TFM Sunrise Update 4-29-2021


Corn futures were back up overnight following a brief, mid-week correction.  May corn was up 14-1/4 cents to get back to 7.00 supported by tight nearby cash corn basis.  July was up 9-1/2 cents to 6.53-1/2.  Dec traded a 9-1/2 cent range between 5.40 and 5.49-3/4 and was recently up a penny to 5.47-1/2 as talk by one grain CEO of higher US 2021 corn acres than USDA’s March forecast weighs on the new crop contract.  This morning’s Weekly USDA sales are estimated between 400,000 to 1.0 mil tons.  New crop sales are estimated near 100,000 to 600,000 tons.  Tender activity showed South Korean feed groups bought 271,000 tons of optional-origin corn and seek 138,000 tons of optional-origin corn.  Look for choppy action to dominate the scene after this week’s violent pullback from new highs.  With cold weather putting a halt to the rapid sowing pace seen earlier in the month, unchanged area and yield forecasts maintain 2021/22 U.S. corn production at 15.32 bil bu.  Corn area is still expected at 93.9 mil acres, above the USDA March 31 report figure of 91.4 mil.  The next USDA survey-based estimate of acreage will be released in the 30 June report.


Soybeans are higher this morning with nearby May up 13 cents to 15.70-3/4, July up 9 to 15.22-3/4; and Nov up 1-1/2 cents to 13.29-1/2 while respecting the upward-trending 10-day moving average.  Talk from one grain CEO of higher US 2021 soybean acres than USDA’s March estimate is offering resistance new crop.   April is historically an uncommon time for beans to put in their highs.  Since 1973, new-crop November soybeans have made their annual highs in April only twice: 1986 and 1981.  Along with October, April is the least common month for the high.  June is the most popular month for highs in new-crop soybeans with 10 instances in the last 48 years . July and November are tied for second with seven apiece.  May and August are next at four each.  Nearby May bean oil is making new highs above 70.00 at 70.86.  Trade estimates for this morning’s USDA Weekly old crop soybean sales are minus 100,000 tons to positive 200,000 tons.  There was talk of China cancelling Brazil sales.  New crop sales are estimated near 200,000 to 500,000 tons.  Chinese Ag futures (September) settled down 4 yuan in soybeans, up 2 in Corn, down 18 in Soymeal, down 2 in Soyoil, and up 74 in Palm Oil.  Malaysian palm oil prices were closed for holiday.


Wheat futures are up 4 to 6 cents this morning.  July Chicago is at 7.28-1/2 and consolidating inside yesterday’s trading range.  July KC is at 7.00-1/2.  July MPLS wheat is at 7.37-1/4.  Both last evening’s GFS model run and the midday GFS model run showed significant precipitation in the Northern Plains May 8 – 10.  Look for corn and world 2021 to direct the wheat market.  This week’s Egypt tender cancellation due to high prices has helped quell the rally in wheat.  Today’s Weekly US wheat exports are estimated near zero to 300,000 tons.  New crop sales are estimated near 200,000 to 450,000 tons.  In tender activity, Philippines seek 185,000 tons of optional-origin wheat.  Algeria bought an estimated 200,000 to 360,000 tons of optional-origin wheat


Cattle calls are steady to lower following yesterday’s weaker trade as prices consolidate around 116 in the June contract.  The nearing April expiration may be weighing on the market in general, but the mixture on fundamentals is signaling different directions.  Retail carcasses and beef demand has stayed strong, but carcass values were mixed on Wednesday.  Choice gained 1.51 to 292.50, and Select finished .53 lower to 279.00 on good movement of 130 loads.  Cash is starting to develop this week with the early direct trade ranging from $118-120, mostly steady to lower than last week.  The cash market is struggling with the amount of slaughter animals available, keeping leverage with the packer, despite the strong demand and margins.  Last week, estimated slaughter was 523,000 head, and if that is accurate will be the largest for the year. Beef production last week was 550 million pounds, up 20 million from last week, giving the market the feeling that there is enough animals available to meet the strong demand.  The price action has been weak, and a break lower is still a possibility as the market looks for a bottom.


Hog calls are higher after finishing with strong gains on Wednesday.  The market has consolidated the past few sessions, but did finally break out to the upside.  Some of the strength may be in anticipation of this morning’s Weekly Export sales.  The sales totals will likely provide the direction into the end of the week.  Carcass values were soft at the close with pork carcasses dropping 2.47 to 108.21 on 301 loads.  Pork carcasses have been trending softer this week, but still at historical highs amid robust demand for pork.  The Lean Hog Index gained .22 to 107.39 as prices stay in an uptrend and supportive for the market.  The technical picture looks very friendly and that market seems poised to challenge the recent highs in the June contract.  Deferred contracts made that move yesterday, closing at new contract highs.


Matthew Strelow

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