TFM Sunrise Update 9-9-2020


Corn futures eased overnight, trading inside Tuesday’s ranges while slipping 2 to 3 cents.  Weekly crop ratings dropped an additional 1% to 61% Good-to-excellent, which is what the trade was anticipating.  Corn futures pushed toward the top of the trading range on Tuesday, leaving room for additional gains, but in addition to strong exports, will need a boost from more market-friendly news.  Managed Money has moved into a long position for the first time in 54 weeks but, again may need additional news to push prices further.  They are estimated to be long about 29,000 corn contracts.  Chinese Ag futures eased overnight, too.  Look for choppy, sideways action going into Friday’s USDA WASDE report.  Outside markets overnight had the dollar continuing to rise, and crude oil making an upward correction from its recent fallout.


Soybean futures were mostly steady overnight after trading both higher and lower than Tuesday’s settlement.  Weekly crop ratings dropped an additional 1% to 65% G/E.  Soybeans dropping leaves was 20% versus the 16% average.  Despite cold temperature forecasts, weekend and mid-week rains across the Corn Belt is helping buttress the bean crop.  Light freezes are expected to be reported in pockets around the Dakotas and northern Minnesota from last night.  Demand stays strong with an additional 600,000 metric tons purchased Tuesday for China and unknown destinations, but in the big scheme of things, the hefty buying pace does not put cumulative sales to China that far out of the norm when compared to previous years.  Soybean prices are poised to challenge the contract high in November beans at 9.82.  That contract traded between 9.76 and 9.68-1/2 overnight with Managed Money long an estimated 182,000 bean contracts, 21,000 lots of soybean meal; and, 83,000 soyoil.


Wheat futures traded softer overnight with winter wheat contracts down 2 to 3, and spring wheat unchanged.  Follow through weakness comes on the heels of a jump in the U.S. Dollar Index and upgrades to the size of the Australian wheat crop.  Global supplies stay heavy, and Friday’s USDA WASDE report will confirm those numbers.  Prices are attempting to hold key support at the 200-day moving average.  USDA reported winter wheat plantings at 5% complete versus the 3% average.  Spring wheat is pegged at 82% complete versus 87% average.


Live cattle futures are called steady to lower.  The cattle market saw a nice rebound after the Labor Day weekend, and prices challenged back to resistance levels.  From here, direction will be guided by cash markets and retail values.  Cash markets are expected to trend lower this week, and retail values saw mild weakness on Tuesday.


Lean hog futures are called steady to higher as they move into over-bought territory while sitting above their moving averages.  Midday carcass were 5.60 higher, supporting prices.  Stronger retail value will support cash prices.  Resistance at $60 over the October contract should limit near-term upside potential.  Deferred contracts, meanwhile, are supported by strong demand and retail markets.  .


Matthew Strelow

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