TFM Sunrise Update 9-2-2021

The CME and Total Farm Marketing offices will be closed Monday, September 6, 2021, in observance of Labor Day.


Corn futures were down again overnight after closing lower the past 3 days.  Dec corn traded as much as 6 cents lower to 5.16-3/4, the lowest level since July 12 and is down more than 35 cents just this week, so far as seasonal harvest pressure makes an assault on this year’s rally.  A lack of commercial buying cash for export is also offering resistance to futures.  On the downside, 5.02-1/2 is the where the contract’s 200-day Moving Average lies.  Right below that is the low from late May at 5.00-1/4. Market news has been generally quiet and will likely stay that way until next week’s WASDE report.  Trade estimates for this morning’s USDA Weekly Export Sales are 850,000 to 1.60 mil tons.  Basis values for grain and soybean barges shipped to the U.S. Gulf Coast for export were weaker for a third straight day on Wednesday as river traffic near the Gulf remained at a standstill after Hurricane Ida came ashore on Sunday, traders said.  Top grain traders ADM and Bunge still lack power at Louisiana’s export hub after the storm forced the companies to shut down over the weekend.


Soybean futures were mixed overnight at yesterday’s lower end of the trading trading range.  Nov beans are down 1-3/4 cents to 12.76 this morning, above Wednesday’s two-month low of 12.70.  The contract’s 200-day Moving Average support is at 12.56 which hasn’t been tested since Aug of 2020.  Technically, prices are falling to oversold territory following a dive lower since August 12.  This could lead to a reprieve from selling pressure.  Trade estimates for this morning’s USDA Weekly Export Sales are 725,000 to 1.40 mil tons.  Soybean meal sales are estimated from 75,000 to 200,000 tons.  Soyoil sales are estimated from zero to 10,000.  The complex is teetering on supply fundamentals heading into harvest and are taking the path of least resistance, lower following beneficial August weather.  Trade estimates for U.S. 2020/21 soybean carryout in the Sept 10 WASDE report is near 180 mil bu versus USDA’s 160 due to lower final demand.  Attention will focus on South America and a la Nina pattern suggesting a 70% chance of affecting South American crops, particularly in southern Brazil and northern Argentina according to private weather forecasters.  Argentine farmers have sold a total 28.5 million tons of soybeans from the 2020/21 crop, after registering sales over a seven day period of 568,600 tons, the Ministry of Agriculture said on Wednesday.

Overnight, Chinese Jan bean futures were up 18 yuan ; Soymeal down 10; Soyoil down 74; Palm oil down 104;  Malaysian palm oil prices overnight were up 66 ringgit (+1.58%) at 4242 as traders assessed the potential for increased purchases after recent price declines


Wheat futures were under pressure overnight, likely led by downward moves in row crops.  Dec Chicago wheat is off 3-1/4 cents this morning to 7.11 while testing support levels in the form of the contract’s 50 and 100-day Moving Averages at 7.04 and 7.00-1/2, respectively.  Dec KC wheat is off 2 cents to 7.02; and Dec MPLS wheat futures are down 6-1/2 cents to 8.92-1/4.  Talk of lower Canada and Russia wheat crops has been offering support, but corn and beans have had a negative influence on the complex, and Matif wheat futures are slumping concern higher prices may reduce demand.  Trade estimates for this morning’s USDA Weekly Export Sales are 200,000 to 450,000 tons.  Global weather features rainfall in the Canadian Prairies delaying harvest;  Dry conditions in the Pacific Northwest delaying winter wheat planting, and mixed conditions in the Central and Southern Plains for early winter wheat planting.  Favorable conditions are seen for filling spring wheat for most of northern and eastern Europe.  Mostly favorable conditions were reported in Ukraine as periods of showers move through, but more adverse conditions in western Russia as showers will continue to be less plentiful and temperatures are above normal.  This will create concerns for winter wheat planting in Russia as well.  Favorable conditions for vegetative winter wheat in Australia, though more showers would be beneficial in New South Wales and Queensland.  Recent showers benefiting developing to reproductive winter wheat in southern Brazil.  Needed showers are forecast for developing winter wheat in Argentina.


Cattle futures are called steady to lower.  Live cattle saw a minimal price recovery on Wednesday, as prices in the October contract finished higher for the first time in six days after slumping into into oversold territory, setting prices up for a bounce.   Despite being firmer, the cattle market failed to turn the tide on the charts, keeping the negative trend intact.  Carcass fundamentals are still overly supportive, but the perception may be more than reality in the this window.  Boxed beef values are still holding historically strong gains, but has been starting to trend softer.  Choice carcasses lost 3.66 to 338.45, and Select was 4.46 softer to 307.57.  The load count was light at 104 loads.  At $338 Choice carcasses are still a great value and supports strong packer margins.  The cash market is still slow to develop this week, but early indications are for steady to slightly higher.  Some very light trade was established in the South at $124, up $1-1.50 over last week.  In Nebraska, dress trade was light at $203, down $1 compared to last week.  The premium of the futures to the cash market may weight on the front end of the market.


Hogs are called weaker.  Buyers returned to the nearby contracts on Wednesday allowing the market to post moderate to strong gains.  Those contracts are staying in a range bound fashion.  The cash market found some stability, that helped support the opening prices on Wednesday, but direct hogs cash close on Wednesday was lower at 89.53, .42 lower with a range of 88-96.  This will weigh on the open today unless export data supports.  Pork carcass value has been choppy, and pork prices were weaker on the close, dropping 2.47to 106.54, holding most of the midday weakness.  The load count was light at 204 loads.  Hog slaughter has been ramping up recently, and estimated slaughter yesterday was at 479,000 head, one of the largest days recently.  This was 6,000 more than last week and 3,000 more than last year.  With weights starting to tick higher, this could bring an increased amount of pork supply into the picture.


Matthew Strelow

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