TFM Sunrise Update 4-2-20


Corn futures are firm this morning on gains of 2 cents following another difficult session on Wednesday where a new contract low was posted in new crop contracts.  Firm trade in the stock index futures  and crude this morning may be helping corn a little.  Plus, Weekly Export Sales will be out at 7:30 AM CT and with strong shipments, we may see a little price bounce heading into the end of the week. Trade estimates range between 700,000 and 1.20 mil tons for old crop, Zero to 100,000 tons for 2020-21 crop.  Don’t look for too much rally potential, though.  Demand concerns remain an active driver in the fund selling vehicle with the weakened energy markets curtailing ethanol production, and thus corn usage.


Soybean futures are narrowly mixed this morning, mid-range of 10+ cent trading range overnight.  Weekly export sales will be a key to possibly provide support.  Trade estimates range between 375,000 and 900,000 tons for old crop, zero to 100,000 for new crop beans.  Meal estimates range between 100,000 to 350,000 tons.  The U.S. is competing against Brazil for soybean exports, and Brazilian shipments for the month of February reached a massive total of record shipments of 11.6 MMT up 38% over last year.  Should the market fail to gain footing, carry over from yesterday’s lower session is likely to attract more technical weakness to the charts and additional long liquidation.


Wheat futures were down 7-1/2 cents in Chi and KC overnight after strong selling pressure arrived in Wednesday’s trade, bringing long liquidation and profit taking into the market.  Weak technical closes spurred further selling overnight, setting the stage for a lower week of trading in the winter wheats.  Underlying support remains due to world demand for wheat and some stability in the green back which dropped significantly last week.  Trade estimates for this morning’s USDA Weekly Export Sales are 100,000 to 500,000 for 2019-20; 150,000 to 450,000 tons for 2020-21.  Mpls wheat was down 2 overnight while taking cues from the more heavily traded winter wheat varieties.


Live cattle futures called lower as economic concerns corner the market.  The threat of a shutdown of production facilities focusing on the processing plants for beef, pork and poultry remains a bearish perception for the meat trade.  Cattle futures saw limit down trade across the board on profit taking fueled by lower cash trade and sharp drop in retail values, so expanded limits will once again be in play today.  The lack of retail demand saw Choice carcass drop $14+ in the past two days. Early cash trade this week was posted around $112 in the south, down $6-8 from last week’s levels.  Tomorrow is the last trading day for April live cattle options.  First Notice day for the contract is next Monday.


Lean hog futures called lower.  Hog futures finished limit down in all contracts on Wednesday with a strong drop in retail and cash values, so look for expanded limits today.  Yesterday’s sharp drop at the open left the second gap in four days on the hog chart and has put prices in a technically oversold condition.  Prices have pushed to new contract lows and are likely to see additional follow through selling while the market is dealing with an over supply of market hogs and demand concerns regarding COVID-19 and the retail consumer.


Kelly Rubisch

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