TFM Sunrise Update 4-7-20


Corn futures were firm overnight after slipping on Monday and challenging key support levels in the front month contracts.  Dec is back to 3.50 on gains of 2 cents with crude and stock index futures higher.  Weekly export inspections remain strong at 50.1 mil bu for last week,  as the export market improves for U.S. corn.  All said, corn should find some firm footing for this morning’s trade after making a new contract low to begin the week.


Soybean futures were up a nickel overnight, yet remain in consolidation mode around their respective short-term moving averages.  Strength in soybean oil prices provides some support.  On the flip side, global competition for exports as Brazil moves into the final 20% of harvest with prices running at a discount to U.S. beans will limit rallies.


Wheat futures were down overnight led by Chicago wheat losing 8 cents. KC was down 5; And, Mpls 4 cents.  Dry weather concerns and logistics issues has created premium for Russian wheat prices, thus supporting global prices.  Demand and movement in the dollar, which pulled back overnight, will still be the key for U.S. wheat.  Yesterday’s disappointing export shipments may make it difficult for prices to extend their recovery move.


Live cattle futures are called steady to higher due to the oversold condition of the market.  June live cattle fell to a new contract low for a third consecutive day on Monday, but closed only slightly lower, which would support a short-covering bounce as the complex seeks stability in retail and cash prices. Yes, this market is cautious of potential slaughter slow downs which could back up cattle supplies and disrupt processing lines, however, talk of the deep discount of futures to cash should spark some recovery.


Lean hog futures called steady to higher after posting some bullish key reversals off of new contract lows on Monday.  Concerns of slaughter plants slowing, and in some cases stopping their processing lines as a result of COVD-19 in the U.S. is likely figured into the market.  This will still likely keep gains limited given the large supplies of hogs available for slaughter.  The discount of April hogs to the index provides some support as the market looks for some form of price stability between retail and cash markets.


Kelly Rubisch

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