TFM Sunrise Update 4-9-20

The CME and Total Farm Marketing offices will be closed Friday, April 10, 2020 in observance of Good Friday


Corn futures were up 1 to 2 cents overnight ahead of this morning’s USDA Weekly Export Sales and later on, the USDA Monthly Supply and Demand report.  Dec corn remains settled in near the 3.50 price area and may see some position-squaring prior to the USDA  report due out at 11:00 AM CT.  The markets will then close at their regular time and not reopen until Sunday night as trade takes a break on Friday in observance of Good Friday.  Expectations are for the 2019/20 corn carryover to rise to 2.002 billion bushels from 1.892 billion bushels in March.  Export demand has improved, but the report is expected to reflect some of the usage destruction from the weak ethanol market and lack of ethanol production.  Trade estimates for Weekly Export Sales are 700,000 to 1.20 mil tons for 2019-20 marketing year corn; 500,000 to 700,000 tons for 2020-21.


Soybean futures were up 3 to 5 cents and are up about a dime for the week in the November contract.  Few changes are expected in today’s USDA Monthly update.  The  2019-20 ending stocks are expected to rise 5 million bushels to 430 mil bu from the March number.  Adjustments to demand due to the slower than anticipated export demand are the wild card in the report.  Trade estimates for Weekly Export Sales are 400,000 to 900,000 tons for 2019-20 marketing year beans; 300,000 to 500,000 tons for 2020-21.


Wheat futures were mostly unchanged overnight.  The April USDA WASDE is expected to show little change from March projections.  Cold temperatures forecast across U.S. wheat country offer support regarding possible freeze or frost damage.  Gains may be limited, though, due to the winter wheat crop’s strong good-to-excellent ratings and wheat’s ability to survive.  Trade estimates for Weekly Export Sales are 50,000 to 200,000 tons for the 2019-20 marketing year; 150,000 to 350,000 tons for 2020-21.


Live cattle futures are called steady to higher after another round of strong closes on Wednesday.  A limit higher close in the April cattle contract keeps expanded limits alive in Live cattle markets again today.   The futures market is trading at a discount to cash prices, and is undervalued, but a trend of weaker retail values may limit gains on deferred contracts.  In the country, cattle owners are feeling the pinch as the nation’s beef plants reduce slaughter volumes.  A large offering of cattle on the fed cattle exchange Wednesday went mostly unsold but a few pens did sell at $105/cwt live, well below last week.


Lean hog futures are called mixed to lower as downward price discovery happens while the market seeks a low enough price level to help alleviate the back up of meat caused by the pandemic.  Poor retail values and cash markets are weighing on hog futures.  However, the discount of April futures to the Lean Hog Index will keep support in the front month.  The contract tried to fill the gap from April 2 yesterday, but fell short.  Weekly export sales and shipments will be closely watched as an outlet for U.S. pork production.


Carol Tillmann

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