TFM Sunrise Update 9-25-20


Corn futures stabilized overnight following four consecutive down days.  Dec corn was up as much as 4 cents to 3.67-1/2 to mid-range of the contract’s 10 and 20-day moving averages.  For the week, the the market is down 10 cents and 12 cents off last week’s high. Managed Money is estimated net long 48,000 corn contracts after selling 17,000 yesterday.  Even talk of dryness in Argentina and the International Grains Council lowering their global corn production estimate by 6 million tons to 1.16 billion was not enough to prop up the market.  The latest regarding weather in Argentina is increased rain chances through Sunday with enough rain to improve soil moisture.  It is evident that harvest pressure and domestic demand concerns regarding ethanol usage are on traders’ radar as we approach the month of October.  The 6 to 10 day Midwest forecast has rain moving through the region early next week with mostly light amounts and around 80% coverage.  Things quiet down the rest of next week and following weekend.  Below average temperatures begin to move in over the period for most of the region. 


Soybean futures were mostly flat overnight with Nov trading both sides of the $10 mark.  The overnight ranged from 9.98 to 10.03-1/2 versus last week’s contract high etched at 10.46-3/4. We view the market as taking a neutral stance into the end of the month near this psychological price level as record weekly export sales compete with a good start to the 2020 harvest season and farmer selling into the rally.  Nov beans held yesterday’s session low support overnight, but meal slipped to a new low for the week.  Soyoil is up this morning.  Managed Money is likely to continue liquidating long positions until fresh bullish news becomes apparent.  They were net sellers of the complex on Thursday and are now net long an estimated 206,000 soybeans; 60,000 lots of soymeal, and; long 83,000 soyoil.


The wheat futures complex traded narrowly mixed overnight in light volume while consolidating this week’s lower movement that saw the Dec Chicago contract test 200-day moving average support.  The dollar is firm and trading near its multi-week high from yesterday which is having an adverse affect on the wheat market, as well as weakness in row crops this week.  The International Grains Council maintained their record high forecast for 2020/21 world wheat production at 763 million tons versus consumption at 749 million.  Western portions of Ukraine will receive timely rain through the end of next week that will significantly increase soil moisture needed for winter crops.


Cattle calls are flat/firm ahead of this afternoon’s Cattle on Feed report due out after the close.  Futures managed good gains yesterday that could lead to lingering buyer interest this morning.  In addition, light cash trade has developed around $105/cwt spurring confidence in the Dec live cattle contract which closed at its highest level since Aug 20.  And, boxed beef values finished firmer – Choice at 215.87 +.43 and Select at 207.60 +1.30 on moderate movement.  Cattle on feed estimates are as follows:

On-Feed Sept 1st  103% (11.355 mil head); Placements in August  105.9%  (1.995 mil head); Marketings in August  96.6%  (1.887 mil head)


Lean hog futures are called steady to firmer based on fundamentals being more friendly than not.  Thursday’s Quarterly hogs and Pigs report was fairly in line with expectations.  Heavy weight hogs (180+ lbs) was at 110% of last year keeping supplies heavy in the near term.  However, the cash market is seen as being a strong supporter of front month futures, and upward trending retail prices closed 3.06 higher to 92.03 yesterday.  The cash index hit 72.89, up .72 on Thursday to its highest since Sept 2019.


Matthew Strelow

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