TFM Sunrise Update 8-20-21


Corn futures were firm overnight.  Dec corn is up 3 cents to 5.58, though down about 20 cents from last Friday’s settlement.  Crude oil was trading 2-3% lower, and the U.S. dollar is pushing through the highs for the year.  That combination is not supportive of commodity prices in general, and will need to be watched closely.  Dec is back near 5.50 after trading a range from 5.46-1/2 to 5.76 this week. The contract closed below the 100-day moving average yesterday for the first time since July 9.  Prior to July 9 Dec traded in a wide range between 5.20 and 5.80.  Pro-Farmer wrapped up their four day crop tour yesterday.  The trade will digest the final results today as they become available.  We’ll need to see if the U.S. producer will increase sales at current levels.  A lack of new export buying especially by China is offering resistance to futures.


The soybean complex is firm this morning.  Nov beans, up 8 cents to 13.28 are bouncing while struggling to stay above trendline support on the continuous charts.  For the week, the contract is down 37 cents while experiencing a weakness in the trend that could reinforce a move lower if support gives way.  A downside target for Nov beans is 12.89.  The next area of resistance is up near 13.43.  Rain forecast for the Dakotas into the weekend have spread to much of MN, IA and Northern NE.  This would greatly benefit crop conditions heading into the end of the month.  The first week in September should return to drier and warmer weather.  Meanwhile, outside market volatility will likely play a role in price action for the complex.  Overnight, Chinese Jan bean futures were down 131 yuan ; Soymeal down 44; Soyoil down 108; Palm oil down 124;  Malaysian palm oil prices overnight were up 24 ringgit (+0.57%) at 4262 first time in four days amid gains in soybean oil prices and an improving outlook for exports from the second-biggest grower Malaysia.


Wheat futures were choppy overnight, consolidating from a week-long pullback in prices.  Dec Chicago futures are up 2-1/4 cents to 7.45 and down about 30 cents for the week.  Dec KC wheat is unchanged at 7.28-1/4 and down 27 this week.  Dec MPLS wheat is up 6 to 9.10-1/2, down 29 cents for the week.  A surge to new contract highs in the U.S. dollar index should keep the wheat market from advancing into the weekend.  In addition, U.S. July food prices were up 31% raising concern about higher food inflation and lower food demand.  There is already talk that increase cases of the virus variant in the U.S. may slow traffic into restaurants.  Many large U.S. cities are back to mask mandates.  An increase violence in major cities could also slow consumer demand.  Elsewhere, Russia and French prices continue to trend higher vs U.S.  NWS 30 day weather outlooks call for above normal temps in the U.S. PNW and North Plains.


Cattle futures are called mixed for this morning.  Live cattle futures finished lower on Thursday, as market participants react to outside market forces and square positions ahead of this afternoon’s Cattle on Feed report.  The market is anticipating on-feed supplies at 98.2%; placements at 92.9% and marketings at 96.4%.  The retail market is still the strength in the cattle market.  Midday carcass values pushed to new highs for the year, gaining .98 and held firm into the closed finishing 1.55 higher to 341.63, and Select was 6.61 higher to 316.41.  The load count was light at 75 loads. The market may be concerned about hitting a retail peak at $340+ Choice.  The cost of U.S. beef was reflected in weekly export sales, which were disappointing at just 11,100 MT in the week ending August 12, with shipments at 19,700 MT.  Cash has been less than impressive again this week.  A light trade has been reported in parts of the South today, at $122, $1 higher than last week’s weighted averages.  Some asking prices remain firm around $123 to $124 in the South, and $202 plus in the North, but most trade is likely wrapped up for the week.


Hogs are called mixed.  Disappointing export numbers ushered in demand concerns for the market, as prices finished with triple digit losses on Thursday.  U.S. pork export sales were disappointing in the week ending August 12 at 20,000 MT, with shipments at 28,700 MT. China bought just 600 MT, while taking shipment of 4,500 MT.  The lack of buying from China is disappointing to the market, which is counting on that demand pace.  Domestically, the cash market was quiet, and disappointing, keeping pressure on the futures.  The lean hog index traded lower on Thursday, losing .47 to 109.17.  The index is still holding a large premium over the October contract, which should be supportive in the longer term, but it is being ignored at the moment.  Pork carcass cutout values surged higher at midday, as some demand may be returning, especially given the price of retail beef.  At midday, pork carcasses were 7.55 higher, but the trend eased as pork carcasses were closed only .79 higher to 121.40.  Movement was moderate at 283 loads.  Technically, hog futures are trying to build an uptrend, and despite the weakness yesterday, prices dropped to fill the price gap from last Friday.  This may help firm up the charts and work prices higher, supported by the strong discount of the cash market to the futures.


Matthew Strelow

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

back to TFM Market Updates