TFM Sunrise Update 4-17-20


Corn futures saw an uptick overnight after making another around of new contract lows on Thursday.  A gap higher in stock index futures overnight seems to be fueling a little short covering in row crops as the week comes to an end.  Dec corn is up 2 to 3.43 and the nearbys were up 3.  The corn market had also become deeply oversold which may lead to some of that short-covering ahead of the weekend.  Poor demand from the ethanol market and a drop in National Corn Index, representing cash prices, and new lows in crude last night is going to keep the downtrend intact, however, particularly with no apparent weather concerns heading into this year’s U.S. planting season.


Soybean futures were up 2 to 3 cents overnight, and meal and oil firm.  The story line all week has been that U.S. beans are struggling to compete while running at a premium to South American soybeans and demand for feed has lessened due to the affects Covid-19 is having on the economy.  Weekly exports were disappointing at 9 million bushels for last week, and reflect those struggles. Charts have been weak, technically and are due for a bounce.  For the week, May beans, at 8.39 are down about 30 cents from the peak of 8.70 in Monday’s trade and up 18 cents from the contract low set one month ago.  Nov beans are at 8.57 and down about 25 cents from Monday’s peak.


Wheat futures were softer overnight with Chi contracts down 3 to 5 cents to their respective 200-day moving averages.  A weaker close today would mark a fifth consecutive lower trading day that has seen the market tumble more than 30 cents for the week.  KC wheat was down 1 to 3 cents; And, Mpls contracts are mostly unchanged heading into today after reaching a 4-week low.  Disappointing Weekly export sales at 6.6 million bushel for old crop were combined with news that Egypt opted for French and Russian wheat in their latest tender, rejecting competitively priced U.S. wheat due to the high shipping costs.


Live cattle futures are called ‘uncertain’.  Plant closures and slowdowns backing up cattle continue to be on the minds of cattle traders, and there may not even be any cash sales to report for the week.  Early indications for the cash market are lower if scattered sales are made.  This will likely limit short-term rallies.  Retail values have strengthened this week, which is supporting price.  Technically, the cattle complex is carving out a bottom on the charts which would reinforce a move higher if resistance levels are taken out.


Lean hog futures are called steady to lower after June closed sharply lower and into a new contract low close.  However, a surge in stock index futures, and stability in cattle futures may allow fresh selling interest in hogs to evaporate and lead to a short-covering bounce.  Fundamental pressure remains in place in the form of processing plant closures causing big supplies of slaughter-ready animals and keeping a heavy hand on cash markets and animal flow.


Kelly Rubisch

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