TFM Sunrise Update 9-10-2020


Corn futures were mostly steady overnight and look to remain that way ahead of tomorrow’s USDA report.  The average trade estimate has the USDA lowering corn production by 328 million bushels from the 15.278 billion August estimate and a yield of 178.2 bpa, down from 181.8.  Weekly Export Sales will also be out tomorrow as well as FSA acreage numbers.  For now, the corn market is trading between the 200 and 10-day moving averages and 40 cents above contract lows, and Managed Money is seen net long 24,000 corn contracts.  Weekly Ethanol Stats will be out today.  The 200-day moving average that comes in at 361-1/2 on the Dec contract  which is proving to be a strong resistance level.  The next level of support is the bottom of the gap left last month at 345 December.  The demand picture is strong and concerns about total production supports the market.  Cold temperatures overnight and possible frost damage will also help keep premium in the market and prices at multi-month highs.  Outside markets are mixed as the dollar retreats from its week-long technical bounce and crude softens its stance after yesterday’s tech bounce.


Soybean futures are down 2 cents this morning.  A second consecutive day of export demand and cold temperatures across the northern and western Plains underpin the soybean market.  The demand picture stays strong, and concerns regarding yield keep buying support in a strong up-trending market.  Yesterday, the USDA reported another 13.6 million bushels of new crop sales to China and unknown.  Friday’s USDA report could bring some price consolidation or long liquidation after this rally.  The last time beans reacted favorably to a bearish August report, prices rallied until late August, then traded sideways for the first two weeks of September only to fall lower after the September USDA report.  The 6-10 day forecast for the Midwest looks to be fairly quiet.  Any rainfall would be light and favor the eastern Midwest.  Temperatures are seen below average in the northwest half of the Midwest and above average in the southeast.


Winter wheat futures were up 3 to 5 cents overnight and inside yesterday’s trading ranges after holding 200-day moving average support.  Rainfall across the southern Plains is building a good base for winter wheat crop planting adding up to the potential for a good start to next year’s crop, thus limiting market rallies.  MPLS spring wheat was firm overnight.  Look for prices to consolidate into Friday’s USDA report with ideas that the world wheat crop is up to 2 million metric tons from the USDA’s August estimate.  In tender Activity, Saudi Arabia seeks 715,000 tons of option-origin wheat, Tunisia seeks 52,000 ton of opt-origin milling wheat; and, Pakistan bought 60,000 tons of Opt-origin wheat.


Live cattle futures are called steady to lower. A weaker cash market tone put pressure on the cattle markets on Wednesday as early trade came together at $101 this week, $1-$2 under last week and keeping the trend lower.  In addition, softening retail values bring demand concerns into the cattle market.


Lean hog futures are called mixed to higher.  October hog futures traded to their highest level since April on Wednesday after trading above support at the 60.00 level and building strength from there.  This provides a foothold for bullish traders in this uptrend.  October, at 61.275 is now targeting the high from April 28 at 62.70.   Demand strength supports the market as retail values have been trending higher recently. The hog market is moving into an overbought condition and could be suspect to long liquidation if fundamental news changes.


Matthew Strelow

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