TFM Sunrise Update 4-3-20


Corn futures are higher this morning after trying to muster some spillover strength from the crude oil market in Thursday’s trade.  Crude has since backed off a little bit overnight.  The corn market might be gaining some swagger as the trade digests reports from the White House about Saudi Arabia and Russia agreeing to cut oil production by a combined 10 mil barrels per day which would help turn the negative tide in the ethanol industry.  Weekly export sales stayed supportive with weekly sales at the high end of expectations at 42.3 mil bu.  This continues the strong pace seen in sales for the 3rd quarter of the marketing year. The Dec corn contract was up 3 overnight to 3.53 and seems to collecting itself at, or near 3.50 after establishing consecutive contract lows since Tuesday’s bearish USDA acreage forecast.


Soybean futures were flat overnight. Thursday’s Weekly export sales of 35.2 mil bu was near the top end of expectations and Argentina’s soybean production forecast is slipping.  However, overall global competition from South America amid another round of new lows for the Brazilian real overnight remains a formidable barrier to price rallies.  Conditions in much of Argentina and Brazil will still be favorable for fieldwork and crop production.  For the U.S., a snow event will be possible in the Northern Plains during the Apr 10-12 time period.  There is an increase of precipitation across the Corn Belt and some nearby areas in the Apr. 15 – 17 time period.  Front month soybeans, at 8.58-1/4, are respecting the contract’s lower trending 20-day moving average on the chart, and are down more than 30 cents from the intra-day high on Monday.  The new crop Nov contract chart looks the same and is trading at 8.64 while finding some underlying support due to the lower than expected acreage projections and possible longer term demand potential.


Wheat futures bounced overnight after giving up much of the mid-March rally the past two-sessions.  Chi wheat is up 7 cents to 5.45-3/4.  July KC is up 9 cents to 4.80-1/4 and July Mpls is up 3-1/2 to 5.33-1/2.  Thursday’s export sales and shipments were a disappointment falling below USDA expectations.  This brought additional long liquidation in the wheat market.  However, the July winter wheat contracts are holding their respective lateral 200-day moving average support levels heading into the weekend.  Further price direction will come, in part, from the rhetoric behind Russia’s export quotas and Egypt’s expansion of reserves over the next six months.


Live cattle futures are called lower after gapping lower on the charts, which often creates a tendency for follow-through price discovery.  Cattle futures saw limit down trade across the board and posting new lows fueled by sharp drop in retail values as the pandemic wreaks havoc on the economy.  That lack of retail demand saw Choice carcasses drop $16+ in the past three days.  Early cash trade this week was posted around $112 in the south, down $6-8 from last week’s.  These cattle markets are cautious of potential slaughter slow downs which could back up cattle supplies.  Today is the last trading day for April live cattle options.  First Notice Day for April futures in Monday.


Lean hog futures are called lower as very poor technical indicators, including a series of gaps left on the charts from the free-fall experienced over the last 1-1/2 weeks leave the market searching for a bottom.  Hog futures finished limit down in the majority of contracts on Thursday including new contract lows for the whole complex amid a strong drop in retail carcass values.  Concerns of slaughter plants slowing their processing lines as a result of COVD-19 in the U.S. adds to the bearish price outlook.


Kelly Rubisch

Sign up to get daily TFM Market Updates straight to your email!

back to TFM Market Updates