TFM Sunrise Update 8-6-20


Corn futures traded narrowly mixed overnight after recovering somewhat yesterday from Tuesdays break lower.  The dollar is pressing into new lows again, and may be helping corn price action  experience more of a consolidation phase amid light profit taking after a surge in open interest Tuesday sparked new selling.  With expectations for yield to increase, and demand concerns still in front of the market, corn prices are likely still searching for a seasonal low.  Trade estimates for this morning’s USDA Weekly Export Sales range between 2.0 and 2.6 mil tons for new crop, 100,000 to 600,000 tons for old crop.  In overnight tender activity, a S. Korean feed group bought 63,000 tons of optional-origin corn, another group passed on 60,000 tons.  Meanwhile, scattered rains are appearing on the radar over Iowa this morning.  Growers fear that the region could miss out on much needed moisture.  U.S. crop conditions, overall are doing well, however, the eastern and northern areas of IA have not seen rain for much of the growing season leading to declining crop conditions for the state.


Soybean futures were down 2 to 3 cents overnight on follow-through from weak performances on Tuesday and again yesterday.  Selling pressure is the trend-setter mid-week, but prices are holding longer-term moving average support near the bottom of the trading ranges.  Expectations are for increased yield potential for the U.S. soybean crop, and despite the strong demand tone, we’ll likely see an increase in carryout projections in the upcoming USDA report.  Combined old crop and new crop Weekly Export Sales for soybeans are expected to come in this morning between 800,000 and 2.3 million metric tons, meal sales between 300,000 and 750,000 tons; And, soyoil sales between 5,000 and 35,000 tons.


Wheat futures are lower this morning despite new lows in the dollar that would otherwise result in higher exportable commodity prices.  Egypt’s latest tender was transacted with the lowest offers coming from Russia and Ukraine.  In other tenders, Pakistan bought 60,000 tons of optional-origin wheat, S. Korea bought 57,400 tons of U.S. wheat, Japan bought 130,295 tons of U.S./Canadian/Australian wheat in a routine tender; and, Thailand passed on 192,600 tons of optional-origin feed wheat.  Weekly Export Sales are expected to be 200,000 to 800,000 tons this morning.  Winter wheat contracts shed a nickel overnight in Chicago, 3 to 4 in KC.  Mpls wheat was flat/weak.  Renewed forecasts for a big Russian wheat crop coupled with demand concerns for U.S. wheat are pressuring wheat prices.  Wheat charts broke resistance on Tuesday, and are opening the door for additional long liquidation and short selling in a seasonally weak window for wheat prices.


Live cattle futures are called mixed.   Cash trade is still building this week with $99-100 trade, $2-3 higher than last week.  The south led the way this week reaching $100 on several thousand cattle in Kansas Tuesday.  More cattle sold in the south on the fed cattle exchange yesterday at that price.  Cattle owners in the north were asking up to $105/cwt for offerings this week but no trade has been reported.  Seasonally, October cattle trade lower from the first-notice-day for the August cattle contract, which occurs on August 10th.  Technical strength and growing open interest show money flow moving into the cattle markets, but prices are consolidating this week, and are holding support at the 200-Day moving average under the Oct contract.


Lean hog futures are called steady to lower.  August hog futures are challenged, and may be looking push to the recent contract low.  And, burdensome supplies of slaughter hogs keep cash markets in check, pressuring prices.  The December contract is working on a potential bullish weekly reversal.  Deferred contracts are choppy, but are finding support from a surge in retail prices, especially the ham primal cut, keeping some long-term optimism in the hog market.


Matthew Strelow

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