TFM Sunrise Update 8-24-20


Corn futures were firm overnight, tacking on 2 cents amid a lower dollar and yield results from the Pro Farmer crop tour yield.  Final yield came in at 177.5 which was below the August USDA forecast.  Projected production totaled 14.820 billion bu, 500 million under USDA’s August forecast.  Both soy and corn forecasts were below the latest estimates, though the corn crop would be the second-largest ever and soy would be the third-largest if Pro Farmer’s projections are realized.  Dec corn, at 3.42-3/4 is still consolidating above the 3.40 level with support from losses to the Iowa crop.  A move beyond 3.46 is likely to be met with more farmer selling.  Seasonally, the corn market experiences weakness into Sept and heading into First Notice Day for the September grain contracts at the end of this month.   Weekly Export Inspections are on tap for today followed by Weekly Crop Ratings this afternoon.  Managed Money is net short an estimated 110,000 corn contracts to begin the week.


Soybean futures gained 3 to 4 cents overnight.  The Pro Farmer tour tagged U.S. soybeans with 52.2 bushels to the acre, down from the USDA projection of 53.3, and forecast total crop at 4.362 billion bushels.  Dry weather across the corn belt could further cut into yields, bringing concern for even tighter supply.  The 6 to 10 day forecast for the Midwest has both models indicating fairly healthy rains for most of the region with totals of .75 to 1.25 inches, or more in some areas, especially in the west.  Temperatures are forecast to run above average for this week and then lower into next week.  Nov beans are clinging to bullish climate with the contract trading above 9.00 to 9.09 as daily doses of export announcements feed the market bulls.  Heading into today, Managed Money is estimated to be net long 101,000 soybeans; net long 5,000 lots of soymeal, and; long 56,000 soyoil.


Wheat futures were mostly flat overnight, underpinned by a pullback in the dollar and weather concerns abroad.  Harsh weather in Argentina and a freezing temperature forecast for Australia brought short covering into the wheat market on Friday, improving the technical picture that could usher in additional money flow and short covering today.  China was also rumored to be looking to U.S hard red winter wheat for purchase.  Managed Money is estimated to be net long 2,000 contracts of SRW wheat.  .


Live cattle futures are called lower. Charts finished weak on Friday, and with cattle on Feed numbers above expectations could lead to long liquidation.  Total cattle on Feed at 102% and placements at 111% were above expectations and will pressure the market.  Total cattle on feed for Aug 1 this year was a new record at 11.284 million head.  One would expect a pullback today which would disrupt a strong technical trend in Oct lives.


Lean hog futures are called steady to higher.  However, the market is moving into over-bought territory, and potential weakness in Live cattle today may weigh on hog prices if realized.  Hog futures finished higher last week for the 3rd consecutive week, fueled by technical buying and retail carcass strength.  Prices trading at their highest levels since May, may be poised for follow through buying to start the week.


Matthew Strelow

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