TFM Sunrise Update 2-8-2021


Corn futures were firm overnight with March at 5.51-1/2 and Dec up a penny to 4.52-3/4.  Prices are consolidating, but still trending higher and look poised to make new highs amid talk of tighter U.S. 2020-21 stocks as Funds remain heavily long corn.  Trade estimates for corn carryout are averaging near 1.392 bil bu compared to the last USDA estimate of 1.552.  Pro Farmer estimates carryout at 1.350. and 2021 U.S. corn acres at 93.0 with a yield at 179 which would produce a crop near 15.300 bil bu.  They estimate total demand near 15.0 bil bu which suggest a carryout near 1.70.  A Farm Futures survey conducted last month of 806 farmers showed higher corn acres over beans, estimating a 4.1% increase from last year to 94.7 mil in 2021.  That would be the third largest ever for the U.S., falling short of only 2012 and 2013.  We’ll get the official estimates from USDA at the end of March in the Planting Intentions report, but the upcoming annual USDA Forum scheduled  for Feb 18 and 19 will touch on these numbers.   Trade estimates for Argentina’s corn crop is near 47.0 mmt versus USDA’s 47.5.   Brazil’s crop is estimated near 108.4 versus 109.0.


Soybean futures were mixed overnight within their sideways two-week trading ranges.  March beans are fractionally lower at 13.66 and adhering to 10 and 20-day moving averages.  Nov beans are firm at 11.61 on gains of 3 cents.  Trade estimates for Tuesday’s USDA U.S. 2020-21 soybean carryout is averaging 123 mil bu versus USDA last month’s 140 bil bu number.  Trade estimates for Argentina’s soybean crop is near 47.6 mmt versus 48.0;  Brazil’s crop is estimated near 132.4 versus USDA’s last 133.0 figure.   Farm Futures magazine surveyed 806 farmers and estimated 2021 soybean acres near 84.5 in the U.S.  Harvest of soybeans in Mato Grosso, Brazil’s largest soybean producing state, was only 5% complete as of a week ago versus the average of 18% complete.  Ships are currently docked and waiting to be loaded with freshly harvested soybeans in Brazil.  Delayed planting and now recent wet weather has slowed soybean harvest and second crop corn planting.


Winter wheat futures were up 4 cents overnight and mid-range to start the week.  Cold weather in the Plains is noted, but not expected to be a risk factor for the winter wheat crop.  Nearby Chicago and KC contracts continue to plot along 10 and 20-day moving averages on the  daily charts awaiting market-moving news to influence direction.  Mpls spring wheat was up 2 to 3 cents.  Trade estimates for U.S. 2020-21 wheat carryout is near 834 mil bu versus last month’s 836.  The trade also estimates World wheat carryout near 312.8 mmt versus USDA 313.1.  Farm Futures magazine surveyed 806 farmers and estimated U.S. 2021 wheat acres near 46.0 mil with spring acres near 12.6.  Stats Canada numbers came in shy of expectations, with Dec 31 wheat stocks at 24.8 (21.0) on farm.


Cattle futures are called steady to firmer as cold weather settles into the Plains this week, potentially throwing a wrench into weight gains and marketing plans.  Steer weights remain record heavy for this time of year, but we may see cash and futures continue to creep upward this week.  Last week, April live cattle, at 123. 77, posted close to a $10 gain over cash which came in $1/cwt higher than the previous week with packers paying $114.  Some caution is warranted with prices having become technically overbought.  The next area of resistance for April is 124.70 and  124.77.  However, strong demand is expected on the horizon should the economy reopen.


Lean hog futures are called higher on follow-through buying and other factors.  Futures posted new contract high closes on Friday that should usher in more technical support technical.  Strong demand, both domestically and and abroad are supporting carcass values at $84.  The Feb hog contract expires on Friday and is currently at a premium to the cash index which may limit gains.  Cold temperatures across the Midwest will likely prop-up cash hog prices.


Matthew Strelow

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