TFM Sunrise Update 4-7-21


Corn futures were firm overnight.  May was up 3 to 5.57-1/4 and situated in the middle of Tuesday’s ‘inside day’ trading range just above 10 and 20-day moving averages.  Dec is up 1-3/4 cents to 4.85, lagging the nearby contracts on talk of favorable U.S. Midwest two-week and 30-day weather that should help corn planting.  One private group did increase their corn planted acreage guess to closer to 93.0 million acres vs USDA’s guess of 91.1.  Weekly Ethanol Stats will be out today, Exports tomorrow, and then the April USDA Supply/Demand report on Friday.  Technically, corn prices have quickly stabilized after USDA’s surprising acreage numbers.  Last week’s reports are typically the second-most eventful of the year in terms of price action.  The end-of-June USDA report, which includes June 1 U.S. stocks and acreage, has typically led to the most volatile days on the CBOT, particularly when current weather and crop conditions are factors.  The most-active CBOT corn futures have risen the daily limit twice already in 2021 on USDA report days, Jan. 12 and March 31.AC


The soy complex was higher overnight with bull spreading lifting nearby May beans 3-1/4 cents to 14.22 and Nov 1-1/2 cents to 12.72-3/4 vs last week’s new contract high of 12.85.  Malaysian palm oil prices were up 29 ringgit at 3,831 (basis June) at midsession supported by better exports and a tight supply outlook.  Spreads may need to rally to move elevator supplies.  Talk of a favorable weather forecast for the U.S. Midwest may be helping stall upward momentum in the Nov bean contract.  Notable drought conditions persist in central and western North Dakota and NW South Dakota.  This will likely continue at least the next two weeks.  Last Evening’s GFS model run showed some rain and snow shower activity in those areas Saturday through next Tuesday; though, not enough raise soil moisture and ease the drought.  For old crop, the NOPA March soybean crush could be a record high highlighting increased demand for cash soybeans.


Wheat futures were firm overnight.  Nearby KC wheat gained 4 cents to 5.59-1/2.  May Chicago wheat was fractionally higher to 6.16, which is where the contract’s downward-trending 10-day moving average lies, while trailing HRW futures due to lack of new export demand and USDA’s higher-than-average rating of the U.S. 2021 SRW crop.  Overnight, Egypt chose to secure their wheat supplies from Russia/Ukraine in their latest tender for 345,000 tons.  Thailand seeks 504,000 tons of optional-origin feed wheat; And, Japan seeks 90,815 tons of optional-origin wheat.  Meanwhile, traders argue whether or not some ridging will develop over the U.S. Rockies and spill into U.S. plains.  This will be monitored while estimating final U.S. HRW and HRS crops.  Trade estimates for U.S. 2020/21 wheat carryout is near 846 mil bu versus USDA’s 836 and World stocks near 301.7 mmt vs 301.2.  May Spring wheat futures were up 4 to 6.15.  Overall, the complex remains mired in a technical down-trending pattern awaiting market-moving news.


Cattle futures are called steady to higher following higher closes on Tuesday in a very quiet trading session.  Deferred contracts saw small gains with June and later contracts achieving new contract highs again.  The subdued market was likely a pause as traders wait for cash trade to develop.   Early cash bids saw $120-121 in Kansas, with some light $121 trade, higher than last week.  The Fed Cattle Exchange will trade later this morning which could set the tone for the cash market this week.  The majority of trade will likely hold off until Friday.  Choice carcasses gained 4.10 to 262.77 and Select eased 1.44 to 251.30.  Movement was good on 124 loads.  The Choice/Select spread is beginning to widen, trading at 11.47 late yesterday, a possible sign of a more current feedlot situation.  The cattle market could be on the verge of a breakout as feeders and live cattle are trading near multi-year highs as fundamentals support the market and money flow pushes the market higher.


Hogs are called steady to lower.  Tuesday’s trade was generally firm, led by the deferred contracts.  The front-end contracts are holding a strong premium to the cash index, and that likely will act as a drag on the up-trend, especially as April futures near expiration on the 15th.  The Lean Hog index traded another .72 higher and crossed the 100.00 barrier at 100.10.  Hog carcasses were quiet, but finished higher, trading up .10 higher to 109.39, on good movement of 414 loads.  Carcass value has held in the $108-109 range over the past week, possibly showing a limit to the upside.  Overall, the market may be slowing momentum on the front end and could be due for a pause or a pull back.  Fundamentals are still supportive, but the market is overbought and could be due for some liquidation.



Matthew Strelow

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