TFM Sunrise Update 5-21-21


Corn prices eased overnight with July down 8 to 10 cents to settle back into the mid-point of this week’s nearly 40 cent trading range between 6.71-1/4 and 6.33.  December’s trading range for the week spanned 35 cents between 5.55-3/4 and 50-day moving average support at 5.20-3/4.  Stochastics (trend indicator) are weaker and reinforce a move lower if support levels are broken.  The dollar is weaker this morning, but up for the week.  Crude is up 1.00 per barrel, and stock index futures are 100 points higher this morning.


Nearby soybean futures made new lows for the month overnight.  July fell as much as 18-1/4 cents to 15.15.  Nov got to 13.55, down 12-3/4 cents as bearish weather and sluggish export news presses prices to the low side of this week’s trading ranges.  Bean oil has stabilized after tumbling from contract highs while forming a bearish key reversal earlier in the week.  The strong reversal may drag the soybean complex down.  In addition, widely scattered, but light rainfall has been registered throughout the week for the newly planted row crops.  Looking ahead, temps look to warm up in the north which will be welcomed by most growers.


Wheat futures were down slightly overnight.  July contracts, across the board are 3 to 4 cents lower as prices slip due to weather and weakness in neighboring row crops.  Kansas 2021 wheat yields are shaping up to be the highest in the 20 year history of the wheat quality tour, sparking aggressive selling in the futures market.  The HRW forecast is coming in at 57.9 BPA.  Overnight, July KC wheat slipped to a fresh one-month low of 6.18.  July CBOT wheat, too, fell to a one-month low of 6.68-1/2 while finding support at the contract’s 50-day moving average.  The next downside target lies around 6.62.  July MPLS wheat, at 6.92-1/4, stayed range-bound above that contract’s 50-day MA support.


Cattle futures are called mixed ahead of this afternoon’s USDA Cattle On Feed report.  Prices were narrowly mixed yesterday, underpinned by supportive export data.  USDA reported weekly export sales of beef, which total 56,900mt of new sales for the week ending May 13th, and shipments of 53,100MT, were both marketing year highs.  The Netherlands (reportedly) purchased and took delivery of 33,700 MT which was the anomaly.  However, later, USDA revised the export sales at the end of the day, and the Netherlands purchase was inaccurate and will be adjusted in next week’s report.  Expectations for COF numbers are; total cattle on feed at 103.8% of last year, Placements at 121.3% of last year, and Marketings at 133.2% of last year.  The numbers are very skewed due to the COVID issues last year, so the report will need to be compared back to 2019.  Expectations are for total cattle on feed to be near 11.626 million head,  this will be down around 300,000 head from 2019.  The cash market is quiet, with a few more groups getting put together.  The trend still has stayed relative steady with last week, and disappointing to the futures market.   Boxed beef prices stayed strong, with Choice carcasses gaining .80 at the close to 324.18, and Select was 1.92 higher to 301.61.  Demand was light at 70 loads.


Hog calls are higher after finishing higher with good buying strength on Thursday as prices pushed through over head resistance and seemed poised to re-challenge recent contract highs.  Technically, front-month futures pushed above the 10-day moving average, opening the door to the upside, technically.  The close on the end of the week today will be very key into next week for price direction.  Weekly export sales were improved over last week, but relatively steady with the 4-week average at 19,000 MT, but shipments were supportive at 34,600 MT.  China took shipment of 11,100 MT, but purchase 3,100MT of new sales last week.  Retail carcass value maintains its support for the market, gaining 1.21 at the close to 119.22 on moderate demand of 291 loads.  The strong retail close should support prices on the open on today.


Matthew Strelow

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