TFM Sunrise Update 1-29-20


Corn futures were mixed overnight, trading two-sided after snapping back from a woeful start to the week. The corn market may be moving into more of a rangebound fashion with about a 20 cent range on the Mar contract. The closing of the Sunday night price gap in Tuesday’s trade was encouraging. Weekly Ethanol Stats today and tomorrow’s Export Sales data may give prices a much needed boost.


Soybean futures traded 4 cents higher overnight after plummeting to a deeply oversold technical posture that sent prices down to a test of strong trend-line support. We view concerns regarding U.S. prices vs South American competition making it difficult for prices to rally from here with fund positioning on the short side of the market. In addition, the ongoing coronavirus situation casts doubts over China’s near term demand prospects.


Wheat futures were off 3 to 5 cents overnight on reports this week that China bought roughly 1 mil tons of wheat from Australia, Canada and France over the past two months in order to fill quotas from the World Trade Organization. An up-trending dollar is also noted. Chi wheat futures established a key level of support in Monday’s trade and held those levels in Tuesday’s action. Improved demand year over year as well as strength in global wheat prices keeps support underneath the wheat market, which may likely move more into a sideways choppy fashion over the next handful of weeks.


Cattle futures are called steady to lower. The market moved into consolidation mode, but Apr live cattle still posted their lowest close since early October in Tuesday’s trade. In the short term, the market may be poised for more long liquidation especially if prices break through the key $120 level in the Apr contract. Cash trade is still undeveloped this week but will be closely anticipated as we move toward the end of the week to provide strength in the overall cattle market.


Hog futures are called mixed. Charts are technically weak with Sunday’s price gap, and yesterday’s trade action failing to fill that gap before weakening. Excess supply still weighs heavily on the market, and anticipated Chinese demand hasn’t been there to levels expected. Currently, a weakened technical picture could bring some additional long liquidation in the hog market.


Carol Tillmann

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