TFM Sunrise Update 6-29-20


Corn futures were up 2-1/2 cents overnight on some position-squaring ahead of First Notice Day for July futures tomorrow and a lower dollar.  We’ll get plenty of USDA data early this week to set the tone for the corn market.  Weekly Export Inspections this morning will be followed by Weekly Crop Progress after the markets close and then the Quarterly Grain Stocks and Planted Acreage report tomorrow.  The market has experienced a high volume washout as crop prospects increase.  December futures, at 3.27-1/2 set new contract lows on Thursday and Friday and are technically oversold which may have led to firmness last night.  Estimates for Tuesday’s acreage projections are for 1.85 million acres lower than the March intentions, but still nearly 5.5 million higher than last year.  Managed Money will stay put on the short side until some technical resistance levels above the market are breached.  Friday’s Commitment of Traders report showed funds net short 277,479 corn contracts as of last Tuesday.  However, heading into today, they are estimated to be short 316,000.


The soybean complex was mixed overnight with beans down as much as 4-1/2 cents (Nov) at one point before getting back to even this morning, meal unchanged and soyoil weaker.  A non threatening weather forecast continues to weigh on row crops, and for beans, unfriendly Chinese import data last week helped end a month-long string of higher weekly closes in the July contract recent export announcements favor new crop supplies.  The Midwest will see showers and thunderstorms with moderate rainfall to the eastern region through Wednesday of this week; activity then looks to taper off just a few spotty showers/storms for Thursday.  The 6-10 day forecast sees ridging to build in and bring limited rains to much of the region.  The 11-16 day outlook sees some weak ridging to bring average to below average rainfall to the Midwest with temps to run above average.  Traders are estimating soybean acres to increase slightly the upcoming report from March’s planting intention numbers.  Acres are estimated to come in at 84.83 million acres up 1.32 million from March’s intentions and 8.73 million more acres than last year.   Managed Money is estimated to be net long 32,000 soybeans; net short 50,000 lots of soymeal, and; short 11,000 soyoil.


Wheat futures were mixed overnight.  Chicago contracts were up 3, KC and MPLS unchanged.  Wheat acreage tomorrow is expected to come in at 44.72 million, 70,000 fewer than the March figure and 430,000 less than last year.  Wheat stocks are estimated at 987 million bushels, down 93 million from a year ago.  Bottom line is that global wheat supplies remain heavy and prices weak, though low protein quality and a lower dollar overnight is helping buoy the complex for today.  Managed Money was short 48,213 Chicago contracts and 37,292 KC last Tuesday, according to the Commitment of Traders report.  Today, they’re likely closer to being short 61,000 in Chicago SRW contracts.


Live cattle futures are called mixed after putting in a soft landing to last week’s trade.  Technical traders see pennants forming on the daily charts that will give way to a breakout to the upside, or downside, depending on how cash trades, or headlines are written.  Cash and futures have significantly narrowed their price gap after seeing futures trade at a deep discount.  Demand will also be the key for cattle prices in the short term as the industry works through large backed up slaughter supplies.


Lean hog futures are called lower after facing an avalanche of selling pressure to end the week last week, forging new contract lows in the front three months.  The monthly Hog and Pig report reported large supplies of pork for weeks to come and sent prices spiraling lower.  Market ready pigs over 180 pounds were the most watched number and were up 13% from prior year.  The next weight category was up 12% assuring a steady and abundant supply of pigs in future weeks.  Look for bargain buying to surface at some point and give the market a choppy, two-sided look.


Matthew Strelow

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