825, have rallied back to within a test of the Nov 26 high of 84.675 leaving the contract technically overbought heading into today’s trade.  A weekly close above 87.50 for the April contract would be a bullish setup for a potential retest of the contract high at 91.875.  Given the latest Commitment of Traders report, long liquidation pressure is possible if reversal action reappears.  Pork cutout values fell .86 yesterday, but the lean hog index rose to 71.82.


Matthew Strelow

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

back to TFM Market Updates