TFM Sunrise Update 2-27-20


Corn futures were narrowly mixed overnight with a weaker tone including a new contract low of 3.80 in Dec as end of session selling in Wednesday’s trade pushed contracts to new contract lows or challenged those lows. This morning’s USDA Weekly Export Sales will be highly anticipated by the trade need to hold some bullish surprises to spark some buying interest. Trade estimates range between 800,000 to 1.30 mil tons. Meanwhile, crude oil and equities continued to tumble overnight, making new lows for the move and adding bearish influence on corn, and in the case of equities, a plethora of markets.


Soybean futures were down 2 to 3 overnight, meal weak and soy oil firm. Despite seeing some strength in Wednesday’s session, bean futures are still struggling against cheaper South American beans going through harvest. The dollar and Brazilian real are both weaker this morning and are beginning to trend together. Argentina Ag Ministry’s limiting of export registrations was supportive in the soybean meal market, but an overall stronger dollar and global competitiveness for U.S. against other exporters, mainly Brazil, keep pressure in the market in the short term. Trade estimates for this morning’s USDA Weekly export sales for beans are 600,000 to 900,000 tons; meal – 150,000 to 350,000; and, soy oil 8,000 to 45,000.


Wheat futures traded 2 to 3 cents lower overnight after staying in consolidation mode in Wednesday’s trading session, but weakness in the crude oil market will likely have some carryover effects into the wheat markets. Wheat supplies are relatively plentiful globally, and U.S. hard red winter wheat crop looks free of any major concerns at this time. Wheat prices will likely stay choppy, but a technical break could bring additional selling amid bearish momentum studies. Trade estimates for this morning’s USDA Weekly export sales 400,000 to 600,000 tons for 2019-20; 25,000 to 100,000 for 2020-21.


Cattle futures are called steady to lower. Weakness in equity markets continues to spill over into the cattle markets making it difficult for sellers to lessen their activity to the downside. Cash trade was disappointing this week, with cash and dressed trade notably lower than previous weeks’ numbers. Technical pressure continues, and prices may be poised to challenge key supports at the September lows.


Hog futures are called steady to firmer. Improving strength in the retail values as well as the cash market promotes some buying strength underneath the hog market in general. Weekly export sales will be highly anticipated to see if China has stepped into the U.S. market aggressively to secure pork supplies. Charts have firmed up recently, and have some additional room to move to the upside if demand merits it.


Carol Tillmann

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