TFM Sunrise Update 4-23-20


Corn futures traded 4 to 5 cents higher overnight and are quickly trading 15 cents above contract lows.  Dec corn got to 3.41-3/4 last night and is in the midst of a nice technical bounce from testing the multi-year low on Tuesday.  The improved technical signal may attract additional short covering unless demand is still viewed as a headwind over the top of the market.  Weekly corn usage for ethanol stayed low at 55 million bushels for last week as an estimated 77 ethanol plants are idle.  Trade estimates for this morning’s USDA Weekly Export Sales are 600,000 to 1.10 mil tons for old crop; 50,000 to 300,000 tons for new crop.


Soybean futures rallied as much as 14 cents overnight and meal and oil were also higher.  Like corn, this is putting a bottom, at least for the week, into row crops.  China did pick up 196,000 mil tons of soybeans which is a source of support for the market, however, the Brazilian Real continues to plummet to a record low versus the U.S. currency which is giving South America the competitive edge when it comes to exports.  Trade estimates for this morning’s USDA Weekly Export Sales are 300,000 to 750,000 tons for old crop, 50,000 to 300,000 tons for new crop.  Soybean meal sales are seen coming in between 100,000 and 300,000 tons for 2019-20, and zero to 25,000 tons for 2020-21.


Wheat futures were up a nickel in Chi contracts overnight, 2 to 3 in KC; And, 8 cents in Mpls as the spring wheat market rebounds from a 5-week low.  After a strong start to the week, wheat futures have been on a bumpy road.  Prices have been in consolidation mode the past 2 sessions and now look to be on the upswing as selling dries up and conditions in the western Plains turn dry with little rain in the May forecast.  This should reinforce a move higher as prices regain their composure.  Trade estimates for this morning’s USDA Weekly Export Sales are 100,000 to 300,000 tons for old crop, 200,000 to 500,000 tons for new crop.


Live cattle futures are called two-sided as the trade digests Cold Storage data.  The report was from March data and was up 2% over February and 11% from last year.  This shows fresh meat sales were good and supplies enough to meet demand with bigger kills.  We don’t look for much reaction from the futures market today.  Despite the strong surge in retail carcass values pushing to record high for choice carcasses, the concern about cash markets and the slaughter pace limit rally potential from here.  Early cash is trending steady to lower with last week, but not enough to establish a trend.  We view the market as searching for direction and to remain choppy.


Lean hog futures are called steady to lower.  Processing plant closures keep concerns alive about handling the large supply of slaughter-ready hogs.  An additional round of plant closures came to light on Wednesday.  Approximately 15% of packing plant capacity us currently down and supplies of slaughter hogs are backing up.  Pork in freezers went down 2% from the previous month, likely due to strong exports from China.  The Cold Storage data reflected a decrease of 2% from a year ago when slaughter was running nearly 5% above year ago.  Like cattle, we don’t expected much reaction to the data.


Lisa Heder

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