TFM Sunrise Update 5-28-21

The CME and Total Farm Marketing offices will be closed Monday, May 31, 2021, in observance of Memorial Day


Corn futures were mixed overnight after a strong showing on Thursday.  July is up 2-1/2 cents to 6.67 and Dec is down 2 cents to 5.58.  The market is up about a dime for the week and showing signs of completing a downward correction from contract highs on the charts.  U.S. summer weather will be key to prices.  USDA will issue its first estimate of the U.S. 2021 corn crop rating next week.  The Good-to-excellent rating could be over 70%.  In 11 of the last 15 years that the first corn crop rating was over 70%, the final yield was at or above USDA’s May est.  Extreme summer weather dropped the
other years below the USDA May yield.  We’ll get a three-day Memorial holiday weekend for the trade to digest weekend and beyond weather forecasts.  In the Midwest, isolated showers are in the fold for the western portion today and the north tomorrow and Sunday into Monday.  Temperatures look to be near – to below normal during that time.  In the east: scattered showers today and tomorrow, then mostly dry Sunday and Monday.  The 6 to 10 day outlook holds scattered showers Tuesday through Thursday. Mostly dry Friday-Saturday. Temperatures near to below normal Tuesday, near to above normal Wednesday through Saturday.


Soybean futures saw follow-through to the upside overnight after a steep ascent on Thursday fueled by a large ‘buy’ order for the July contract and talk that China will soon start buying U.S. beans.  In addition, the market may have reached downside technical objectives triggering new buying interest.   Moving forward, besides weather, the key to price action is in the hands of China’s involvement in demand for new crop.  July beans, up 2 cents this morning at 15.39 got back up near the contract’s 20-day moving average that has leveled off at 15.57-1/2 before prices tapered off to the 10-day MA.  Nov beans are fractionally higher to 13.78-1/2 with an overnight range in from 13.92-1/2 to 13.74-3/4.  For the week, the new crop contract is up 18 cents.  Chinese September soy futures were up 23 yuan ; Soymeal up 43; Soyoil up 76; Palm oil up 66; Corn up 15.  Malaysian palm oil prices overnight were up 86 ringgit (+2.20%) at 4002 on stronger soybean oil prices in Chicago and concerns about supplies due to coronavirus-related restrictions in some areas of second-biggest grower Malaysia.  Newswire headlines report China’s efforts to rein in surging commodities prices are likely to be in vain as it’s lost the ability to boss the market amid the developed-nation recovery from the pandemic, according to Goldman Sachs Group Inc.


Winter wheat futures are down 3 to 5 cents this morning, Spring wheat up 2 to 3.  Prices bounced on Thursday from an arguably oversold condition.  Managed funds had turned net short Chicago wheat futures during the recent price retreat.  Wheat continues to take cues from the corn market and there remains concern that the U.S. North Plains, PNW and Canada prairie weather will turn dry. This could lower supply and be long-term supportive for wheat prices.  EU old crop wheat prices are firm on tight supply while new crop prices trend lower on improved weather.  July CBOT wheat is down 4 cents this morning to 6.72-1/4 and despite a lot of price movement, is about even for the week.  July KC is down 4 to 6.22-1/4, also within a couple cents from last Friday’s settlement price of 6.24.  Both contracts have returned to their respective 50-day moving average areas on the charts.  July MPLS is up 2-1/2 cents to 7.19-3/4, up 19 cents for the week.


Cattle futures’ calls are mixed for this morning.  Live cattle futures were looking for direction in Thursday’s session are prices stayed choppy, but finished mixed to slightly higher.  The cattle market failed to get much traction despite a strong week of export sales and modest retail strength.  USDA weekly export sales were up 19% from last week at 27,900 mt.  This total was also up 45% from the 4-week average. The stronger sale may be reflective of Argentina removing itself from the export market early last week.  China was the top buyer of U.S. beef at 9,000 mt.  Choice carcasses gained .49 to 329.98, and Select was up .05 to 304.10.  the load count was light to moderate at 102 loads.  Feeder cattle futures face selling pressure amid a limit higher move in corn.  The feeder charts look technically challenged, and if corn prices maintain their new found strength, feeders will be susceptible to additional selling.


Hog calls are steady to higher.  With Thursday’s gains, the June contact posted another new contract high close.  USDA export sales for last week were up noticeably from last week at 45,900 mt. This total was up 56% over the 4-week average.  Mexico and China were the top buyers of pork last week, as the export demand has stayed robust.  Weekly shipments were also strong at 47,800 mt.  Pork carcasses were2.39 higher to 126.37 on light to moderate demand of 310 loads.  The lean hog index stays strong gaining another .30 to 112.50.  Overall, the fundamentals are still here to push the hog market higher as the market searches for a top despite a seasonal time frame for weakness.


Matthew Strelow

Sign up to get daily TFM Market Updates straight to your email!

back to TFM Market Updates