TFM Sunrise Update 5-19-21


Corn futures were rangebound overnight, albeit at lower levels than earlier this month as this year’s crop gets off to a good start.  Dec futures traded an 8-1/2 cent range between 5.45-3/4 and 5.38-1/4 while settling in below 10 and 20-day moving averages and above 50-day support near 5.20.  Widespread moisture across the country is likely to lean on prices and prevent rally attempts mid-week.  Nearby July corn is fractionally higher, supported by tight supply scenarios and strong basis.  The dollar is attempting a recovery from yesterday’s down day.  Crude is down 1.17/bbl this morning, and stock index futures are down 200 points.  Weekly Ethanol Stats will be out mid-morning, Exports tomorrow.


Soybeans traded lower overnight.  Nov beans had an 11-3/4 cent range between 13.89 and 14.00-3/4 and are down 9 cents 13.90-1/2 this morning.  July is off 11-3/4 cents to 15.62-1/2.  Chinese Ag futures (SEP 21) Soybeans were down 8 yuan ; Soymeal up 21; Soyoil up 6; Palm oil down 32; Corn down 10;  Malaysian palm oil prices overnight were down 156 ringgit (-3.50%) at 4301 tracking losses in soy markets as concerns of tight vegetable oil supplies began to ease and as traders waited for export tax decisions from top growers Indonesia and Malaysia.  Around the globe, dryness in Argentina favors harvest.  Soil moisture in the southern U.S. Midwest is adequate to surplus but northern areas are in need of moisture.  Periods of showers are forecast to move through the region over the next week, along with above normal temperatures, benefiting developing soybeans.  Some showers are causing planting delays in China.


Wheat futures are softer this morning with CBOT and KC July making new multi-week lows, down 7 cents to 6.91 and 6.40-3/4, respectively.  The active July MPLS contract is down 4-1/2 to 7.09-1/2.  Periods of showers in the Central and Southern Plains will work through the region over the next week, benefiting developing to reproductive winter wheat.  Showers will increase across the Northern Plains this week, benefiting germination and growth.  However, temperatures are likely to fall below normal later this week into the next, which would limit growth.  Dryness and drought is cause for concern in the Canadian Prairies as spring wheat planting continues.  Showers look better later this week and weekend and could be enough to reduce drought.  Temperatures will go below normal though and some accumulating snow will be possible.


Cattle futures are called steady to higher on follow-through from good buying strength on Tuesday after receiving news that Argentina was going to suspend beef export sales for the next 30 days in order to curb food inflation in the South American country.  Argentina is the world 5th largest beef exporter, and represents approximately 7 to 8% of the world total.  Beef carcass values are still trending higher, as Choice carcasses were 3.72 higher at the close, holding midday strength to 323.34, and Select gained 2.16 to 299.05. Moderate movement of 114 loads.  The strong retail values should lead to some higher cash bids.  Cash is still undeveloped for the week, but some light $120 trade was noted in TX, up $1 over last week.  Feeders are struggling to find traction despite the strong live cattle market. Some recovery in the grain markets kept feeders in check, as charts are still cautious.


Hog calls are for steady to higher.  Buyers returned to the hog markets as futures closed with strong triple digit gains across the board.  Technically, June hogs held support and turned higher, maintaining the longer-term uptrend.  The 10-day moving average is still over the top of the contract which could be the next key barrier.  A break above that level could open the door for a retest of the recent highs.  The lean hog index gained .49 to 111.42, but the cash hog market stayed soft.  The cash market may be deteriorating in the countryside, but the strong demand should help support the cash market overall.  Pork cutout values were 1.70 higher to 118.27 on moderate movement at midday, but prices softened and turned lower, dropping .51 to 116.06 on the close. The futures market will likely be tied to the retail cutout market and the demand.  Overall, the price action for the rest of the week will be key for price direction going forward.  The top for the market is still a moving target.



Matthew Strelow

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