TFM Sunrise Update 9-14-21


Corn futures were up a penny overnight with Dec at 5.14-1/4.  With Stocks-to-Use now at 9.5%, up from 8.5% last month, prices are facing more upside resistance into the harvest time-frame.  Meanwhile, condition ratings for the U.S. corn crop declined 1% to 58% Good-to-Excellent during the last week while the corn harvest got under way in the core Midwest production belt, according to USDA.   Harvest was 4% complete, compared with the five-year average of 5% for this time of year.  By state, corn was 1% harvested in Illinois, the No. 2 U.S. producer of the feed grain, but harvest had not yet begun measurably in Iowa, the top corn-growing state.  Corn dented is 87% vs 74% last week, and 88% a year ago.  Corn mature is 37% vs 21% last week, and 39% a year ago.  Technically, the bullish reversal posted in Friday’s session should help keep a bid under prices for today.


Soybean futures were firm overnight.  Nov beans are up 4-1/2 cents to 12.89-1/4, and have little reason to break out of their sideways to lower consolidation pattern today with buyers and sellers neutral in their conviction to move the market one way, or the other.  The USDA rated 57% of the U.S. soybean crop good-to-excellent, unchanged from the previous week.  This was largely expected.  Soybean leaf drop is 38% vs 18% last week, and 35% a year ago.  USDA said it expects to release its first estimate of U.S. soybean harvest progress in next week’s report.  Tomorrow, NOPA will report the August Crush data.  Overnight, Chinese Jan soybean futures were down 29 yuan ; Soymeal up 7; Soyoil down 60; Palm oil down 14; Malaysian palm oil prices were up 42 ringgit (+0.97%) at 4360 extending gains for a second day as higher exports from Malaysia, the second-largest grower, signal strong demand for the month.


The wheat complex was higher overnight.  Dec Chicago and KC contracts are up 5 to 7 cents this morning to 6.94-1/4 and 6.91-1/4, respectively.  Dec MPLS wheat is up 6-3/4 to 8.82-3/4.  Futures are getting a tech bounce after a steep price drop, helped by stability in row crops and the rebounding dollar.  Futures have managed to close off their daily lows the past two-sessions signaling the evaporation of selling pressure.  U.S. ending stocks are expected to be at their lowest level in eight years which will help prices recover, or at least stop going down for the time-being.  Stats Canada is expected to release all-wheat production numbers near 21.9 million tons in this morning’s report, down from 22. 948 mil last month.  U.S. winter wheat planted was pegged at 12% vs 5% last week, and 9% a year ago.


The cattle futures complex is called steady to lower after selling pressure resumed to start the week, with prices finishing with strong to moderate losses.  A new of a fire at the JBS Plant in Grand Island, NE helped push the market lower to start the week.  The fire was in the rendering portion of the plant, but Monday’s kill line was closed , taking 6,000 head capacity off line.  It is still uncertain how long the plant will be idle.  October cattle closed under support at the 200-Day moving average and is ready to challenge the June 1st low.  That area brought some buying support to the market, so this will be a key level to test and hold.  Expectations are for the plant to back in operation today.  The demand concerns and the trend in retail values are the real driving force to the move lower in the price.  Closing beef carcass values maintained their slide as Choice carcasses were down 1.29 to 325.93, and Select lost 1.21 to 292.16.  The feeder cattle market saw strong selling pressure as the market posted triple digit losses. The overall weakness in the cattle and hog markets added to the selling pressure in feeders, which closed technically weak.  Both Live and Feeder cattle markets are in a sttep  oversold position as prices remain in search of a fall low.


Hogs are called steady to lower, but the opportunity exists for a bounce.  The fundamentals are still softer, and October hogs closed below the 200-day moving average, while trading to the lowest price  levels since early March.  Yesterday, prices pushed under the key low established on June 24th.  This keeps the technical selling pressure and long liquidation in front of the market.  Managed Money Funds are still holding a large long position in the hog market (84,399 long contracts as of 9/7), and this is concerning that the long liquidation will continue and possibly accelerate.  This may be an overly negative attitude in the market, and prices may be due for a bounce, but the technical trend is still lower.   National Direct Cash prices lost 1.38 to $84.48 on a carcass base price, but live prices were 3.13 higher to $66.55.  The mixed tone could help support the market.  The Lean Hog Cash index was .23 lower to 97.73.  The spread between cash and futures stays wide, pushing to 16.955 today, which could set the hog market up for a bounce.  Carcass values are trending softer, in a typical seasonal window for softness.  The pork carcass cutout was lower at the close, trading 4.53 lower to 100.57. Load count was light/moderate at 338 loads.


Matthew Strelow

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

back to TFM Market Updates