TFM Sunrise Update 3-5-20


Corn futures were down overnight, along with a pullback in stock index futures and crude. May corn is down 3-1/2 cents, and Dec down 1 after firming mid-week. May got to 3.81-3/4 with technical resistance coming in at the 40-day moving average situated at 3.87. Technicals are beginning to firm, particularly on front months as demand for cash corn in the country drives better basis, and drier weather concerns in South America surface that could impact second crop safrihna corn. Trade estimates for this morning’s USDA Weekly Export Sales are 800,000 to 1.20 mil tons versus 864,000 last week.


Soybean futures were choppy last night with another round of new highs posted amid bull spreading. Higher palm oil prices and an expected raise in Argentine exports provide underlying support. Meanwhile Brazil’s currency continues to weaken this morning, and the U.S. dollar is lower. For the week, May beans, at 9.06-1/4 has a 32-3/4 cent trading range between last night’s high of 9.12-1/2 and Monday’s low of 9.79-3/4. Trade estimates for this morning’s USDA Weekly Export Sales are 300,00 to 600,000 tons versus 339,000 last week.


Wheat futures are flat this morning in Chicago and KC, firm in Mpls as rumors of Chinese interest in U.S. spring wheat float around. Prices plunged toward the close yesterday in all three classes, finishing with losses of 6-1/2 to 9 cents in Chi. Look for prices to stabilize, as short covering could be a feature today with less fear over coronavirus. Trade estimates for this morning’s USDA Weekly Export Sales are 400,000 to 600,000 tons versus 382,000 last week. The export pace appears to be in line with USDA’s targeted estimate for the crop year.


Cattle futures are called steady to higher on follow through after solid gains yesterday. We expect prices to remain range-bound until cash is more developed. For now, cash, at $113/cwt is well below where we were just a couple weeks ago. Fortunately, futures look to be gaining back some of the intense sell-off that began on Feb 19, plummeting the market into oversold territory.


Hog futures are called mixed. Prices continue to be carving out a bottom, though with some rather wide swings. Macro projections are friendly based on expectations for demand and where prices are currently trading. For the week, April futures are up $2.03, June futures are up $1.60 while July futures are up $1.85. Resistance for the April contract is now the February 19 high of $68.25. If that level is cleared, the next level of resistance would be 72.40-72.80.


Lisa Heder

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