TFM Midday Update 11-21-19


Corn futures are trading firmer this morning with the Dec contract up 2 cents to 3.68-3/4, while Mar is up 2 cents to 3.79. Many news items today circle around the demand side of the equation as the USDA announced a sale of 106,000 metric tonnes of corn to unknown destinations for the 2019/20 crop year, as well as weekly export sales showing some improvement over previous weeks. For the week ending November 14, corn sales were at 31 million bushels for the 2019/20 crop year and 1.8 million bushels for 2020/21. This was trending higher over last week’s numbers, but overall still well behind the pace needed to meet the USDA estimate of 1.855 billion bushels. Export sales today were probably deemed neutral to bearish, but at these price levels, U.S. corn is now more competitive on the global scale.


Soybean futures are currently trading softer with the Jan contract down 1-1/2 cents to 9.03-1/2 and Mar soybeans down 1-3/4 to 9.17-1/4. Yesterday’s weak close in front-month contracts brings some additional follow-through selling as prices broke through key levels of support, and are seeing some additional follow-through today. Improving South American weather stays as the main negative influence over top bean prices, as well as the weak technical action. Weekly export sales stayed supportive with 55.7 million bushels of U.S. beans sold for the week of November 14. A strong week of export shipments at 62.7 million bushels helps keep the pace currently above the USDA export estimates for the 2019/20 marketing year. Wet weather across the northern Plains is also providing some support today in beans as remaining bushels may have a difficult time being harvested here by December 1.


Wheat markets are trading softer this morning as the Chi contracts down 2 to 3 cents with Dec down 3-1/4 to 5.12-1/2. KC hard red winter wheat is down 3/4 cent in Dec to 4.25-1/4. Weekly export sales for wheat reported 16.1 million bushels in sales and shipments of 17.8 million bushels for the week of November 14. This shipment number was slightly below the necessary requirements to reach the USDA export estimate for 2019/20. Total commitments on sales is running ahead of last year’s pace, but with the global supplies staying relatively heavy, demand prospects on U.S. wheat need to stay active.


Cattle markets are mixed to lower on this morning’s trade with Dec 15 cents higher to 119.45, but Feb is down 32 cents to 125.15. Front-month Dec is being supported by maintained strength in retail values, as well as the potential improvement for cash trade this week. Early cash trade was limited, but southern trade at $116 was $1 higher over last week’s totals. More trade will likely develop towards the end of the week, and the market may also be experiencing some positioning before Friday’s cattle on feed numbers.


Hog markets are currently trading strongly higher with triple-digit gains across most contracts. Front-month Dec hogs are up 1.15 to 61.60, while Feb hogs are up 1.50 to 68.27. Weekly export sales for pork saw dramatic improvement on a week-over-week basis with just over 90,000 metric tonnes of pork sales for the 2019 and 2020 years combined. Shipments also stayed strong at 59,800 metric tonnes, of which China took 13,000. The two largest customers for U.S. pork in the last week were both Japan and China adding those fresh supplies. With the rough week the market has had with selling pressure, pork may be undervalued and value buyers are stepping in as we see some short covering.


Carol Tillmann

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