TFM Sunrise Update 3-4-21


Corn futures read steady to 3 cents lower overnight, again led by the nearby contracts.  May was down 3 to 5.32-1/4 and overnight session high at 5.38-1/4.  Dec corn is fractionally lower to 4.72-3/4.  Funds were net sellers of 22,000 contracts of corn yesterday and are net long an estimated 331,000 contracts.  Trade volume was light last night as prices trend mostly sideways ahead of next week’s monthly USDA report and ahead of spring weather unfolding.  Argentina’s weather is dry but they are still offering corn for export below U.S. prices.  Brazil’s second corn crop sowings continue to run into severe delays, according to Refinitiv Commodities Research.  Trade estimates for this morning’s USDA Weekly Export Sales are 400,000 to 800,000 tons for old crop and 50,000 to 250,000 for 2021-22 marketing year crop.  Overnight, South Korea bought 68,000 tons of optional-origin corn and Algeria seeks 30,000 tons of option-origin corn.


Beans were choppy overnight and are firmer this morning.  May beans are up 4 to 14.11-1/2.  Nov is up 2 to 12.26.  Concern about late harvest in Brazil and rains reducing quality offers support, countering concern about a slowdown in Chinese buying and weaker currency in Brazil.  Talk of the possibility that USDA may not make big changes to the U.S. 2020/21 soybean balance sheet on March 9 offers resistance.  Trade estimates for this morning’s USDA Weekly Export Sales are 100,000 to 500,000 tons for old crop beans and zero to 300,000 for 2021-22 marketing year crop.  Meal estimates are 100,000 to 300,000 tons.  Soyoil sales look to come in at zero to 25,000 tons.


Wheat futures were narrowly mixed overnight with some pressure stemming from a higher dollar.  May Chicago wheat, at  6.55 continues to bounce around between 6.40 and 6.80.  The May KC contract, at 6.27-1/2, traded a 7 cent range between 6.24 and 6.31 last night.  May Mpls futures are up 2-1/2 cents to 6.45-1/2 and may be guiding the complex on north hemisphere spring weather.  The U.S. south Plains could see rains begin to fall tomorrow and late next week.  Winter wheat futures are struggling with talk of lower EU and Russia wheat exports and high inverses in Matif and Russia wheat futures versus low U.S. wheat export demand and carries in U.S futures markets.  Food services look to be preparing for and increase in post Covid food demand amid talk of higher U.S. GDP.  The House of Representatives removed aid to famers in the new stimulus deal. Senate Republicans will try to add it back in.  Trade estimates for this morning’s USDA Weekly Export Sales are 100,000 to 500,000 tons for old crop and zero to 100,000 for 2021-22 marketing year crop.  Overnight tenders included Jordan passing on 120,000 tons of optional-origin wheat,  Algeria bought an unspecified amount of optional-origin wheat; And, Taiwan bought 100,410 tons of U.S. wheat.


Cattle calls are for steady to higher with the  market firming up after Tuesday’s reversals.  The technical improvement could bring additional buying support.  Cash markets stay steady with last week at $114/cwt and $180 dressed.  Remaining trade will be slow to develop going into the end of the week.  Retail carcasses have softened this week, bringing concerns about hitting a seasonal peak in demand.  Choice carcasses finished Wednesday 1.65 lower to 233.03. and Select was lower by 1.93 to 224.24. Movement was good at 120 loads.  Feeder cattle look technically strong, supported by strong deferred live cattle market.  Prices saw good follow through buying after Tuesday’s turn higher.


Lean hog calls are higher.  Pork prices recovered and buyers jumped back into the market fueled by strong cash market and retail demand.  Cash hogs stay strong, and the Lean Hog Index gained another .73 to 82.63. The index has gained over 22 points since the start of the year.  Talk of ongoing and developing issues with African Swine Fever in China build long term optimism for Chinese pork demand well into 2021, supporting deferred contract backs into new highs.  Pork carcass finished the day softer, losing 3.46 to 91.41 with movement of 280 loads.  Retail prices over $90 help fuel the strength in the cash market.  Weekly export sales are anticipated to be supportive, and could help fuel the price direction for Today.


Matthew Strelow

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