TFM Sunrise Update 7-9-21


Corn futures are weaker this morning with contracts down 2 to 3 cents in narrow 5 cent trading ranges.  Sept corn is at 5.34 and down 58 cents for the week after gapping lower after the Fourth of July weekend.  Dec is trading at 5.20 while losing 80 cents this week.  Trade estimates for this morning’s USDA Weekly Export Sales are 100,000 to 600,000 tons for 2021-22 corn.  Once released, focus will return to position-squaring ahead of the next USDA monthly Supply/Demand report including yield forecasts.  This report will be released Monday at 11 AM Central.  China is likely to take a break from buying large amounts of U.S. corn after record purchases this year because the domestic harvest is approaching and local prices have slumped to the cheapest since late 2020.  The world’s largest importer has already bought more than 10.5 million tons of U.S. corn for the 2021-22 marketing year, and over 23 million tons for the current season, USDA data shows.  Basis bids for corn and soybeans shipped by barge to the U.S. Gulf Coast were mostly steady on Thursday amid light to moderate demand and slow farmer sales as futures prices weakened.


Soybean futures are mixed this morning with Aug beans up a nickel to 13.70-1/4 and Nov steady at 13.19-1/2.  After a rough, short week of trading, August is down nearly 60 cents from last Friday’s settlement, and Nov is off about 75 cents.  Prices took a hit this week, but have spent the week consolidating while respecting each of the previous days’ trading ranges.  This is creating an environment of an eventual breakout from pennants forming on the daily bean charts.  Chinese September bean futures were up 45 yuan ; Soymeal up 17; Soyoil up 68;  Malaysian palm oil prices overnight were up 116 ringgit (+3.08%) at 3885 rebounding from three days of losses, as a weaker ringgit raised the appeal of the tropical oil in Malaysia while prices for the commodity traded in China headed for a third weekly advance.  Trade estimates for this morning’s USDA Weekly Export Sales are 200,000 to 500,000 tons for 2021-22 beans.  The ag group Abiove did increase their estimate for Brazilian soy exports to a record 86.7 million metric tons.  A summary of global weather is as follows:  Periods of rain are seen benefiting developing to reproductive soybeans in most areas of the Midwest over the next week, but some areas will miss out, particularly in the drier northwest.  Favorable conditions are seen in the Delta for developing to reproductive soybeans.   There are scattered showers favoring developing soybeans in China; And, scattered showers are falling in India as the monsoon advances through the area.


Winter wheat futures were mostly unchanged overnight, Spring wheat, up 4 to 5 cents.  Sept Chicago wheat, down 2 cents to 6.16 made a new low for the move overnight to 6.13-1/4 and is down 40 cents for the week while trading below the contract’s 200-day moving average at 6.38.  A weekly close below this level would look bearish on the continuous charts.  Sept KC wheat is up 1-1/2 cents to 5.89-1/2, off about 30 cents for on the week.  Further harvest progress may be stalled due to a wet forecast.  Sept MPLS is up 4 to 8.09.  The spring wheat contract lost 30 cents this week.  Trade estimates for this morning’s USDA Weekly Export Sales are 200,000 to  450,000 tons for 2021-22 wheat.


Cattle futures are called steady to lower.  The complex traded lower on modest selling pressure as prices slumped through support levels, opening the door to additional downside momentum.  Live cattle contracts took an additional technical hit closing below the 100-day moving average, and lowest close since June 11.  The cash cattle market has been slow to develop this week.  Packers seem to have a large supply of contracted cattle, so the spot market is disappointing.  Prices are running mostly steady again this week, ranging from $119 to $125, depending on the region of the country.  Retail values are the biggest concern in the market as the market moves into a lower potential demand window until Labor Day buying.  Choice carcasses are trending lower losing 2.93 to 281.97 and Select fell 2.02 to 260.06.  The  load count was light at 130 loads.  Despite a weak corn market, technical selling pressures the feeder cattle market.  Prices have dropped to a level which could hold, but the influence of other markets may keep the pressure in this market.


Hog futures are called mixed after trading firm on Thursday when prices consolidated in relatively tight trading ranges.  July hogs rallied to match to the lean hog index with expiration a week away (7/15). The index traded an additional .68 lower to 110.13.  Pork carcasses softened off midday strength, but still traded higher gaining 1.15 to 116.89.  The load count was light to moderate at 320 loads.  Pork demand is a concern in this seasonal window.  Weekly pork export sales will be announced this morning, and the market will be watching China’s activity in the report.  Technically, the August hog contract is possibly trying to build a bearish pennant formation, which if realized, could lead to another run to the downside and more long liquidation.


Matthew Strelow

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