TFM Sunrise Update 3-26-20

CORN

Corn futures are called mixed for today with Weekly Export Sales on tap for 7:30 AM. Prices eased 3 to 4 cents in the nearby contracts, 2 in new crop Dec overnight after closing higher each of the last three sessions. Choppy trade can be expected on the prospects of improved demand through exports and an uptick in energy prices. A weakening U.S. dollar helps grain markets in general as far as export demand, but concerns regarding a lack of need for corn amid the crash in ethanol and a weakened cash market limits rally potential. Weekly Ethanol Stats on Wednesday showed corn-use lagging the weekly usage estimate of 104.5 mil bu needed to meet USDA’s crop year estimate of 5.42 bil  bu. In outside markets, the closely watched stock index futures are down 200 points after closing well off their highs on Wednesday.

SOYBEANS

The soybean complex was lower overnight after front month soybean and soybean meal futures posted a disappointing technical close on Wednesday. Overnight, beans lost a dime in May to 8.71-1/2 and 6 cents in Nov to that same price level, 8.71-1/2, likely on reports that Brazil is seeing a return to normal operations at their ports. Weekly export sales with be closely watched in this morning’s report to see if U.S. beans are gaining any traction vs. world exporters.

WHEAT

Wheat futures eased 5 to 6 cents overnight with KC May wheat stalling at the key $5.00 per bushel price level. Buyers have been aggressive in the wheat markets as global demand by millers for flour to rebuild bread and pasta supplies drives support and, a sharp selloff improves export prospects. Technically, a strong close in Wednesday’s trade opens the door for front month Chi wheat futures to test January highs near 5.90 on May Chicago wheat futures. Yesterday, the contract peaked at 5.83-1/4 and is currently trading near 5.75.

CATTLE

Live cattle futures called mixed one day after experiencing a 640 point trading range as the market absorbs huge production increases for a variety of meats during a period when many U.S. restaurants are closed. Nearby April Cattle futures, at 108.45, are trying to play catch up to cash prices with early sales this week in the $118-120 range. Retail values are at their highest levels since 2015 but have stabilized the past two days, bringing some pause and profit taking into cattle futures.

HOGS

Lean hog futures called mixed to lower as the nearby April contract, which settled at 65.86 on Wednesday target the bottom of the gap left from Tuesday at 64.57. Weakening retail demand prices weighed on hog futures in Wednesday’s trade but USDA weekly export sales may provide the direction for today, as the trade looks for new purchases and shipments of pork to China as the country recovers from its COVID-19 outbreak.

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Lisa Heder

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