TFM Sunrise Update 4-8-21


Corn futures were firm overnight with contracts up a penny to 5.61-1/2  (May) and 4.86-1/2 (Dec).  Trade estimates for this morning’s USDA Weekly Export Sales are 500,000 to 900,000 tons for old crop, 50,000 to 300,000 tons for new crop.  Weekly export data suggests that March shipments reached an all-time monthly record by a long shot, likely topping 9 million tons. The largest-ever volume is 7.75 million tons set in May 2018, and the March high is 6.7 million from 2017.  U.S. corn exports in February hit 6.3 million tons (248 million bushels) according to official census data published on Wednesday.  That tops 2008’s record for the month by 17% and is the largest monthly volume since July 2018. January corn exports had missed the month’s all-time high by a handful of cargoes, and the December volume was the biggest in 13 years.  Next up is the April USDA Supply/Demand forecast tomorrow at 11:00 AM Central.  For the week ended Apr 2, ethanol production was 975,000 barrels per day (the uptick is less than expected by analysts, who had forecast production to rise by as much as 70,000 barrels per day this week); up 1% versus a week ago, up 45.1% versus a year ago.  Planting progress and ground conditions set the stage for whether, or not weather premium is warranted.  Conditions are viewed as conducive to growers staying on schedule to get their crop in ground, with many areas reporting near perfect conditions.


The soy complex was weaker overnight after a large hedge fund decided to liquidate a large long soyoil futures position on Wednesday, leading to a lower close, offering resistance to nearby soybean futures.  July oil, at 50.83, needs to close above 52.14 to re-establish the uptrend and help the complex stay supported.  May beans are down 2 to 14.06-3/4 while tracking the contract’s lateral 10 and 20-day moving averages.  Nov beans are off 4 cents to 12.66-3/4.  Malaysian palm oil prices were down 67 ringgit at 3,778 (basis June) at midsession following 3 days of gains.  Trade estimates for this morning’s USDA Weekly Export Sales are 100,000 to 400,000 tons for old crop, Zero to 200,000 tons for new crop.  Meal estimates are 100,000 to 250,000 tons for old crop and Zero to 50,000 tons for new crop.  Soyoil sales estimates are Zero to 30,000 tons.


Wheat futures traded higher overnight.  May CBOT wheat was up 6-1/2 cents to 6.22-3/4.  Nearby KC advanced 9-1/2 cents to 5.72-3/4.  MPLS was up a dime to 6.34-3/4.  Futures are starting the day on solid ground after posting modest gains on Wednesday and chart support following the March 31st USDA reports.  U.S. wheat production is forecast to be up slightly, but drought risks in the Southwest U.S. remain high.  Recent expected weather and updated winter wheat planted area increase 2021/22 U.S. wheat production by 2% to 49.1 million tons.  Winter wheat production is increased to 34.3 mil tons, as the crop slowly continues to exit from dormancy thanks to recent warm weather (albeit occasional cold snaps in March).  Trade estimates for this morning’s USDA Weekly Export Sales are 100,000 to 500,000 tons for old crop, 50,000 to 200,000 tons for new crop.  Overnight tender activity featured: Tunisia seeking 75,000 tons of optional-origin wheat, Japan bought 90,815 tons of U.S./Canadian wheat, Taiwan bought 96,645 tons of U.S. wheat, Algeria bought optional-origin wheat; and, Thailand bought 58,000 tons of optional-origin feed wheat.  Egypt chose to secure their wheat supplies from Russia/Ukraine in their latest tender for 345,000 tons.


Cattle futures are called steady to higher on follow-through from finishing higher on Wednesday.  Prices are again looking to challenge recent contract highs from Feb in April futures.  Deferred contracts finished with small gains, and June and later contracts traded to new contract highs.  Cash cattle finally started to draw some attention on Wednesday.  Light to moderate live trade took place in most areas with a full range of $118-$123, mostly $120-$121, which is an improvement of $1.50 to $5 over last week’s weighted averages.  Choice carcasses gained 3.54 to 266.31 and Select added 3.89 to 255.19.  Movement was good on 117 loads.  Carcass values are trading at a strong historical premium, but the consumer looks more than willing to pay the prices.  Estimated slaughter for Wednesday was 120,000 head.  Slightly above last week, but for the week total, slaughter this week is trailing by 13,000 head.  The cattle market is looking technically strong, fueled by a good demand tone and improving cash market.  At this time, there is no sign of a top.


Hogs are called steady to higher ahead of this morning’s USDA Weekly Export Sales.  Last week saw strong sales, setting a new marketing year high at 61,000 MT as leading buyer China stays extremely active in the pork export market, as the country deals with ASF issues.  Hogs finished with strong gains yesterday, fueled by demand optimism and an unrelenting strength in the cash market.  The lean hog index traded 0.24 higher at 100.34, supported by a tighter supply picture of hogs/ Slaughter for the week through Wednesday with an estimated 1.301 million head (fewer than last week’s 1.465 million head) supporting cash prices.  Carcasses finished higher, trading up 1.30 to 110.69, on good movement of 384 loads.



Matthew Strelow

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