TFM Sunrise Update 4-16-21


Corn futures were firm overnight after settling off their new highs on Thursday.  July was up 3 to 3.79-3/4, and up 17 cents for the week.  Nearby May is up 2-3/4 cents to 3.92-1/2 while fast approaching the psychological %6 price level.  Dec was up 2-1/2 cents to 5.14-3/4 after posting new contract highs for the third day in a row, triggering farmer selling, including profit-taking on long futures positions as the market enters overbought territory.  Yesterday’s new high stands at 5.17 for the 2021 new crop contract.  Historically tight ending stocks and the farmers’ reluctance to plant in cooler soil conditions this week keep prices supported at the mid-point of this month.


Beans were higher overnight and are sitting atop their respective ranges.  July beans advanced 10 cents to 14.21.  Nearby May is also up a dime to 14.28-1/4, and Nov is up to 6 to 12.75.  All three contracts are trading above their respective moving averages which would accelerate a move higher if resistance levels are taken out.   An outlook for extraordinarily tight stocks and this weeks colder temperatures threatening early planted beans in the Midwest supports more price strength.  Outside markets are helping to push the market as well.   Within the bean complex, though, meal prices continue to stall out.  China’s wheat feeding to pigs and poultry has dented demand for alternate feeds and clouded the market outlook for soybean meal and other key ingredients used by the country’s massive feed sector.  Chinese Ag futures (September) settled up 72 yuan in soybeans, up 30 in Corn, up 61 in Soymeal, up 140 in Soyoil, and up 224 in Palm Oil.  Malaysian palm oil prices were up 104 ringgit at 3,694 (basis July) at midsession on improving exports.  In Brazil, erratic shower and thunderstorm activity is expected through April 24 leading to some areas receiving meaningful rainfall with an increase in soil moisture and some pockets missing out from getting much.  Last evening’s GFS model kept “some” rain in Brazil through the end of April; though, it showed less rain in northern areas and greater rainfall near Paraguay April 28 – 30 compared to the midday GFS model run.  In Argentina, conditions will still be mostly good; though, rain Monday into Thursday of next week will cause some temporary fieldwork disruption.


Wheat futures were mixed overnight and are currently in the red this morning.  July Chicago is down a penny to 6.54-1/2, but up 14 cents for the week.  July KC is down 3-1/4 to 6.12 and up 16 cents for the week.  July MPLS is down 2 to 6.69-1/4 and currently up 8 cents for the week, not including a midweek contract high posted at 6.75-3/4.  Significant rain and snow tonight into Friday in much of the Hard Red Winter Wheat Region will still notably increase soil moisture with the exception of the Texas Panhandle and western part of the Oklahoma Panhandle.  The GFS model continues to shift around a possible storm in the Northern Plains in the last week of the month.  Last night’s run was drier and less aggressive for this system April 26 through the 28th compared to the midday model.


Cattle calls are mixed.  Futures were lower again on Thursday on additional long liquidation and disappointing cash trade that started to develop yesterday.  Texas and Kansas saw cash trade at $120, $121 respectively, steady to slightly higher than last week.  Northern trade has stayed quiet overall.  Choice carcasses gained and additional 3.71 at the closed to 276.62, and Select was 1.12 higher to 268.43.  Light to moderate movement at 103 loads happened as beef demand stays strong.  This should underpin prices on the open today, as well as the likelihood for value buying and profit-taking after a six-day pull back in prices.  Feeders remain weaker, pressured by the rally in grains and weaker live cattle.


Hogs are called steady to lower after sliding sharply lower with a majority of contracts pushing limit down on Thursday, expanding the trading limits for today’s session to $4.500.  April hog futures and options expire today, which has added to the volatility this week.  Poor export sales helped break the market lower.  USDA reported weekly export sales last week at 17,200 MT, a marketing year low and down 48% from last week.  Keep in mind the markets were dealing with Easter week for those sales, and China was on Holiday.  Export shipments were still supportive at 38,600 MT.  Cash markets and  the Lean hog Index stay firm.  The Lean hog index gained .32 to 102.70, narrowing its gap to the April futures.  Carcass values were higher at the close, gaining 3.28 to 113.37 with good movement at 339 loads.  Strong carcass prices should help support hog futures prices, however, additional technical selling and follow through selling is likely on the open after limit down close, while the strong fundamental situation is seen as a supportive factor.



Matthew Strelow

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