TFM Sunrise Update 9-18-2020


Corn futures made another new high overnight buoyed by the bean complex.  U.S. President Donald Trump announced a new round of pandemic assistance to farmers of about $13 billion at a campaign rally in Wisconsin on Thursday night which will make up some of the market chatter today.  Dec corn’s new multi-month high now stands at 3.79-1/4 after gaining 4 cents and are on track to post a 10 cent rally for the week.  The Improved technical picture is adding support to the market where strong demand has been providing a fundamental catalyst.  A new sale of 4.7 mil bu to unknown destinations was reported and weekly export sales at 71.8 mb for last week were near the top end of expectations. Total sales on the books for the marketing year are 805 mil bu.


Soybean futures rose double-digits overnight on the heels of strong follow through movement yesterday.  Nov beans gained more than 14 cents and is fast approaching the 10.50 level as many U.S. farmers prepare to tackle the soybean harvest by the end of this month.  With the supply in a bit of an uncertainty, the strong demand tone keeps buyers in the market.  Weekly export sales of 63.7 mil bu was toward the top end of expectations.  Total soybean sales on the books for the marketing year are 189% above last year’s levels.  In addition, new sales of approximately 29 mil bu announced on Thursday morning added support.  The soybean market is very strong, but getting extremely overbought as Managed Money forges a record net long position in the complex. Heading into last night’s trade, Managed Money was net long an estimated 228,000 soybeans; 52,000 lots of soymeal, and; 96,000 soyoil.


Wheat futures were higher overnight after breaking out to the upside on Thursday with double-digit gains.  Dec Chicago wheat was up as much as 8 cents to 5.64. Dec KC advanced  7-1/2 cents to 4.95 and matching the session high from back on June 4.  Currently, conditions are dry in Russia where winter wheat is being planted and Argentina is also dry.  Add in a weakening dollar and spillover support from surging row crop prices, and wheat is back on track to regain it’s uptrend with gains of 20 cents for the week in Chicago.  Weekly export sales total of 12.6 mb, relatively neutral to the market. Rallies stay limited with overall heavy global supply.


Live cattle futures are called mixed as the complex seeks overall direction.  The technical picture is choppy and fundamentals are mixed.  Weekly cash trade continues to develop at $102-103 trade seen in the south, steady to $1/cwt higher than last week, but trade confidence that cash can rally is rather low.  Retail values stay soft keeping demand concerns in front of the market.  Maintained strength in grain markets will keep pressure on feeder cattle prices.


Lean hog futures are called steady to higher.  Cash strength and a surge in the lean hog index supports the October contract.  Weekly export sales reported added 50,700 mt of new sales, of which China was the largest buyer at just under 36,000 mt, followed by Mexico at 5,855.  Strong demand  and midday retail carcass values suggests a firmer end to the week in futures.  Retail carcass levels pushed above the $90 level for the first time in weeks.


Matthew Strelow

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