TFM Sunrise Update 7-29-20


Corn futures were unchanged overnight while garnering modest support from new lows in the dollar.  A 3% jump in crop ratings to 72% G/E pushed December corn to its lowest daily close yesterday since making a contract low at 3.22 on June 26.  The contract is struggling to stay at the 3.30 support level.  Managed Money is estimated to be net short 147,000 corn contracts after selling 17,000 yesterday.  Overall, weather is not a concern and the majority of the U.S. corn crop is in good shape.  The 6 to 10 day forecast for the Midwest sees fairly limited rains for most of the region; some rains are seen for most of Indiana and Ohio by early next week; temps will below average over the next 10 days.  Last evening’s GFS model run was wetter in Iowa Aug. 5 – 7; some of the increase in rainfall was likely needed due to the position of the ridge of high pressure.  The 11 to 16 day forecast for the Midwest turned a bit mixed with the European model showing a bit below average rainfall with temps to run below average; the GFS model has close to average precip and temps.  Weekly Ethanol Stats will be out today, Exports tomorrow.


Soybean futures were narrowly mixed overnight, trading a four cent range on both sides of Tuesday’s settlement prices.  The 3% gain in crop ratings helped push soybean double-digits lower on Tuesday as the crop steadily advances.  Prices did hold support, and are still in a technical uptrend.  Demand has been strong, but the daily string of soybean export sales ended at 10 days.  The U.S. has the cheapest soybean supply in the world and that should keep demand active for U.S. soybeans.   Managed Money is estimated net long 80,000 soybeans; net short 24,000 lots of soymeal, and; long 32,000 soyoil.


Wheat futures were higher overnight supported by another round of new lows in the dollar.  Winter wheat contracts were up 6 to 7 cents and spring wheat was up a nickel.  Large global supplies and the failure of row crops to gain ground are still acting as a drag on wheat rallies and the technical picture is mixed, looking for overall direction.  Managed Money is estimated to be net net short 11,000 SRW wheat contracts.  In tender activity, Egypt bought 470,000 tons (350,000t Russian, 120,000t Ukraine) wheat.


Live cattle futures are called steady to firmer following a recovery bounce on Tuesday after selling pressure on Monday.  Cash trade is still undeveloped this week, but bids were $95, $1 lower than last week.  Six-state fed cattle price was trending higher at $98.  Feeder cattle markets could stay supportive of the fed cattle market if corn prices stay weak.


Lean hog futures are called steady to weaker with  August hog futures holding a premium to the lean hog index that will keep pressure on prices.  Strength in retail values stay longer-term supportive, as carcasses touched $79.00 on midday trade.  This could keep packers active for cash hogs, but large supplies of slaughter hogs limit rallies.


Matthew Strelow

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

back to TFM Market Updates