TFM Sunrise Update 2-5-20


Corn futures were firm overnight with contracts back up near their respective moving averages. Look for more sideways trade as the market awaits news. This could come in the form of the upcoming Feb 11 Supply and Demand report. Weekly Ethanol Stats will be out today, though too. Elsewhere, wet weather forecast for Argentina is not friendly for the corn market.


Soybean futures are up another nickel this morning and were up as much as 8 cents overnight, underpinned by a good export sales pace in recent weeks, along with a strong crush figure and oversold technical conditions. Mar beans, at 8.85 are commingling with the contract’s downward sloping 10-day moving average and rebounding soy-oil is helping the complex mid-week amid improving Malaysian palm oil prices. South American weather remains mostly conducive to crop production and could create some resistance to higher prices the rest of the week. Private firms are estimating a record crop of soybeans this year out of Brazil.


Wheat futures traded 5-1/2 cents higher overnight following a shaky start to the week. Above average precipitation is spelled out in the weather forecast for the next 2 weeks in winter wheat country which could prevent the market from trying to regain its bullish composure. In addition, the rise in the greenback dampens U.S. export potential, along with a rise in Ukrainian Exports. The Ag Ministry there states exports stand at 15.9 mil tonnes, 37% ahead of last year’s pace.


Cattle futures are called mixed. Prices stagnated yesterday with little change on futures despite an early-session rally. Consolidation is probably the key term for cattle after a 5.00 drop on futures, mostly technically related. Long liquidation is still playing a role in this market.


Hog futures are called mixed look for volatility to continue, as the hog market tries to digest oversupply in the U.S. versus the need for world inventory, particularly in China. The trade seems to be viewing technical bounces as reason to be active sellers until the pork product market shows signs that U.S. pork is just too cheap.


Lisa Heder

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