TFM Sunrise Update 3-2-20


Corn futures were firm overnight, trading 1 to 2 higher after pushing into new contract lows last week. The market is susceptible to additional follow-through selling pressure. However, a distinct retreat in the dollar combined with stability in crude and equity markets to begin the week, as well as Weekly Export Inspections numbers later this morning, offer early-week support to corn. Once again, outside markets will be key in determining direction as the corn market is acting more as a follower versus a leader in this time frame as coronavirus news plays out. Much of the talk over the weekend seemed to focus on the value-buying opportunities in a wide array of markets after the recent price plunge. In addition, much will depend on whether or not China steps up purchases of U.S. corn and DDGs in the first half of the year.


Soybean futures were up 3 to 4 cents in most contracts, 7 in the nearby March. Bean oil and meal were up, too and will help provide support under the soybean market as was the case last week, as an improved technical picture in that meal market forms. The U.S. is still struggling against South America for export competition, and the prospects of China stepping into the bean market may keep sellers on edge. Brazil’s harvest, seen at 43% complete last week compare to 56% for that time last year.


May wheat futures were down 4 to 5 cents overnight, languishing now below 200-day moving averages, even with a significant pull-back inthe dollar. While U.S. demand has stayed relatively strong, weakness in the charts after a difficult close last week may is attracting some additional long liquidation. Global wheat supplies are still relatively full, and overall weakness in outside markets does not bode well for the wheat markets.


Cattle futures are called steady to firmer. After a difficult week, Apr futures have yet to see a slowdown in the selling pressure as the combination of poor fundamentals as well as risk-off trade in outside markets make the path of least resistance lower. However, outside markets are firmer this morning. The cattle market is strongly oversold and may be due for a corrective bounce, but any upside potential is limited given the heavy production of U.S. beef and demand concerns.


Hog futures are called mixed. Strong sales of pork to China on last week’s export sales numbers may be the tip of the iceberg as China has strong demand for U.S. pork and pork products. The implementation of tariff waivers next week could bring buyers into the U.S. market, and overall supportive of price in the face of strong U.S. production.


Carol Tillmann

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