TFM Sunrise Update 9-9-21


Corn futures were down overnight with Dec slumping 5 cents to 5.05-1/4 and within a penny of 200-day Moving Average support at 5.04-1/2.  The next area of support is 5.00-1/4 low from May 26.  Without a steady dose of bullish news to support the market, the seasonal harvest timeframe is favoring the market bears and allowing prices to drift lower.  Weekly Export Sales are delayed until tomorrow morning due to the Labor Day Holiday trading schedule.  Barge freight has rallied thus dropping basis to farmers recently and slowing new cash sales.  Basis bids for corn shipped by barge to the U.S. Gulf Coast did improve, though on Wednesday.  Long liquidation can still drive prices lower despite prices dipping into oversold territory.  Friday’s WASDE report could show an increase in supply, beginning stocks and planted area.  A social media post revealed FSA was scheduled to release its 2nd batch of certified acreage data Friday after USDA’s September crop reports, but the data appeared on the FSA site yesterday.  As of Sept. 1, FSA reported corn planted/failed acres at 91.2 million acres, up from 90.3 million acres reported in Aug.  Outside markets, meanwhile are viewed as neutral for corn as the dollar rises, crude stays rather strong and the stock market eases.


The soybean complex was weaker overnight with Dec soymeal contracts leading the way lower with that contract’s lowest settlement since November 10.  Tomorrow, USDA will revise U.S. 2021 soybean crop and adjust demand.  Nov beans lost 7 cents to 12.71-1/2 overnight and are threatening to break support ahead of what many believe will be a bearishly construed USDA production number in the Supply/Demand update.  Key resistance is up in the 13.50 area.  Soyoil saw its lowest close since August 20 yesterday.  Export Sales will be reported tomorrow and may reflect limited U.S. gulf export capacity due to Hurricane Ida causing the back-up of supply.  Electricity may be restored to all the elevators in a week, or two.  Spot basis bids for soybeans were mostly steady to weak in the U.S. Midwest on Wednesday as start of the autumn harvest approached, merchandisers said.


Wheat futures continued to move lower overnight after trading sharply lower on Wednesday.  Dec Chicago wheat lost a 13-1/4 cents to a 1-1/2 month low of 6.96-1/4 while falling below the 50 and 100-day moving averages.  Dec KC wheat fell to 6.92-1/2 on losses of 12-1/4 cents.  Dec MPLS wheat followed suit while losing 12-14 cents to 8.82-1/4.  The recovery in the greenback creates headwinds for the wheat market.  Egypt bought wheat from Ukraine and Russia in their tender.  For tomorrow, a recent farmer poll suggested U.S. all wheat acres could increase to 49.7 million vs 46.7 last year. The trade est World wheat end stocks near 279 mmt vs USDA 279 with non-China and India stocks near 111 mmt.  Trade estimates for U.S. 2021/22 wheat carryout is near 616 vs USDA 627.

Chinese Jan soybeans were up 53 yuan overnight; Soymeal down 31; Soyoil down 8; Palm oil up 66;  Malaysian palm oil prices overnight were down 87 ringgit (-1.94%) at 4391 amid a further decline in soybean oil, with investors awaiting a key report on the tropical oil’s stockpiles and production in second-largest grower Malaysia.


Cattle are called steady to lower as long liquidation and technical selling keeps driving the market lower.  October cattle is still searching for a seasonal low, and the technical weakness will likely keep sellers in the market.  Both cattle markets are technically weak, but moving into oversold conditions. This could bring a bounce, but until the fundamentals firm, and money flow turns more positive, the path is still lower.  Deferred feeder cattle futures are holding a premium to the Cash Index, which allowed for triple digit losses in the back months.  Cattle slaughter was estimated at 121,000 head on Wednesday, up 2,000 from last week, but carcass weights have been on the rise. Weights are still below last year’s levels, but are adding production into the system.  Choice carcasses been trending softer since its most recent high, and load activity has been light, reflecting a post Labor Day market.  At Midday, Choice carcasses were firmer, but softened into the close, losing .33 to 334.86,and Select lost 3.73 to 298.17.  The load count was improved, but remains light at 132 loads.  The cash market was a bit of a bright spot on Wednesday as light trade was reported in the South with sales at $124, steady to $1 higher than last week.  A light trade is also being reported in parts of the North at $203, a little more than $1.  The bulk of cash trade will likely hold off for today, or tomorrow, but at least the tone looks firm.


Hogs are called steady to higher.  Technically, the recent move lower could open the door for additional long liquidation and the October hogs could look to test support at $84.  However, the mixed close in cash and firm close in retails should support the market open today.   The cash market is trending mostly lower.  National Direct Daily Hogs prices caught a bid today, gaining 1.31 to 89.71, with a range from $84.00 – 95.00 on a carcass base price, but live prices were softer, down .33 to $69.48.  The Lean Hog Cash index, which was .76 lower to 99.30 is starting to narrow the premium over the futures . That spread is trading at 11.920.  Carcass values are trading softer, in a typical seasonal window for softness.  The pork carcass cutout was strong at midday on Wednesday, and held those gains into the close trading 4.73 higher to 110.40.  Load count was strong at 482 loads on some value buying of pork product.


Matthew Strelow

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