TFM Sunrise Update 3-23-20


Corn futures were flat overnight despite a gap lower move into new lows for the stock index futures. Good gains in beans and wheat overnight are helping corn maintain a semblance of a price floor. The crude oil chart resembles that of corn. Corn prices rallied on Friday on good export news with China a buyer and the market did finish the week well off their lows. We’ll see what Weekly Export Inspections data holds later this morning. The latest commitment of traders report shows managed money net short 91,846 corn contracts as of March 17. Again, crude is also steady, but the dollar did make new high overnight before retreating.


Bean futures are higher on follow-through after a strong finish last week and good export activity and some concerns for the South American crop. May beans rallied an additional 14-1/2 cents to 8.77, propelling the contract back above its 20-day moving average for the first time since March 6. Nov beans got to 8.71-1/4. Private estimates are now suggesting the Brazilian crop could be 120 million metric tonnes, down roughly 5 million metric tonnes from just weeks ago. The latest commitment of traders report shows managed money net short 30,646 bean contracts; and net long 1,712 bean oil and 16,100 bean meal contracts as of March 17.


Nearby Chi wheat futures rallied nearly 20 cents to 5.58-3/4 overnight on follow-through while breaking through strong technical overhead resistance at both channel line and a 50-day moving average. Last week’s weekly gains were impressive as May futures posted weekly bullish key reversal after hitting a weekly low of 4.91-3/4 before posting a weekly high of 5.47 on Friday and closing the week at 5.39-1/4. May KC wheat achieved gains of 16 cent to get to a one-month high of 4.85. May Mpls wheat is up 12-1/2 to 5.13. The latest commitment of traders report showed managed money net short all of the wheat complex as of March 17; 5,659 contracts in Chi, 13,306 in KC; and, 19.925 in Mpls.


Cattle futures are expected to start the week steady maybe a little weaker due to more outside pressure from equities. Yet, from a big picture perspective cattle prices had a good week last week regaining some of the lost ground as expectations that consumer demand remains strong as retail stores remain mostly empty on shelving beef as consumers buy in stock and cook at home during the coronavirus. The market will also need to factor in Friday’s COF report showing U.S. cattle on feed up slightly. In other news, Tyson announced Friday that they will pay an assistance payment of $5/cwt for all cattle harvested this week. This will be added to the base cash price for the week.


Hog futures are called mixed. Prices firmed last week on front months but back months came under selling pressure. That could likely be the case again as the market views Jun and Jul contracts as overvalued as compared to front month Apr.


Carol Tillmann

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

back to TFM Market Updates